ADDITIONAL INVESTMENT RIGHTS AGREEMENT
Exhibit 10.25(e)
ADDITIONAL INVESTMENT RIGHTS AGREEMENT
This Additional Investment Right Agreement (the “Additional Investment Rights Agreement”), dated as of December 31, 2024, is between ▇▇▇▇▇▇ Automotive Inc., a Delaware corporation (the “Company”), and the investor listed on the signature page attached hereto (the “Investor”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement, dated as of May 14, 2024, between the Company and the Buyers named therein (the “Purchase Agreement”).
A. Pursuant to Section 4(k) of the Purchase Agreement, each Buyer has the right, until July 9, 2025, at any time from time to time, in its sole and absolute discretion to purchase from the Company Additional Notes in an amount equal to such Buyer’s pro rata portion of up to an aggregate principal amount of $50,000,000 (approximately $52.6 million including the 5% original discount) on the same terms and conditions as applicable to the purchase and Sale of the Convertible Notes.
B. The Investor has agreed to effectuate as of the date hereof an Additional Purchase pursuant to Section 4(k) of the Purchase Agreement in the amount set forth on the signature page attached hereto (the “December Additional Purchase”).
C. In connection with such Additional Purchase, the Company has agreed to grant the Investor an additional right to purchase from the Company Additional Notes in an amount equal to the Investor’s December Additional Purchase on the same terms and conditions as set forth in Section 4(k) of the Purchase Agreement, except as provided for herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Investor hereby agree as follows:
1. Additional Investment Right. Beginning on the date hereof and ending on December 31, 2025, the Investor shall have the right, but not the obligation, at any time from time to time, in its sole and absolute discretion to purchase from the Company Additional Notes in an amount equal to such Investor’s December Additional Purchase on the same terms and conditions as set forth in Section 4(k) of the Purchase Agreement; provided; however, that the following terms shall apply to any Notes and Warrants issued pursuant to this Additional Investment Rights Agreement:
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The Conversion Price of Notes shall be equal to a 5% discount to the lower of (a) the Closing Sale Price of the Common Stock on the Trading Day immediately prior to the date of issuance of such Notes, (b) the Closing Sale Price of the Common Stock on the date on which the Initial Registration Statement (as defined in the Registration Rights Agreement) registering at least the number of shares of Common Stock equal to the Initial Required Registration Amount (as defined in the Registration Rights Agreement) is declared effective by the SEC and (c) the lowest daily VWAP in the five trading days prior to such Conversion Date, subject to adjustment as provided herein; provided, that, notwithstanding anything to the contrary contained in the Note, the Conversion Price shall not be less than a 20% discount of the price determined pursuant to prong (a) (the “Conversion Price Floor”). For the avoidance of doubt, the Conversion Price Floor shall not be subject to adjustment provided for in this Note that is otherwise applicable to the Conversion Price. |
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Each Warrant shall have an exercise price equal to 105% of the Closing Sale Price of the Common Stock on the Trading Day immediately prior to the date of issuance of such Warrant (the “Exercise Price”). |
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Item “C” of the Cashless Exercise formula set forth in Section 1(d) of teach Warrant shall be as follows: |
“C = The lower of the two Closing Bid Prices of the Common Stock in the two days prior the time of such exercise (as such Closing Bid Price is defined in Section 16 herein), but in any event not less than $0.01 (as may be adjusted for stock dividends, subdivisions, or combinations in the manner described in Section 2(a) herein).”
2. Stockholder Approval. The Company shall take all action necessary in accordance with applicable Law, its organizational documents and the rules of the Principal Exchange to establish a record date for, duly call, give notice of, convene and hold a meeting of its stockholders as promptly as reasonably practicable for the purpose of obtaining the approval of its stockholders for the issuance of Common Stock pursuant to this Additional Investment Rights Agreement in accordance with the applicable rules of the Principal Market (“Stockholder Approval”). The Company shall, in consultation with the Investor, prepare and file with the SEC as promptly as practicable, an amendment to its Preliminary Proxy Statement filed with the SEC on December 30, 2024 in connection with its annual meeting of stockholders scheduled to be held on February 27, 2025. If, prior to the expiration of the ten (10) day waiting period provided in Rule 14a-6 under the 1934 Act, the Company does not receive either (i) comments from the SEC on the preliminary Proxy Statement or (ii) notice from the SEC that it will review the preliminary Proxy Statement, then the Company shall file definitive proxy materials (including the definitive Proxy Statement) with the SEC and cause the definitive Proxy Statement to be mailed to the Company’s stockholders as soon as reasonably practicable, and in any event not later than two (2) Business Days after the expiration of such waiting period, the Company shall use commercially reasonable efforts to resolve all SEC comments, if any, with respect to the Proxy Statement as promptly as practicable after receipt thereof. Promptly following confirmation by the SEC that the SEC has no further comments, the Company shall cause the definitive Proxy Statement to be filed with the SEC and mailed to the Company’s stockholders. The Company shall be responsible for 100% of the fees, costs and expenses associated with the preparation, filing and mailing of the Proxy Statement. The Company shall use its reasonable best efforts to solicit proxies to obtain the Stockholder Approval.
3. Miscellaneous. Section 10 of the Purchase Agreement is hereby incorporated by reference herein.
[signature pages follow]
IN WITNESS WHEREOF, each Investor and the Company has caused its signature page to this Agreement to be duly executed as of the date first written above.
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COMPANY:
▇▇▇▇▇▇ AUTOMOTIVE INC. |
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By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ |
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Chairman and CEO |
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[Signature page to Additional Investment Right Agreement]
IN WITNESS WHEREOF, each Investor and the Company has caused its signature page to this Agreement to be duly executed as of the date first written above.
INVESTOR:
| Esousa Group Holdings, LLC | Additional Purchase Amount: $5,263,157.89 | ||
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By: |
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Title: Managing Member |
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Additional Purchase Amount includes 5% original issue discount of aggregate principal amount.
[Signature page to Additional Investment Right Agreement]