Document:

Exhibit 10.14

 

OFFSHORE SECURITIES PURCHASE AGREEMENT

 

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (OTHER THAN DISTRIBUTORS) UNLESS THE SECURITIES
ARE REGISTERED UNDER THE SECURITIES ACT OF 1933, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933
IS AVAILABLE.

 

This Offshore Securities Purchase Agreement
(this “Agreement”) is made by Grand Perfecta, Inc., a Nevada corporation operating in Japan (the “Company”),
and the purchaser identified on the signature page hereto, including its successors and assigns, (the “Buyer”);
and

 

WHEREAS, this Agreement is executed in reliance
upon the transaction exemption afforded by Regulation S (“Regulation S”) as promulgated by the Securities and Exchange
Commission (“SEC”), under the Securities Act of 1933, as amended, (the “1933 Act”),

 

NOW, THEREFORE, in consideration of the foregoing
recitals and the terms and conditions hereinafter set forth the parties hereto agree as follows:

 

1.       PURCHASE

 

(a)       The
Buyer hereby subscribes for and purchases seven hundred thousand (700,000) shares of the Company’s common stock, par value
$0.001 (hereinafter the “Securities”) for a purchase price of seventy million YEN (¥70,000,000).

 

(b)       Buyer
has made payment of the purchase price of the Securities in the amount indicated above to the account stated below for the benefit
of the Company, the receipt of which is acknowledged by the Company. Upon execution and delivery of this Agreement by the Company
and Buyer, the Buyer shall make payment of the purchase price stated above to the Company by wire or bank transfer to the following
account:

 

Bank Name: The Bank of Tokyo-Mitsubishi UFJ,
Ltd.

Branch Name: Kojimachi Branch

Bank Address: 4-1 Kojimachi, Chiyoda-ku, Tokyo
102-0083 JAPAN

Swift Code: BOTKJPJT

Account No.: 616-452XXXX

Account Name: Link Bit Consulting Co., Ltd.

Account Holder Address: 1-16-1 Kaigan, Minato-ku,
Tokyo 105-0022 JAPAN

Account Type: Ordinary Account

 

Upon execution and delivery of this Agreement by the Company and
Buyer and payment of the purchase price for the Securities by the Buyer, the Company shall promptly cause to be issued to the Buyer
the Securities. Buyer will provide all declarations requested by the Company to effectuate the stock issuance under applicable
US laws.

 

2.       BUYER’S REPRESENTATIONS.
Buyer represents and warrants to the Company as follows:

 

(a)       Buyer
is not a U.S. Person, as defined in Regulation S, and Buyer was not formed for the purpose of investing in the Securities, which
have not been registered under the 1933 Act in reliance upon Regulation S. Buyer is not purchasing the Securities by or for the
benefit of a U.S. Person.

 

 

 

    	 	1	 

     

    

 

(b)       At
the time the offer to purchase the Securities was made, Buyer was outside the United States.

 

(c)       No
offer to sell or purchase the Securities was made in the United States.

 

(d)       Buyer
has not engaged in nor will engage in any “Directed Selling Efforts,” i.e., any activity undertaken for the purpose
of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the Securities
being purchased by the Buyer.

 

(e)       Buyer
is purchasing the Securities for its own account and for investment purposes and not with the view towards distribution or for
the account of a U.S. Person.

 

(f)       All
subsequent offers and sales of the Securities shall be made in compliance with Regulation S and/or pursuant to registration of
the Securities under the 1933 Act or pursuant to an exemption from registration under the 1933 Act. Unless registered for sale
under the 1933 Act, the Securities will not be resold to U.S. Persons or within the United States until after the end of a one
year restricted period commencing on the date of closing of the purchase of the Securities and otherwise in compliance with Rule
904 of Regulation S.

 

(g)       The
Securities are being offered and sold to Buyer in reliance on Regulation S and the Company is relying upon the truth and accuracy
of Buyer’s representations and warranties in order to justify such reliance in connection with the sale of the Securities
to Buyer.

 

(h)       Buyer
is sophisticated and capable of evaluating the risks presented by making an investment in the Securities. Buyer has obtained and
reviewed each of the reports filed by the Company with the Securities and Exchange Commission from August 1, 2016, through the
date of this Agreement.

 

(i)       Buyer
has had an opportunity to ask questions of and receive information from the Company and its executive officers and has availed
itself of such opportunity to the fullest extent desired by Buyer.

 

3       COMPANY REPRESENTATIONS.
The Company represents and warrants to Buyer as follows:

 

(a)       The
Company is incorporated in the state of Nevada, United States of America and is in good standing as of the date of this Agreement.

 

(b)       The
Company has not offered the Securities that are the subject of this transaction to any person in the United States, any identifiable
groups of U.S. citizens abroad, or to any U.S. Person, as that term is defined in Regulation S.

 

(c)       At
the time the offer to purchase the Securities was made by Buyer, the Company and/or its agents reasonably believed Buyer was outside
of the United States and was not a U.S. Person.

 

(d)       The
Company and/or its agents reasonably believe that the transaction has not been pre-arranged with a buyer in the United States.

 

(e)       The
Company has not engaged in nor will engage in any “Directed Selling Efforts,” i.e., any activity undertaken for the
purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of
the Securities being purchased by the Buyer.

 

(f)       The
Securities when issued and delivered will be duly and validly authorized and issued, fully paid and non-assessable and will not
subject the holders thereof to personal liability by reason of being such holders. The Securities are free and clear of any security
interest, liens, claims, or other encumbrances.

 

 

 

    	 	2	 

     

    

 

(g)       The
Agreement has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding agreement
in accordance with its terms, subject to general principles of equity and to bankruptcy or other laws affecting the enforcement
of creditors’ rights generally.

 

(h)       The
Company has not, directly or indirectly, solicited offers for or offered or sold the Securities in any manner involving a public
offering with the meaning of Section 4(a)(2) of the Securities Act.

 

4.       EXEMPTION; RELIANCE
ON REPRESENTATION.

 

(a)       Buyer
understands that the offer and sale of the Securities is not being registered under the 1933 Act. The Company is relying on the
rules governing offers and sales made outside the United States pursuant to Regulation S as an exemption from registration for
this transaction between the Company and the Buyer. Buyer agrees that the Securities cannot be sold except in accordance with the
provisions of Regulation S, pursuant to registration under the 1933 Act, or pursuant to an available exemption from registration;
and agrees not to engage in hedging transactions with regard to the Securities unless in compliance with the 1933 Act.

 

(b)       Buyer
agrees that the Securities are “restricted securities” as defined in SEC Rule 144(a)(3). The Company is bound by this
Agreement to refuse to register any transfer of the foregoing not made in accordance with the provisions of Regulation S, pursuant
to registration under the 1933 Act, or pursuant to an available exemption from registration.

 

(c)       All
certificates and instruments shall bear appropriate restrictive legends to the effect that no transfer of the Securities may be
made except in compliance with the provisions of Regulation S. The Company and Buyer agree that the Company’s transfer agent
is hereby directed and authorized to refuse to register any transfer of the Securities that is not made in accordance with the
provisions of Regulation S.

 

5.       GOVERNING LAW.

 

This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Nevada, United States of America. A facsimile transmission of this signed agreement
shall be legal and binding to all parties hereto.

 

6.       MODIFICATION.

 

This Agreement and the exhibits hereto sets
forth the entire understanding of the parties with respect to the subject matter hereof, supersede all existing agreements among
them concerning such subject matter, and may be modified only by a written instrument duly executed by each party with the approval
of their respective boards of directors.

 

7.       NON-ASSIGNABLE.

 

This Agreement is not assignable or transferable
to any other party.

 

IN WITNESS WHEREOF, this Offshore Securities
Purchase Agreement was duly executed on the date first written below.

 

Dated this 31st day of the month of March 2017.

 

Buyer:

 

Heart Corporation

(Print Name of Buyer)

 

 

By:       /s/ Kaori Hanaoka

Name:  Kaori Hanaoka 

Title:   Representative Director

 

 

Accepted this 10th day of the month of April 2017.

 

GRAND PERFECTA, INC.

 

 

By:        /s/ Shuya Watanabe

Name:   Shuya Watanabe 

Title:     Chairman, CEO 

 

 

 

 

 

    	 	3ex_98763.htm

Exhibit 4.1

 

 

The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from registration under the Securities Act and applicable state law which, in the opinion of counsel to the Company or counsel to the holder, in a form acceptable to the Company, is available.

 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF ONE HUNDRED EIGHTY DAYS FOLLOWING THE ISSUE DATE TO ANYONE OTHER THAN (I) AEGIS CAPITAL CORP., OR (II) A BONA FIDE OFFICER OR PARTNER OF AEGIS CAPITAL CORP.

 

 

THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO [_____]. VOID AFTER 5:00 P.M., EASTERN TIME, [_________]. 

 

 

 

 

COMMON STOCK PURCHASE WARRANT

 

 

 

 

For the Purchase of [_______] Shares of Common Stock

 

of

 

DIGITAL POWER CORPORATION

 

Issue Date: [____________]

 

 

1.     Purchase Warrant. THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of Aegis Capital Corp. (“Holder”), as registered owner of this Purchase Warrant, to Digital Power Corporation, a Nevada corporation (the “Company”), Holder is entitled, at any time or from time to time from [_________] (the “Commencement Date”), and at or before 5:00     p.m., Eastern time, November 1, [_______] (the ”Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to [_________]  shares of common stock of the Company, no par value per share (the “Shares”), subject to adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is initially exercisable at $[_______] per Share; provided, however, that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context. 

 

 

 

 

2.     Exercise.

 

2.1     Exercise Form. In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire. 

 

 

2.2     Cashless Exercise.  If at any time after the Commencement Date there is no effective registration statement registering, or no current prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment of cash or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form attached hereto, in which event the issue to Holder, Shares in accordance with the following formula:

 

	
			X

				
			=

				
			Y(A-B)

				
			 

			
	 	 	
			A

				
			 

			

 

	
			Where,

				 	 	 
	 	
			X

				
			=

				
			The number of Shares to be issued to Holder;

			
	 	
			Y

				
			=

				
			The number of Shares for which the Purchase Warrant is being exercised;

			
	 	
			A

				
			=

				
			The fair market value of one Share; and

			
	 	
			B

				
			=

				
			The Exercise Price.

			

 

For purposes of this Section 2.2, the fair market value of a Share is defined as follows:

 

	 	
			(i)

				
			if the Company’s common stock is traded on a securities exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; or

			

 

	 	
			(ii)

				
			if the Company’s common stock is actively traded over-the-counter, the value shall be deemed to be the closing bid prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s Board of Directors.

			

 

              If Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Shares shall take on the registered characteristics of the Purchase Warrants being exercised. The Company agrees not to take any position contrary to this Section 2.2.

 

2.3      Legend. Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the “Securities Act”): 

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from registration under the Securities Act and applicable state law which, in the opinion of counsel to the Company or counsel to the holder, in a form acceptable to the Company, is available.” 

 

 

 

 

3.     Transfer.

 

3.1     General Restrictions. The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant for a period of one hundred eighty (180) days following the Issue Date to anyone other than: (i) Aegis Capital Corp. (“Aegis”), or (ii) a bona fide officer or partner of Aegis or of any such underwriter or selected dealer, in each case in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause this Purchase Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(g)(2). On and after 180 days after the Issue Date, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment. 

 

3.2      Restrictions Imposed by the Securities Act. The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Company, or counsel for the Holder, in a form acceptable to the Company, that the securities may be transferred pursuant to an exemption from registration under the Securities Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company, or (ii) a registration statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange Commission (the ”Commission”) and compliance with applicable state securities law has been established. 

 

4.     Registration Rights.

 

 

4.1     Grant of “Piggy-Back” Registration Rights. The Holder shall have the right, for a period of no more than five years from the Issue Date, to include the Shares as part of any other registration of securities filed by the Company in a registration statement under Securities Act (including, but not limited to, registration statements relating to secondary offerings of securities of the Company but excluding any registration statements (i) on Form S-4 or S-8 (or any successor or substantially similar form), or of any employee stock option, stock purchase or compensation plan or of securities issued or issuable pursuant to any such plan, or a dividend reinvestment plan, (ii) otherwise relating to any employee, benefit plan or corporate reorganization or other transactions covered by Rule 145 promulgated under the Securities Act, or (iii) on any registration form that does not permit secondary sales or does not include substantially the same information as would be required to be included in a registration statement covering the resale of the Shares). In the event the Holder desires to include in any such registration statement all or any part of the Shares held by the Holder, the Holder shall within fifteen (15) days after the above-described notice from the Company, so notify the Company in writing, including the number of such Shares that the Holder wishes to include in such registration statement. If the Holder decides not to include all of its Shares in any registration statement thereafter filed by the Company, and Rule 144 under the Securities Act remains unavailable for the resale of such Shares, the Holder shall continue to have the right to include any Shares in any subsequent registration statement or registration statements as may be filed by the Company until the Holder has sold all of the Shares held by it. The Company shall bear all fees and expenses attendant to registering the Shares, but the Holder shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holder to represent it in connection with the sale of the Shares.

 

 

 

 

4.1.2     Notwithstanding the foregoing, if the managing underwriter or underwriters of any such proposed public offering advise the Company that the total amount or kind of securities that the Holder, the Company and any other persons intended to be included in such proposed public offering is sufficiently large to adversely affect the success of such proposed public offering, then the amount or kind of securities to be offered for the various parties wishing to have shares of the Company’s common stock registered shall be included in the following order:

 

(i)     if the Company proposes to register treasury shares or authorized but unissued shares of its common stock (collectively, “Primary Securities”):

 

(A)     first, the Primary Securities;

 

(B)     second, the Shares requested to be included in such registration statement, together with shares of its common stock that do not constitute the Shares or Primary Securities (“Other Securities”) held by parties exercising similar piggy-back registration rights (or if necessary, such Shares and Other Securities pro rata among the holders thereof based upon the number of such Shares and Other Securities requested to be registered by each such holder). 

 

(ii)     if the Company proposes to register Other Securities:

 

(A)     first, the Other Securities requested to be included in such registration by holders exercising demand registration rights;

 

(B)     second, the Shares requested to be included in such registration, together with Other Securities held by parties exercising similar piggy-back registration rights (or if necessary, such Shares and Other Securities pro rata among the holders thereof based upon the number of such Shares and Other Securities requested to be registered by each such holder).

 

Anything to the contrary herein notwithstanding, the Company may withdraw or postpone a registration statement referred to in this Section 4 (a “Registration Statement”) at any time before it becomes effective or withdraw, postpone or terminate the offering after it becomes effective without obligation to any Holder.

 

4.1.3     To the extent the staff of the Commission does not permit all of the Shares to be registered pursuant to this Section 4 or if for any other reason any Shares are not then included in the Registration Statement, the Company shall (i) inform the Holder and use its commercially reasonable efforts to file amendments to the registration statement as required by the Commission and/or (ii) withdraw the Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Shares permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Shares as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Shares in accordance with the Commission Guidance, including without limitation, the Manual of Publicly Available Telephone Interpretations D.29. Notwithstanding any other provision herein, if any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff ( the “SEC Guidance”) sets forth a limitation of the number of Shares permitted to be registered on a particular registration statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater number of Shares), the number of Shares to be registered on such registration statement will be reduced to comply with the Commission Guidance. In the event the Company amends the Registration Statement as set forth herein, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by SEC or SEC Guidance provided to the Company or to registrants of securities in general, one or more Registration Statements on Form S-3 or such other form available to register for resale those Shares that were not registered for resale on the Registration Statement, as amended, or the New Registration Statement.

 

 

 

 

4.1.4     As a condition to the inclusion of its Shares, the Holder shall furnish to the Company such information regarding the Holder and the distribution proposed by the Holder as the Company may request in writing or as shall be required in connection with any registration, qualification or compliance referred to herein.

 

4.1.5.     The Holder agrees by acquisition of the Shares that, upon receipt of any notice from the Company of the happening of any event that, in the good faith judgment of the Company’s Board of Directors, requires the suspension of the Holder’s rights under this Section 4, the Holder will forthwith discontinue disposition of the Shares pursuant to the then current prospectus included in the Registration Statement, as the same may be amended or supplemented (including such prospectus subject to completion) (the “Prospectus”), until the Holder is advised in writing by the Company that the use of the Prospectus may be resumed. If so directed by the Company, on the happening of such event, the Holder will deliver to the Company all copies, other than permanent file copies then in the Holder’s possession, of the Prospectus covering the Shares at the time of receipt of such notice.

 

4.1.5.     The Holder hereby covenants with the Company (i) not to make any sale of Shares without effectively causing the prospectus delivery requirements under the Securities Act to be satisfied, and (ii) if such Shares are to be sold by any method or in any transaction other than on a national securities exchange, or in the over-the-counter market, in privately negotiated transactions, or in a combination of such methods, to notify the Company at least 5 business days prior to the date on which the Holder first offers to sell any such Shares.

 

4.1.6     The Holder acknowledges and agrees that the Shares sold pursuant to a registration statement described in this Section 4 are not transferable on the books of the Company unless the stock certificate submitted to the transfer agent evidencing the Shares is accompanied by a certificate reasonably satisfactory to the Company to the effect that (x) the Shares have been sold in accordance with such registration statement and (y) the requirement of delivering a current Prospectus has been satisfied.

 

4.1.7     The Holder shall not take any action with respect to any distribution deemed to be made pursuant to such registration statement that would constitute a violation of Regulation M under the Securities Exchange Act of 1934, as amended (“Exchange Act”), or any other applicable rule, regulation or law.

 

4.1.8     Upon the expiration of the effectiveness of any registration statement described in this Section 4, the Holder shall discontinue sales of the Shares pursuant to such registration statement upon receipt of notice from the Company of the Company’s intention to remove from registration the Shares covered by such registration statement that remain unsold, and the Holder shall notify the Company of the number of registered Shares that remain unsold immediately upon receipt of such notice from the Company.

 

 

 

 

4.1.9     In the case of the registration of any underwritten primary offering initiated by the Company (other than any registration by the Company on Form S-4 or Form S-8 (or any successor or substantially similar form), or of (i) an employee stock option, stock purchase or compensation plan or of securities issued or issuable pursuant to any such plan, or (ii) a dividend reinvestment plan) or any underwritten secondary offering initiated at the request of a holder of securities of the Company pursuant to registration rights granted by the Company, the Holder agrees not to effect any public sale or distribution of securities of the Company, except as part of such underwritten registration, during the period beginning fifteen (15) days prior to the closing date of such underwritten offering and during the period ending ninety (90) days after such closing date (or such longer period as may be reasonably requested by the Company or by the managing underwriter or underwriters).

 

4.1.10     In furtherance and not in limitation of the foregoing, the Holder shall have no rights pursuant to this Section 4 at such time as all of the Holder’s Shares may be sold without limitation pursuant to Rule 144.

 

4.3     General Terms.

 

4.3.1     Indemnification. The Company shall indemnify the Holder(s) of the Shares to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holder(s) within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as amended, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Placement Agent contained in Section G of the Engagement Agreement between Aegis and the Company, dated as of October 20, 2017. The Holder(s) of the Shares to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Securities Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section G of the Engagement Agreement pursuant to which the Aegis has agreed to indemnify the Company. 

 

4.3.2      Exercise of Purchase Warrants. Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof. 

 

4.3.3      Documents to be Delivered by Holder(s). Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders. 

 

5.     New Purchase Warrants to be Issued.

 

5.1     Partial Exercise or Transfer. Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 2.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned. 

 

 

 

 

5.2      Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company. 

 

6.     Adjustments.

 

6.1     Adjustments to Exercise Price and Number of Securities. The Exercise Price and the number of Shares underlying the Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth: 

 

6.1.1     Share Dividends; Split Ups. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares, and the Exercise Price shall be proportionately decreased. 

 

6.1.2      Aggregation of Shares. If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and the Exercise Price shall be proportionately increased.

 

6.1.3      Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers. 

 

 

 

 

6.1.4      Changes in Form of Purchase Warrant. This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof. 

 

6.2      Substitute Purchase Warrant. In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 6. The above provision of this Section shall similarly apply to successive consolidations or share reconstructions or amalgamations. 

 

6.3      Elimination of Fractional Interests. The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights. 

 

7.      Reservation and Listing. The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Common Stock may then be listed and/or quoted. 

 

8.     Certain Notice Requirements.

 

8.1     Holder’s Right to Receive Notice. Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders. 

 

 

 

 

8.2      Events Requiring Notice. The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed. 

 

8.3      Notice of Change in Exercise Price. The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of such event and change (“Price Notice”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial Officer. 

 

8.4      Transmittal of Notices. All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders: 

 

If to the Holder:

 

Aegis Capital Corp.

810 Seventh Avenue, 11th Floor

New York, New York 10019

Attn: Mr. David Bocchi, Managing Director of Investment Banking

Fax No.: (212) 813-1047

 

 

 

 

with a copy (which shall not constitute notice) to:

 

If to the Company:

 

Digital Power Corporation 

48430 Lakeview Blvd,

Fremont, CA 94538Attention: Milton C. Ault III, Executive Chairman

 

with a copy (which shall not constitute notice) to:

 

Sichenzia Ross Ference Kesner, LLP

1185 Avenue of the Americas, 37th Floor

New York, NY 10036

Attention: Marc Ross, Esq.

Fax No: (212) 930-9725 

 

9.     Miscellaneous.

 

9.1     Amendments. The Company and Aegis may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and Aegis may deem necessary or desirable and that the Company and Aegis deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought. 

 

9.2      Headings. The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant. 

 

9.3.      Entire Agreement. This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof. 

 

9.4      Binding Effect. This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained. 

 

9.5      Governing Law; Submission to Jurisdiction; Trial by Jury. This Purchase Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Purchase Warrant or the transactions contemplated hereby. 

 

 

 

 

9.6      Waiver, etc. The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment. 

 

9.7      Execution in Counterparts. This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission. 

 

9.8      Exchange Agreement. As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and Aegis enter into an agreement (“Exchange Agreement”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement. 

 

 

 

[Signature Page Follows]

 

 

 

IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the [______] day of [________]. 

 

 

DIGITAL POWER CORPORATION

 

 

By:_________________________________

Name: Milton C. Ault III

Title: Executive Chairman

 

 

 

 

[Form to be used to exercise Purchase Warrant]

 

 

 

Date: __________, 20___

 

 

 

The undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______ shares of common stock, no par value per share (the “Shares”), of Digital Power Corporation, a California corporation (the “Company”), and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised 

 

or

 

The undersigned hereby elects irrevocably to convert its right to purchase ___ Shares of the Company under the Purchase Warrant for ______ Shares, as determined in accordance with the following formula:

 

	 	
			X

				
			=

				
			Y(A-B)

				 
	 	 	 	
			A

				 
	
			Where,

				 	 	 
	 	
			X

				
			=

				
			The number of Shares to be issued to Holder;

			
	 	
			Y

				
			=

				
			The number of Shares for which the Purchase Warrant is being exercised;

			
	 	
			A

				
			=

				
			The fair market value of one Share which is equal to $_____; and

			
	 	
			B

				
			=

				
			The Exercise Price which is equal to $______ per share

			

 

 

The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.

 

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.

 

 

Signature ______________________________________

 

 

 

Signature Guaranteed______________________________

 

 

 

 

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

 

 

Name:____________________________________________

(Print in Block Letters)

 

Address:___________________________________________

 

___________________________________________

 

___________________________________________

 

___________________________________________

 

 

 

 

NOTICE: The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

 

 

 

 

[Form to be used to assign Purchase Warrant]

 

ASSIGNMENT

 

(To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):

 

 

 

 

FOR VALUE RECEIVED, __________________ does hereby sell, assign and transfer unto the right to purchase shares of common stock, no par value per share, of Digital Power Corporation, a California corporation (the “Company”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company. 

 

 

 

 

Dated: __________, 20__

 

 

 

 

Signature ____________________________________

 

 

 

 

Signature Guaranteed ___________________________

 

 

 

 

NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}]]