UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For
the month of December 2024
Commission
File Number: 001-41981
LOBO
EV TECHNOLOGIES LTD.
(Registrant’s
Name)
Gemini
Mansion B 901, i Park, No. 18-17 Zhenze Rd
Xinwu District, Wuxi, Jiangsu
People’s Republic of China, 214111
(Address of Principal Executive Offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Information
Contained in this Form 6-K Report
Application
of Home Country Practice Rules
This
current report on Form 6-K is being filed to disclose the home country rule exemption of LOBO EV Technologies Ltd. (the “Company”
or “LOBO”) that it intends to disclose in its annual report on Form 20-F for the fiscal year ended December 31, 2024.
As a company incorporated in the British Virgin Islands that is listed on Nasdaq Capital Market (“Nasdaq”), the Company
is subject to Nasdaq corporate governance listing standards. Under Nasdaq rules, a foreign private issuer may, in general, follow its
home country corporate governance practices in lieu of some of the Nasdaq corporate governance requirements. Pursuant to the home country
rule exemption set forth under Nasdaq Listing Rule 5615(a)(3)(A), which provides (with certain exceptions not relevant to the conclusions
expressed herein) that a Foreign Private Issuer may follow its home country practice in lieu of the requirements of the Nasdaq Marketplace
Rule 5600 Series, we elected to be exempt from the requirements as follows:
|
(i) |
Nasdaq
Marketplace Rule 5635(a) which sets forth the circumstances under which shareholder approval is required prior to an issuance of
securities of the Company in connection with the acquisition of the stock or assets of another company; |
|
|
|
|
(ii)
|
Nasdaq
Marketplace Rule 5635(b) which sets forth the circumstances under which shareholder approval is required prior to an issuance of
securities of the Company that will result in a change of control of the company; |
|
|
|
|
(iii) |
Nasdaq
Marketplace Rule 5635(c) which sets forth the circumstances under which shareholder approval is required prior to an issuance of
securities of the Company in connection with equity-based compensation of officers, directors, employees or consultants; and |
|
|
|
|
(iv) |
Nasdaq
Marketplace Rule 5635(d) which sets forth the circumstances under which shareholder approval is required prior to an issuance of
securities, other than in a public offering, equal to 20% or more of the voting power outstanding at a price that is less than the
minimum price defined therein. |
Except
for the foregoing, there is no significant difference between our corporate governance practices and what the Nasdaq requires of domestic
U.S. companies.
Entry
into a Material Definitive Agreement
On
December 10, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Streeterville
Capital, LLC, a Utah limited liability company (the “Investor”) pursuant to which the Company shall issue the Investor,
at the purchase price of $1,500,000, an unsecured promissory note in the original principal amount of $1,635,000.00 (the “Note”)
convertible into ordinary shares, $0.001 par value per share, of the Company (the “Ordinary Share(s)”). In addition,
pursuant to the Purchase Agreement, the Company shall issue 850,000 Ordinary Shares (the “Pre-delivery Share(s)”)
at par value per share to the Investor.
The
Note bears a simple interest at a rate of 7% per annum. All outstanding principal and accrued interest on the Note will become due and
payable twelve months after the purchase price of the Note is delivered by Purchaser to the Company (the “Purchase Price Date”)
The Note includes an original issue discount of $120,000.00 along with $15,000.00 for investor’s fees, costs and other transaction
expenses incurred in connection with the purchase and sale of the Note. The Company may prepay all or a portion of the Note at any time
by paying 110% of the outstanding balance elected for pre-payment. The Company agrees to file a registration statement on Form F-1 to
register the resale of shares converted per the Note and the Pre-delivery Shares.
Under
the Purchase Agreement, while the Note is outstanding, the Company agreed to keep adequate public information available and maintain
its Nasdaq listing. Upon the occurrence of a Trigger Event (as defined in the Note), the Investor shall have the right to increase the
balance of the Note by 15% for Major Trigger Event (as defined in the Note) and 10% for Minor Trigger Event (as defined in the Note).
In addition, the Note provides that upon occurrence of an Event of Default, the interest rate shall accrue on the outstanding balance
at the rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law.
Upon
repayment of the Note by Company in full, the Investor shall within fifteen (15) Trading Days deliver to Company 850,000 Ordinary Shares
(equal to the number of the Pre-Delivery Shares) at $0.001 each Ordinary Share. The Note contains a floor price of $1.00 for the possible
future conversions into Ordinary Shares. In the event a conversion notice is delivered where the conversion price is less than the floor
price, the Investor shall have the right to elect to have the applicable conversion amount paid in cash rather than Ordinary Shares.
On
December 13, 2024, the transaction contemplated by the Purchase Agreement was closed as all the closing conditions of as set forth
therein have been satisfied.
The
issuances of the Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933,
as amended. The foregoing descriptions of the Purchase Agreement and the Note are summaries of the material terms of such agreements,
do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement and the Note, which are attached
hereto as Exhibits 99.1 and 99.2.
Financial
Statements and Exhibits.
Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
Lobo
EV Technologies Ltd. |
|
|
|
Date:
December 16, 2024 |
By: |
/s/
Huajian Xu |
|
Name: |
Huajian
Xu |
|
Title: |
Chief
Executive Officer |
Exhibit
99.1
Securities
Purchase Agreement
This
Securities Purchase Agreement (this “Agreement”),
dated as of December 10, 2024, is entered into by and between Lobo EV Technologies Ltd.,
a British Virgin Islands company (“Company”), and Streeterville Capital, LLC,
a Utah limited liability company, its successors and/or assigns (“Investor”).
A.
Company and Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration afforded
by the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by
the United States Securities and Exchange Commission (the “SEC”).
B.
Investor desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement: (a) a
Convertible Promissory Note in the original principal amount of $1,635,000.00 in the form attached hereto as Exhibit A (the
“Note”), convertible into ordinary shares, par value $0.001, of Company (the “Ordinary Shares”);
and (b) 850,000 Ordinary Shares (the “Pre-Delivery Shares”).
C.
This Agreement, the Note and all other certificates, documents, agreements, resolutions and instruments delivered to any party under
or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.
D.
For purposes of this Agreement: “Conversion Shares” means all Ordinary Shares issuable upon conversion of all or any
portion of the Note; and “Securities” means the Note, the Conversion Shares and the Pre-Delivery Shares
NOW,
THEREFORE, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Company and Investor hereby agree as follows:
1.
Purchase and Sale of Securities.
1.1.
Note and Pre-Delivery Shares. Subject to the terms and condition set forth herein, Company shall issue and sell to Investor and
Investor shall purchase from Company the Note and the Pre-Delivery Shares. In consideration thereof, Investor shall pay the Purchase
Price (as defined below) to Company.
1.2.
Closing Date. The date of the issuance and sale of the Note and the Pre-Delivery Shares pursuant to this Agreement (the “Closing
Date”) shall be the date all conditions set forth in Section 5 and Section 6 below have been satisfied or waived.
The closing of the issuance of the Note and the Pre-Delivery Shares (the “Closing”) shall occur on the Closing Date
by means of the exchange of electronic signatures, but shall be deemed for all purposes to have occurred at the offices of Hansen Black
Anderson Ashcraft PLLC in Lehi, Utah.
1.3.
Purchase Price. The Note includes an original issue discount of $120,000.00 (the “OID”). In addition, Company
agrees to pay $15,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence, monitoring and other transaction
costs incurred in connection with the purchase and sale of the Securities (the “Transaction Expense Amount”). The
OID and the Transaction Expense Amount will be included in the initial principal balance of the Note. The “Note Purchase Price”,
therefore, shall be $1,500,000.00, computed as follows: $1,635,000.00 initial principal balance, less the OID, less the Transaction Expense
Amount. In addition to the Note Purchase Price, Investor will also pay $0.001 per share for the Pre-Delivery Shares (the “the
Pre-Delivery Share Purchase Price”, and together with the Note Purchase Price, the “Purchase Price”).
1.4.
Form of Payment. On the Closing Date, Investor shall pay the Purchase Price to Company via wire transfer of immediately available
funds against delivery of the Note and the Pre-Delivery Shares.
1.5.
Collateral for the Note. The Note shall be unsecured.
2.
Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the Closing Date: (i)
this Agreement has been duly and validly authorized by Investor; (ii) this Agreement constitutes a valid and binding agreement of Investor
enforceable in accordance with its terms; and (iii) Investor is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D of the 1933 Act.
3.
Company’s Representations and Warranties. Company represents and warrants to Investor that as of the Closing Date: (i) Company
is a company duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the
requisite corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified to
do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned by it makes such
qualification necessary; (iii) Company has registered its Ordinary Shares under Section 12(b) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”), and is obligated to file reports pursuant to Section 13 or Section 15(d) of the 1934
Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly authorized
by Company and all necessary actions have been taken; (v) this Agreement and the other Transaction Documents have been duly executed
and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with their terms; (vi)
the execution and delivery of the Transaction Documents by Company, the issuance of the Securities in accordance with the terms hereof,
and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not conflict with
or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s formation documents,
as currently in effect, or other applicable organizational documents, (b) any indenture, mortgage, deed of trust, or other material agreement
or instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation,
any listing agreement for the Ordinary Shares, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment,
or order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (vii) except as have been obtained prior to the Closing, no
further authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders or any lender of Company is required to be obtained by Company for the issuance of the Securities
to Investor or the entering into of the Transaction Documents; (viii) none of Company’s filings with the SEC contained, at the
time they were filed, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; (ix) Company
has filed all reports, schedules, forms, statements and other documents required to be filed by Company with the SEC under the 1934 Act
on a timely basis or has received a valid extension of such time of filing and has filed any such report, schedule, form, statement or
other document prior to the expiration of any such extension; (x) there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting Company before or by any
governmental authority or non-governmental department, commission, board, bureau, agency or instrumentality or any other person; (xi)
Company has not consummated any financing transaction that has not been disclosed in a periodic filing or current report with the SEC
under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12) months, a “Shell Company,”
as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii) with respect to any commissions, placement
agent or finder’s fees or similar payments that will or would become due and owing by Company to any person or entity as a result
of this Agreement or the transactions contemplated hereby (“Broker Fees”), any such Broker Fees will be made in full
compliance with all applicable laws and regulations and only to a person or entity that is a registered investment adviser or registered
broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees or with respect to any claims made by or on behalf
of other persons for fees of a type contemplated in this subsection that may be due in connection with the transactions contemplated
hereby and Company shall indemnify and hold harmless each of Investor, Investor’s employees, officers, directors, stockholders,
members, managers, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including
the costs of preparation and attorneys’ fees) and expenses suffered in respect of any such claimed Broker Fees; (xv) neither Investor
nor any of its officers, directors, stockholders, members, managers, employees, agents or representatives has made any representations
or warranties to Company or any of its officers, directors, employees, agents or representatives except as expressly set forth in the
Transaction Documents and, in making its decision to enter into the transactions contemplated by the Transaction Documents, Company is
not relying on any representation, warranty, covenant or promise of Investor or its officers, directors, members, managers, employees,
agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges that the State of Utah has
a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents and any dispute that
may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section 12.2 below,
shall be applicable to the Transaction Documents and the transactions contemplated therein; (xvii) Company has 50,000,000 Ordinary Shares
authorized and 7,780,000 issued and outstanding; (xviii) Company acknowledges that Investor is not registered as a ‘dealer’
under the 1934 Act; and (xix) Company has performed due diligence and background research on Investor and its affiliates and has received
and reviewed the due diligence packet provided by Investor. Company, being aware of the matters and legal issues described in subsections
(xviii) and (xix) above, acknowledges and agrees that such matters, or any similar matters, have no bearing on the transactions
contemplated by the Transaction Documents and covenants and agrees it will not use any such information or legal theory as a defense
to performance of its obligations under the Transaction Documents or in any attempt to avoid, modify, reduce, rescind or void such obligations.
4.
Company Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full,
or within the timeframes otherwise specifically set forth below, Company will at all times comply with the following covenants: (i) so
long as Investor beneficially owns any of the Securities and for at least twenty (20) Trading Days (as defined in the Note) thereafter,
Company will timely file on the applicable deadline all reports required to be filed with the SEC pursuant to Sections 13 or 15(d) of
the 1934 Act, and will take all reasonable action under its control to ensure that adequate current public information with respect to
Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and will not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination;
(ii) when issued, the Pre-Delivery Shares and the Conversion Shares will be duly authorized, validly issued, fully paid and non-assessable,
free and clear of all liens, claims, charges and encumbrances; (iii) the Ordinary Shares shall be listed or quoted for trading on NYSE
or Nasdaq; (iv) trading in Company’s Ordinary Shares will not be suspended, halted, chilled, frozen, reach zero bid or otherwise
cease trading on Company’s principal trading market; (v) Company will not make any Restricted Issuance (as defined below) without
Investor’s prior written consent, which consent may be granted or withheld in Investor’s sole and absolute discretion; (vi)
Company will not enter into any agreement or otherwise agree to any covenant, condition, or obligation that locks up, restricts in any
way or otherwise prohibits Company: (a) from entering into a variable rate transaction with Investor or any affiliate of Investor, or
(b) from issuing Ordinary Shares, preferred stock, warrants, convertible notes, other debt securities, or any other Company securities
to Investor or any affiliate of Investor; and (vii) within thirty (30) days of the Closing Date, Company will file a registration statement
on Form F-1 (the “Registration Statement”) with the SEC to register Investor’s resale of Conversion Shares and
Pre-Delivery Shares. The number of Ordinary Shares Company will register for Investor under the Registration Statement will be calculated
as follows: the number of Ordinary Shares necessary to convert the Note in full at the $1.00 per share floor price as of the filing date
of the Registration Statement, plus the Pre-Delivery Shares. For purposes hereof, the term “Restricted Issuance” means
the issuance, incurrence or guaranty of any debt obligations, other than trade payables in the ordinary course of business, or the issuance
of any securities that (1) have or may have conversion rights of any kind, contingent, conditional or otherwise, in which the number
of shares that may be issued pursuant to such conversion right varies with the market price of the Ordinary Shares; (2) are or may become
convertible into Ordinary Shares (including without limitation convertible debt, warrants or convertible preferred shares), with a conversion
price that varies with the market price of the Ordinary Shares, even if such security only becomes convertible following an event of
default, the passage of time, or another trigger event or condition; (3) have a fixed conversion price, exercise price or exchange price
that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security (A) due to
a change in the market price of Company’s Ordinary Shares since the date of the initial issuance or (B) upon the occurrence of
specified or contingent events directly or indirectly related to the business of Company (including, without limitation, any “full
ratchet” or “weighted average” anti-dilution provisions, but not including any standard anti-dilution protection for
any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction); or (4) are issued or will be issued
in connection with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. For the avoidance
of doubt, Ordinary Shares issued pursuant to any of the following will not be considered Restricted Issuances: (i) ATM facilities; (ii)
primary equity or debt offerings without variable price mechanics; (iii) primary offerings with variable priced warrants provided that
the variable priced warrants have no provision that will increase the number of warrants issued at closing or increase the number of
Ordinary Shares issuable under each warrant to a ratio of more than 1:1 (except for any adjustments for any reorganization, recapitalization,
non-cash dividend, share split or similar transaction); (iv) share issuances to non-US persons; or (v) issuances in conjunction with
any acquisitions, mergers, licensing arrangements or partnerships provided that such issuances do not cause a change of control or have
variable price mechanisms.
5.
Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Securities to Investor
at the Closing is subject to the satisfaction, on or before each Closing Date, of each of the following conditions:
5.1.
Investor shall have executed all applicable Transaction Documents and delivered the same to Company.
5.2.
Investor shall have delivered the Purchase Price to Company.
6.
Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Note and the Pre-Delivery
Shares is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions
are for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:
6.1.
Company shall have executed all applicable Transaction Documents and delivered the same to Investor.
6.2.
Company shall have issued and delivered the Pre-Delivery Shares to Investor.
6.3.
Company’s transfer agent (the “Transfer Agent”) shall have executed an Irrevocable Transfer Agent Instruction
Letter substantially in the form attached hereto as Exhibit B.
6.4.
Company shall have delivered to Investor a fully executed Officer’s Certificate substantially in the form attached hereto as Exhibit
C evidencing Company’s approval of the Transaction Documents.
6.5.
Company shall have delivered to Investor a fully executed Share Issuance Resolution substantially in the form attached hereto as Exhibit
D to be delivered to the Transfer Agent.
6.6.
In a Form 6-K to be filed with the SEC, Company will elect to be governed by home country rules, such that Nasdaq Listing Rule 5635(d)
will not apply to Company, and shall notify Nasdaq of its intention to be subject to home country rules.
7.
Reservation of Shares. On the date hereof, Company will reserve 2,500,000 Ordinary Shares of Company from its authorized and unissued
Ordinary Shares to provide for all issuances of Conversion Shares under the Note (the “Share Reserve”). Company further
agrees to add additional Ordinary Shares to the Share Reserve in increments of 100,000 shares as and when requested by Investor if as
of the date of any such request the number of Ordinary Shares being held in the Share Reserve is less than three (3) times the number
of Ordinary Shares obtained by dividing the outstanding balance of the Note as of the date of the request by the Conversion Price (as
defined in the Note). Company shall further require its Transfer Agent to hold the Ordinary Shares reserved pursuant to the Share Reserve
exclusively for the benefit of Investor and to issue such shares to Investor promptly upon Investor’s delivery of a Conversion
Notice (as defined in the Note) under the Note. Company shall require the Transfer Agent to issue Ordinary Shares to Investor out of
its authorized and unissued shares, and not the Share Reserve, to the extent Ordinary Shares have been authorized, but not issued, and
are not included in the Share Reserve. The Transfer Agent shall only issue Ordinary Shares out of the Share Reserve to the extent there
are no other authorized shares available for issuance and then only with Investor’s written consent.
8.
Most Favored Nation. So long as the Note is outstanding, upon any issuance by Company of any debt instrument with any economic
term or condition more favorable to the holder of such debt instrument or with a term in favor of the holder of such debt instrument
that was not similarly provided to Investor in the Transaction Documents, then Company shall notify Investor of such additional or more
favorable term and such term, at Investor’s option, shall become a part of the Transaction Documents for the benefit of Investor.
Additionally, if Company fails to notify Investor of any such additional or more favorable term, but Investor becomes aware that Company
has granted such a term to any third party, Investor may notify Company of such additional or more favorable term and such term shall
become a part of the Transaction Documents retroactive to the date on which such term was granted to the applicable third party. The
types of economic terms contained in another debt instrument that may be more favorable to the holder of such security include, but are
not limited to, terms addressing conversion discounts, conversion lookback periods, interest rates, original issue discounts, floor prices,
stock sale price, conversion price per share, warrant coverage, warrant exercise prices, and anti-dilution/conversion and exercise price
resets.
9.
Pre-Delivery Shares.
9.1.
Investor shall not, directly or indirectly, sell, transfer, offer, exchange, assign, pledge, encumber, hypothecate or otherwise dispose
of, or enter into any contract, option or other agreement with respect to any sale, transfer, offer, exchange, assignment, pledge, encumbrance,
hypothecation or other disposition of (collectively, “Transfer”), any Pre-Delivery Shares, provided; however,
that during the period beginning on any day in which Investor delivers a Conversion Notice to Company and ending on the date of delivery
of the Conversion Shares by Company covered by such Conversion Notice (such period, the “Interim Period”), Investor
may Transfer a number of Pre-Delivery Shares up to the number of Conversion Shares covered by the applicable Conversion Notice; provided
further that to the extent any such Transfer is made by Investor during the Interim Period, an equal number of Conversion Shares shall
be deemed to be Pre-Delivery Shares upon delivery by Company to Investor (which shall be subject to the terms and conditions hereunder
applicable to Pre-Delivery Shares) such that the total number of Pre-Delivery Shares held by Investor prior to Company’s exercise
of its repurchase right under Section 9.2 shall always be equal to the number of Pre-Delivery Shares delivered to Investor hereunder,
except during the Interim Period.
9.2.
Notwithstanding anything to the contrary contained herein, Investor covenants and agrees with Company that, upon repayment of the Note
by Company in full, Investor shall within fifteen (15) Trading Days deliver to Company a number of Ordinary Shares equal to the number
of Pre-Delivery Shares issued hereunder (as adjusted for any share splits, share dividends, share combinations, recapitalizations or
other similar transactions occurring after the date hereof), and Company shall pay Investor $0.001 for each share (as adjusted for any
share splits, share dividends, share combinations, recapitalizations or other similar transactions occurring after the date hereof).
10.
No Shorting. During the period beginning on the Closing Date and ending on the later of (i) the date the Note has been repaid
in full or sold by Investor to a third party that is not an affiliate of Investor, or (ii) the date that the Pre-Delivery Shares have
been returned to Company, neither Investor nor any of its subsidiaries, directors, officers, employees or other affiliates has or will
directly or indirectly engage in any open market Short Sales (as defined below) of Ordinary Shares of Company; provided, however, that
unless and until Company has affirmatively demonstrated by the use of specific evidence that Investor is engaging in open market Short
Sales, Investor shall be assumed to be in compliance with the provisions of this Section 10 and Company shall remain fully obligated
to fulfill all of its obligations under the Transaction Documents; and provided, further, that (A) Company shall under no circumstances
be entitled to request or demand that Investor either (1) provide trading or other records of Investor or of any party or (2) affirmatively
demonstrate that Investor or any other party has not engaged in any such Short Sales in breach of these provisions as a condition to
Company’s fulfillment of its obligations under any of the Transaction Documents, (B) Company shall not assert Investor’s
or any other party’s failure to demonstrate such absence of such Short Sales or provide any trading or other records of Investor
or any other party as all or part of a defense to any breach of Company’s obligations under any of the Transaction Documents, and
(C) Company shall have no setoff right with respect to any such Short Sales. For the purposes hereof, and in accordance with Regulation
SHO, the sale after delivery of a Conversion Notice of such number of Ordinary Shares reasonably expected to be purchased under a Conversion
Notice shall not be deemed a Short Sale.
11.
OFAC; Patriot Act.
11.1.
OFAC Certification. Company certifies that (i) it is not acting on behalf of any person, group, entity, or nation named by any
Executive Order or the United States Treasury Department, through its Office of Foreign Assets Control (“OFAC”) or
otherwise, as a terrorist, “Specially Designated Nation”, “Blocked Person”, or other banned or blocked person,
entity, nation, or transaction pursuant to any law, order, rule or regulation that is enforced or administered by OFAC or another department
of the United States government, and (ii) Company is not engaged in this transaction on behalf of, or instigating or facilitating this
transaction on behalf of, any such person, group, entity or nation.
11.2.
Foreign Corrupt Practices. Neither Company, nor any of its subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of Company or any subsidiary has, in the course of his actions for, or on behalf of, Company, used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment to any foreign or domestic government official or employee.
11.3.
Patriot Act. Company shall not (i) be or become subject at any time to any law, regulation, or list of any government agency (including,
without limitation, the OFAC) that prohibits or limits Investor from making any advance or extension of credit to Company or from otherwise
conducting business with Company, or (ii) fail to provide documentary and other evidence of Company’s identity as may be requested
by Investor at any time to enable Investor to verify Company’s identity or to comply with any applicable law or regulation, including,
without limitation, Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318. Company shall comply with all requirements of
law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect. Upon Investor’s
request from time to time, Company shall certify in writing to Investor that Company’s representations, warranties and obligations
under this Section 11.3 remain true and correct and have not been breached. Company shall immediately notify Investor in writing
if any of such representations, warranties or covenants are no longer true or have been breached or if Company has a reasonable basis
to believe that they may no longer be true or have been breached. In connection with such an event, Company shall comply with all requirements
of law and directives of governmental authorities and, at Investor’s request, provide to Investor copies of all notices, reports
and other communications exchanged with, or received from, governmental authorities relating to such an event. Company shall also reimburse
Investor any expense incurred by Investor in evaluating the effect of such an event on the loan secured hereby, in obtaining any necessary
license from governmental authorities as may be necessary for Investor to enforce its rights under the Transaction Documents, and in
complying with all requirements of law applicable to Investor as the result of the existence of such an event and for any penalties or
fines imposed upon Investor as a result thereof.
12.
Miscellaneous. The provisions set forth in this Section 12 shall apply to this Agreement, as well as all other Transaction
Documents as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision
set forth in this Section 12 and any provision in any other Transaction Document, the provision in such other Transaction Document
shall govern.
12.1.
Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit E) arising under this Agreement
or any other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship
of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E attached hereto (the
“Arbitration Provisions”). For the avoidance of doubt, the parties agree that the injunction described in Section
12.3 below may be pursued in an arbitration that is separate and apart from any other arbitration regarding all other Claims arising
under the Transaction Documents. The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding
on the parties hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company represents,
warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions
(or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution
of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that Company will not take
a position contrary to the foregoing representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations
and covenants of Company regarding the Arbitration Provisions.
12.2.
Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that
the exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the
parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes
hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and
notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other
agreement between the Transfer Agent and Company, such litigation specifically includes, without limitation any action between or involving
Company and the Transfer Agent or otherwise related to Investor in any way (specifically including, without limitation, any action where
Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares
to Investor for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of
any state or federal court sitting in Salt Lake County, Utah, (ii) expressly submits to the exclusive venue of any such court for the
purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks
to obtain an injunction, temporary restraining order, or otherwise prohibit the Transfer Agent from issuing Ordinary Shares to Investor
for any reason) outside of any state or federal court sitting in Salt Lake County, Utah, and (iv) waives any claim of improper venue
and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any
such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Finally, Company
covenants and agrees to name Investor as a party in interest in, and provide written notice to Investor in accordance with Section 12.10
below prior to bringing or filing, any action (including without limitation any filing or action against any person or entity that is
not a party to this Agreement, including without limitation the Transfer Agent) that is related in any way to the Transaction Documents
or any transaction contemplated herein or therein, including without limitation any action brought by Company to enjoin or prevent the
issuance of any Ordinary Shares to Investor by the Transfer Agent, and further agrees to timely name Investor as a party to any such
action. Company acknowledges that the governing law and venue provisions set forth in this Section 12.2 are material terms to induce
Investor to enter into the Transaction Documents and that but for Company’s agreements set forth in this Section 12.2 Investor
would not have entered into the Transaction Documents.
12.3.
Specific Performance. Company acknowledges and agrees that Investor may suffer irreparable harm in the event that Company fails
to perform any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms.
It is accordingly agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of
this Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically
agrees that: (i) following an Event of Default (as defined in the Note) under the Note, Investor shall have the right to seek and receive
injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its Ordinary Shares or preferred stock to any
party unless fifty percent (50%) of the gross proceeds received by Company in connection with such issuance are simultaneously used by
Company to make a payment under the Note; (ii) following a breach of Section 4(vi) above, Investor shall have the right to seek
and receive injunctive relief from a court or arbitrator invalidating such lock-up; and (iii) if Company enters into a definitive agreement
that contemplates a Fundamental Transaction (as defined in the Note), unless such agreement contains a closing condition that the Note
is repaid in full upon consummation of the transaction or Investor has provided its written consent in writing to such Fundamental Transaction,
Investor shall have the right to seek and receive injunctive relief from a court or arbitrator preventing the consummation of such transaction.
Company specifically acknowledges that Investor’s right to obtain specific performance constitutes bargained for leverage and that
the loss of such leverage would result in irreparable harm to Investor. For the avoidance of doubt, in the event Investor seeks to obtain
an injunction from a court or an arbitrator against Company or specific performance of any provision of any Transaction Document, such
action shall not be a waiver of any right of Investor under any Transaction Document, at law, or in equity, including without limitation
its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents, nor shall Investor’s pursuit of an injunction
prevent Investor, under the doctrines of claim preclusion, issues preclusion, res judicata or other similar legal doctrines, from pursuing
other Claims in the future in a separate arbitration.
12.4.
Calculation Disputes. Notwithstanding the Arbitration Provisions, in the case of a dispute as to any determination or arithmetic
calculation under the Transaction Documents, including without limitation, calculating the outstanding balance, Conversion Price, Conversion
Shares, or VWAP (as defined in the Note) (each, a “Calculation”), Company or Investor (as the case may be) shall submit
any disputed Calculation via email or facsimile with confirmation of receipt (i) within two (2) Trading Days after receipt of the applicable
notice giving rise to such dispute to Company or Investor (as the case may be) or (ii) if no notice gave rise to such dispute, at any
time after Investor learned of the circumstances giving rise to such dispute. If Investor and Company are unable to agree upon such Calculation
within two (2) Trading Days of such disputed Calculation being submitted to Company or Investor (as the case may be), then Investor will
promptly submit via email or facsimile the disputed Calculation to Unkar Systems Inc. (“Unkar Systems”). Investor
shall cause Unkar Systems to perform the Calculation and notify Company and Investor of the results no later than ten (10) Trading Days
from the time it receives such disputed Calculation. Unkar Systems’ determination of the disputed Calculation shall be binding
upon all parties absent demonstrable error. Unkar Systems’ fee for performing such Calculation shall be paid by the incorrect party,
or if both parties are incorrect, by the party whose Calculation is furthest from the correct Calculation as determined by Unkar Systems.
In the event Company is the losing party, no extension of the Delivery Date (as defined in the Note) shall be granted and Company shall
incur all effects for failing to deliver the applicable shares in a timely manner as set forth in the Transaction Documents. Notwithstanding
the foregoing, Investor may, in its sole discretion, designate an independent, reputable investment bank or accounting firm other than
Unkar Systems to resolve any such dispute and in such event, all references to “Unkar Systems” herein will be replaced with
references to such independent, reputable investment bank or accounting firm so designated by Investor.
12.5.
Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including
pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
12.6.
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation
of, this Agreement.
12.7.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to
conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.
12.8.
Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor
makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term
sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction
Documents (collectively, “Prior Agreements”), that may have been entered into between Company and Investor, or any
affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there
is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents
shall govern.
12.9.
Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties
hereto.
12.10.
Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be
deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor
or by email to an executive officer named below or such officer’s successor, or by facsimile (with successful transmission confirmation
which is kept by sending party), (ii) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the
United States Postal Service by certified mail or with an international courier, or (iii) the earlier of the date delivered or the third
Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties
thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days’
advance written notice similarly given to each of the other parties hereto):
If
to Company:
Lobo
EV Technologies Ltd.
Attn:
Huajian Xu
Gemini
Mansion B 901, i Park, No. 18-17 Zhenze Rd.
Xinwu
District, Wuxi, Jiangsu
PRC
214111
With
a copy to (which copy shall not constitute notice):
Loeb
& Loeb LLP
Attn:
Lawrence Venick
345
Park Avenue,
New
York, NY
If
to Investor:
Streeterville
Capital, LLC
Attn:
John M. Fife
297
Auto Mall Drive #4
St.
George, Utah 84770
With
a copy to (which copy shall not constitute notice):
Hansen
Black Anderson Ashcraft PLLC
Attn:
Jonathan Hansen
3051
West Maple Loop Drive, Suite 325
Lehi,
Utah 84043
12.11.
Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed
by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to
obtain Company’s consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties
hereunder, whether directly or indirectly, without the prior written consent of Investor, and any such attempted assignment or delegation
shall be null and void.
12.12.
Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive
the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify
and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of
or related to any breach or alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement
or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.
12.13.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
12.14.
Investor’s Rights and Remedies Cumulative. All rights, remedies, and powers conferred in this Agreement and the Transaction
Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other right, power, and
remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or existing at law,
in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and in such order
as Investor may deem expedient.
12.15.
Attorneys’ Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the
other to interpret or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing
party all costs and expenses, including reasonable attorneys’ fees incurred therein, including the same with respect to an appeal.
The “prevailing party” shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered
on all claims asserted by such party and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments
are entered in favor of and against both parties, then the arbitrator shall determine the “prevailing party” by taking into
account the relative dollar amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value
of such relief. Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for
frivolous or bad faith pleading. If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing
arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes
action to collect amounts due under the Note or to enforce the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization,
receivership of Company or other proceedings affecting Company’s creditors’ rights and involving a claim under the Note;
then Company shall pay the costs incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation, reasonable attorneys’ fees, expenses, deposition
costs, and disbursements.
12.16.
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party
granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision
or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent
or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
12.17.
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS
OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW
OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY
WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.
12.18.
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the
other Transaction Documents.
12.19.
Voluntary Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions
needed for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents
and fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or has waived
the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or
undue influence by Investor or anyone else.
12.20.
Document Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements,
instruments, documents, and items and records governing, arising from or relating to any of Company’s loans, including, without
limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties
hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded
the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived
originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that
any executed facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed
to be of the same force and effect as the original manually executed document.
[Remainder
of page intentionally left blank; signature page follows]
IN
WITNESS WHEREOF, the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.
|
INVESTOR: |
|
|
|
|
Streeterville Capital, LLC |
|
|
|
|
By: |
/s/
John M. Fife |
|
|
John
M. Fife, President |
|
|
|
|
COMPANY: |
|
|
|
|
Lobo EV Technologies Ltd. |
|
|
|
|
By: |
/s/
Huajian Xu |
|
|
Huajian
Xu, Chief Executive Officer |
[Signature Page to Securities
Purchase Agreement]
ATTACHED
EXHIBITS:
Exhibit
A |
|
Note |
Exhibit
B |
|
TA
Letter |
Exhibit
C |
|
Officer’s
Certificate |
Exhibit
D |
|
Share
Issuance Resolution |
Exhibit
E |
|
Arbitration
Provisions |
Exhibit
E
ARBITRATION
PROVISIONS
1.
Dispute Resolution. For purposes of these arbitration provisions (the “Arbitration Provisions”), the term “Claims”
means any disputes, claims, demands, causes of action, requests for injunctive relief, requests for specific performance, liabilities,
damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions contemplated in the Transaction
Documents and any communications between the parties related thereto, including without limitation any claims of mutual mistake, mistake,
fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability, failure of condition
precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement
(or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. For the avoidance of doubt, Investor’s
pursuit of an injunction or other Claim pursuant to these Arbitration Provisions or with a court will not later prevent Investor under
the doctrines of claim preclusion, issue preclusion, res judicata or other similar legal doctrines from pursuing other Claims in a separate
arbitration in the future. The parties to the Agreement (the “parties”) hereby agree that the Claims may be arbitrated
in one or more arbitrations pursuant to these Arbitration Provisions (one for an injunction or injunctions and a separate one for all
other Claims). The term “Claims” specifically excludes a dispute over Calculations. The parties to the Agreement hereby agree
that these Arbitration Provisions are binding on each of them. As a result, any attempt to rescind the Agreement (or these Arbitration
Provisions) or any other Transaction Document) or declare the Agreement (or these Arbitration Provisions) or any other Transaction Document
invalid or unenforceable pursuant to Section 29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions. Any
capitalized term not defined in these Arbitration Provisions shall have the meaning set forth in the Agreement.
2.
Arbitration. Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”)
to be conducted exclusively in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to
the arbitration appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award
of the arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding
upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented
or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to
monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection
with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting
such enforcement. The Arbitration Award shall include default interest (as defined or otherwise provided for in the Note, “Default
Interest”) (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the
Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake
County, Utah.
3.
The Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration
Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”).
Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event
of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these
Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration
Act that may conflict with or vary from these Arbitration Provisions.
4.
Arbitration Proceedings. Arbitration between the parties will be subject to the following:
4.1
Initiation of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration
by giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under
Section 12.10 of the Agreement (the “Notice Provision”); provided, however, that the Arbitration Notice
may not be given by email or fax. Arbitration will be deemed initiated as of the date that the Arbitration Notice is deemed delivered
to such other party under the Notice Provision (the “Service Date”). After the Service Date, information may be delivered,
and notices may be given, by email or fax pursuant to the Notice Provision or any other method permitted thereunder. The Arbitration
Notice must describe the nature of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims
in the Arbitration Notice must be pleaded consistent with the Utah Rules of Civil Procedure.
4.2
Selection and Payment of Arbitrator.
(a)
Within ten (10) calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such
three (3) designated persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of
doubt, each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five (5) calendar days after
Investor has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1)
of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one
of the Proposed Arbitrators in writing within such 5-day period, then Investor may select the arbitrator from the Proposed Arbitrators
by providing written notice of such selection to Company.
(b)
If Investor fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph
(a) above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may
then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice
to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor
fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company
may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to
Investor.
(c)
If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected
such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the
chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators
decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this
Paragraph 4.2.
(d)
The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both
parties to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator
resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to
continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then
the arbitrator shall be selected under then prevailing rules of the American Arbitration Association.
(e)
Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if
one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to
the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.
4.3
Applicability of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the
Utah Rules of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without
limitation, to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The
Utah Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing,
it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the
event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these
Arbitration Provisions shall control.
4.4
Answer and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating
the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required
deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against
such party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within
the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.
4.5
Related Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent
legal proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject
to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration
Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party
files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will
be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails
to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall
be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal
or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined
in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation
Proceedings pursuant to the Arbitration Act. In the event either party successfully petitions a court to compel arbitration, the losing
party in such action shall be required to pay the prevailing party’s attorneys’ fees and costs incurred in connection with
such action.
4.6
Discovery. Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:
(a)
Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof,
and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded
in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations
set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited
as follows:
|
(i) |
To
facts directly connected with the transactions contemplated by the Agreement. |
|
|
|
|
(ii) |
To
facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or
less expensive than in the manner requested. |
(b)
No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests
for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than
three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions
will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition
of the estimated attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending
the deposition fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice,
then such party shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must
pay the party defending the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is
deemed to be waived as set forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated
attorneys’ fees are unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken
in Utah.
(c)
All discovery requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator
and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation
of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure.
The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the
arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written discovery requests and a written
challenge to each applicable discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to
one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding
as to the likely attorneys’ fees and costs associated with responding to the discovery requests and issue an order that (i) requires
the requesting party to prepay the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires
the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s
finding with respect to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or
a challenge to discovery requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’
fees or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests
(as may be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery
requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production
subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before
the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.
(d)
In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth
in these Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery
request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator
may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.
(e)
Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of
the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following:
(i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name
and qualifications, including a list of all the expert’s publications within the preceding ten (10) years, and a list of any other
cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii)
the compensation to be paid for the expert’s report and testimony. The parties are entitled to depose any other party’s expert
witness one (1) time for no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter
not fairly disclosed in the expert report.
4.6
Dispositive Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules
of Civil Procedure (a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required
to, deliver to the arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the
Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator
and to the other party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within
seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support
shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”).
If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver
the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion
shall proceed regardless.
4.7
Confidentiality. All information disclosed by either party (or such party’s agents) during the Arbitration process (including
without limitation information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential
in nature. Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration
process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure
such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party
or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving
party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court
of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives
and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. Pursuant to
Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure
of privileged information and confidential information upon the written request of either party.
4.8
Authorization; Timing; Scheduling Order. Subject to all other sections of these Arbitration Provisions, the parties hereby authorize
and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the
Arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that
an Arbitration Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator
is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date
in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents
by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.
4.9
Relief. The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief
which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.
4.10
Fees and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory
fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration,
and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.
4.11
Motion to Vacate. Following the entry of the Arbitration Award, if either party desires to file a Motion to Vacate the Arbitration
Award with a court in Salt Lake County, Utah, it must do so within the earlier of: (a) thirty (30) days of entry of the Arbitration;
and (b) in response to the prevailing party’s Motion of Confirm the Arbitration Award.
5.
Arbitration Appeal.
5.1
Initiation of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have
a period of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant
elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel
of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein
as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph
4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee,
the Appellant must also pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond
in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing.
In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance
with the provisions of this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will
not be further conditioned. In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond)
to the other party within the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award.
The Arbitration Award will be considered final until the Appeal Notice has been properly delivered and the applicable appeal bond has
been posted (along with proof of payment of the applicable bond). The parties acknowledge and agree that any Appeal shall be deemed part
of the parties’ agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.
5.2
Selection and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof
of payment of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3)
person arbitration panel (the “Appeal Panel”).
(a)
Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such
five (5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance
of doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator
who rendered the Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after
the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice
to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select
three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators
from the Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.
(b)
If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the
Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed
Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators
by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five
(5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to
the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within
such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant
may select the three (3) members of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice
of such selection to the Appellee.
(c)
If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal
Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date
a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three
(3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator
selection process shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators
who have already agreed to serve shall remain on the Appeal Panel.
(d)
The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email)
delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal
Commencement Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in
writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel
to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes
of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make
determinations upon the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator
on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the
Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member
of the Appeal Panel. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal
Panel shall be selected under then prevailing rules of the American Arbitration Association.
(d)
Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.
5.3
Appeal Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel
shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and
all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate
for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous
evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents
filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal
Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new
witnesses or affidavits, and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the
Arbitration Award.
5.4
Timing.
(a)
Within seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal
Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents
filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may,
but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning
or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7)
calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s
delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply
Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of
this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final.
If the Appellee shall fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply
Memorandum as required above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and
the Appeal shall proceed regardless.
(b)
Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar
days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal
is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).
5.5
Appeal Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator
on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety
and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall
remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive
remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d)
be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees,
including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall,
to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include
Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.
5.6
Relief. The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel
deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal
Panel may not award exemplary or punitive damages.
5.7
Fees and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party
being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any
statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the
Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal
Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges
awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including
without limitation in connection with the Appeal).
6.
Miscellaneous.
6.1
Severability. If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision
shall be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration
Provisions shall remain unaffected and in full force and effect.
6.2
Governing Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict
of laws principles therein.
6.3
Interpretation. The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of,
or affect the interpretation of, these Arbitration Provisions.
6.4
Waiver. No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed
by the party granting the waiver.
6.5
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.
[Remainder
of page intentionally left blank]
Exhibit
99.2
CONVERTIBLE
PROMISSORY NOTE
Effective Date:
December 13, 2024 |
U.S. $1,635,000.00 |
FOR
VALUE RECEIVED, Lobo EV Technologies Ltd., a British Virgin Islands company (“Borrower”),
promises to pay to Streeterville Capital, LLC, a Utah limited liability company, or its
successors or assigns (“Lender”), $1,635,000.00 and any interest, fees, charges, and late fees accrued hereunder on
the date that is twelve (12) months after the Purchase Price Date (the “Maturity Date”) in accordance with the terms
set forth herein and to pay interest on the Outstanding Balance at the rate of seven percent (7%) per annum simple interest from the
Purchase Price Date until the same is paid in full. All interest calculations hereunder shall be computed on the basis of a 360-day year
comprised of twelve (12) thirty (30) day months and shall be payable in accordance with the terms of this Note. This Convertible Promissory
Note (this “Note”) is issued and made effective as of December 13, 2024 (the “Effective Date”).
This Note is issued pursuant to that certain Securities Purchase Agreement dated December 10, 2024, as the same may be amended from time
to time, by and between Borrower and Lender (the “Purchase Agreement”). Certain capitalized terms used herein are
defined in Attachment 1 attached hereto and incorporated herein by this reference.
This
Note carries an original issue discount of $120,000.00 (the “OID”). In addition, Borrower agrees to pay $15,000.00
to Lender to cover Lender’s legal fees, accounting costs, due diligence, monitoring and other transaction costs incurred in connection
with the purchase and sale of this Note (the “Transaction Expense Amount”). The OID and Transaction Expense Amount
are both included in the initial principal balance of this Note and are deemed to be fully earned and non-refundable as of the Purchase
Price Date. The purchase price for this Note shall be $1,500,000.00 (the “Purchase Price”), computed as follows: $1,635,000.00
original principal balance, less the OID, less the Transaction Expense Amount. The Purchase Price shall be payable by Lender by wire
transfer of immediately available funds.
1. Payment;
Prepayment; Registration Statement; Extension.
1.1. Payment.
All payments owing hereunder shall be in lawful money of the United States of America or Conversion Shares (as defined below), as provided
for herein, and delivered to Lender at the address or bank account furnished to Borrower for that purpose. All payments shall be applied
first to (a) costs of collection, if any, then to (b) fees and charges, if any, then to (c) accrued and unpaid interest, and thereafter,
to (d) principal.
1.2. Prepayment.
Notwithstanding the foregoing, with ten (10) Trading Days’ prior written notice Borrower may prepay all or any portion of the Outstanding
Balance (less such portion of the Outstanding Balance for which Borrower has received a Conversion Notice (as defined below) from Lender
where the applicable Conversion Shares have not yet been delivered). For the avoidance of doubt, during the ten (10) Trading Day prepayment
notice period Lender shall retain the right to submit Conversion Notices, if applicable. If Borrower exercises its right to prepay this
Note, Borrower shall make payment to Lender of an amount in cash equal to 110% multiplied by the portion of the Outstanding Balance Borrower
elects to prepay. Borrower will lose the right to prepay this Note if: (a) an Event of Default (as defined below) occurs hereunder; or
(b) Borrower elects to prepay this Note and fails to do so on the date set forth in the prepayment notice sent to Lender.
1.3. Registration
Statement. If the Registration Statement (as defined the Purchase Agreement) is not declared effective by the SEC within ninety (90)
days of the Purchase Price Date, the Outstanding Balance will automatically increase by two and a half percent (2.5%) on such ninetieth
(90th) day and will continue increasing by two and a half percent (2.5%) every thirty (30) days thereafter until the Registration
Statement is declared effective or Lender is able to sell Pre-Delivery Shares and Conversion Shares pursuant to Rule 144 under the Securities
Act of 1933, as amended (“Rule 144”).
1.4. Extension.
Beginning on the Purchase Price Date and ending on the Maturity Date, Borrower will have right to extend the Maturity Date on up to two
(2) occasions for six (6) months each (the “Extension Right”) by sending written notice of such election to Lender.
Each time Borrower elects to exercise its Extension Right, the Outstanding Balance will automatically increase by five percent (5%).
Notwithstanding the foregoing, Borrower will not be eligible to exercise the Extension Right unless each of the following conditions
has been satisfied: (i) with respect to the first exercise of the Extension Right, the Outstanding Balance at the time of exercise must
be $750,000.00 or less, and with respect to the second exercise of the Extension Right, the Outstanding Balance at the time of exercise
must by $375,000.00 or less; (ii) no Trigger Event (whether called or uncalled) shall have occurred hereunder prior to the applicable
exercise date; and (iii) Company shall not have received a letter of non-qualification with respect to any Nasdaq listing rule (regardless
if such compliance issue has been cured).
2. Security.
This Note is unsecured.
3. Conversions.
Lender has the right at any time beginning on the earlier of (a) the date that is six (6) months from the Purchase Price Date, and (b)
the effective date of the Registration Statement (as defined in the Purchase Agreement), until the Outstanding Balance has been paid
in full, at its election, to convert (each instance of conversion is referred to herein as a “Conversion”) all or
any portion of the Outstanding Balance into fully paid and non-assessable ordinary shares, par value $0.001 (“Ordinary Shares”),
of Borrower (“Conversion Shares”) as per the following conversion formula: the number of Conversion Shares equals
the amount of the Outstanding Balance being converted (the “Conversion Amount”) divided by the Conversion Price. Conversion
notices in the form attached hereto as Exhibit A (each, a “Conversion Notice”) may be effectively delivered
to Borrower by any method set forth in the “Notices” section of the Purchase Agreement, and all Conversions shall be cashless
and not require further payment from Lender. Borrower shall deliver the Conversion Shares from any Conversion to Lender in accordance
with Section 8 below. In the event the Conversion Price is below the Floor Price, Lender will have the right to elect to have the applicable
Conversion Amount paid in cash rather than Conversion Shares.
4. Trigger
Events; Defaults; and Remedies.
4.1. Trigger
Events. The following are trigger events under this Note (each, a “Trigger Event”): (a) Borrower fails to pay
any principal, interest, fees, charges, or any other amount when due and payable hereunder; (b) a receiver, trustee or other similar
official shall be appointed over Borrower or a material part of its assets and such appointment shall remain uncontested for twenty (20)
days or shall not be dismissed or discharged within sixty (60) days; (c) Borrower becomes insolvent or generally fails to pay, or admits
in writing its inability to pay, its debts as they become due; (d) Borrower makes a general assignment for the benefit of creditors;
(e) Borrower files a petition for relief under any bankruptcy, insolvency or similar law (domestic or foreign); (f) an involuntary bankruptcy
proceeding is commenced or filed against Borrower; (g) Borrower fails to timely establish and maintain the Share Reserve (as defined
in the Purchase Agreement); (h) Borrower fails to observe or perform any covenant set forth in Section 4 of the Purchase Agreement; (i)
the occurrence of a Fundamental Transaction without Lender’s prior written consent; (j) at any time beginning on the effective
date of the Registration Statement and ending on the date that is six (6) months from the Purchase Price Date, Borrower fails to maintain
an effective registration statement pursuant to which Lender is authorized to sell registered Conversion Shares and Pre-Delivery Shares
(as defined in the Purchase Agreement); (k) Borrower fails to deliver any Conversion Shares in accordance with the terms hereof; (l)
Borrower or any pledgor, trustor, or guarantor of this Note defaults or otherwise fails to observe or perform any covenant, obligation,
condition or agreement of Borrower or such pledgor, trustor, or guarantor contained herein or in any other Transaction Document (as defined
in the Purchase Agreement), other than those specifically set forth in this Section 4.1 and Section 4 of the Purchase Agreement; (m)
any representation, warranty or other statement made or furnished by or on behalf of Borrower or any pledgor, trustor, or guarantor of
this Note to Lender herein, in any Transaction Document, or otherwise in connection with the issuance of this Note is false, incorrect,
incomplete or misleading in any material respect when made or furnished; (n) Borrower effectuates a reverse split, ratio change or other
similar event with respect to its Ordinary Shares without twenty (20) Trading Days prior written notice to Lender, unless the reverse
split is required to maintain compliance with the minimum bid price requirements of the principal market; (o) any money judgment, writ
or similar process is entered or filed against Borrower or any subsidiary of Borrower or any of its property or other assets for more
than $100,000.00, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) calendar days unless otherwise consented
to by Lender; (p) Borrower fails to be DWAC Eligible; or (q) Borrower, any subsidiary of Borrower, or any pledgor, trustor, or guarantor
of this Note breaches any covenant or other term or condition contained in any Other Agreements in any material aspects.
4.2. Trigger
Event Remedies. At any time following the occurrence of any Trigger Event, Lender may, at its option, increase the Outstanding Balance
by applying the Trigger Effect (subject to the limitation set forth below).
4.3. Defaults.
At any time following the occurrence of a Trigger Event, Lender may, at its option, send written notice to Borrower demanding that Borrower
cure the Trigger Event within five (5) Trading Days following the date of such written notice. If Borrower fails to cure the Trigger
Event within the required five (5) Trading Day cure period, the Trigger Event will automatically become an event of default hereunder
(each, an “Event of Default”).
4.4. Default
Remedies. At any time and from time to time following the occurrence of any Event of Default, Lender may accelerate this Note by
written notice to Borrower, with the Outstanding Balance becoming immediately due and payable in cash at the Mandatory Default Amount.
Notwithstanding the foregoing, upon the occurrence of any Trigger Event described in clauses (b) – (f) of Section 4.1, an Event
of Default will be deemed to have occurred and the Outstanding Balance as of the date of the occurrence of such Trigger Event shall become
immediately and automatically due and payable in cash at the Mandatory Default Amount, without any written notice required by Lender
for the Trigger Event to become an Event of Default. At any time following the occurrence of any Event of Default, upon written notice
given by Lender to Borrower, interest shall accrue on the Outstanding Balance beginning on the date the applicable Event of Default occurred
at an interest rate equal to the lesser of eighteen percent (18%) per annum simple interest or the maximum rate permitted under applicable
law (“Default Interest”). For the avoidance of doubt, Lender may continue making Conversions at any time following
a Trigger Event or Event of Default until such time as the Outstanding Balance is paid in full. In connection with acceleration described
herein, Lender need not provide, and Borrower hereby waives, any presentment, demand, protest or other notice of any kind, and Lender
may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such acceleration may be rescinded and annulled by Lender at any time prior to payment hereunder
and Lender shall have all rights as a holder of the Note until such time, if any, as Lender receives full payment of this Note. No such
rescission or annulment shall affect any subsequent Trigger Event or Event of Default or impair any right consequent thereon. Nothing
herein shall limit Lender’s right to pursue any other remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief with respect to Borrower’s failure to timely deliver Conversion Shares
upon Conversion of the Note as required pursuant to the terms hereof.
5. Unconditional
Obligation; No Offset. Borrower acknowledges that this Note is an unconditional, valid, binding and enforceable obligation of Borrower
not subject to offset, deduction or counterclaim of any kind. Borrower hereby waives any rights of offset it now has or may have hereafter
against Lender, its successors and assigns, and agrees to make the payments or Conversions called for herein in accordance with the terms
of this Note.
6. Waiver.
No waiver of any provision of this Note shall be effective unless it is in the form of a writing signed by the party granting the waiver.
No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision or consent to any other
prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent or commit a party to
provide a waiver or consent in the future except to the extent specifically set forth in writing.
7. Rights
Upon Issuance of Securities. Without limiting any provision hereof, if Borrower at any time on or after the Effective Date subdivides
(by any stock split, stock dividend, recapitalization, or otherwise) one or more classes of its outstanding Ordinary Shares into a greater
number of Ordinary Shares, the Fixed Price and Market Price in effect immediately prior to such subdivision will be proportionately reduced.
Without limiting any provision hereof, if Borrower at any time on or after the Effective Date combines (by combination, reverse stock
split, or otherwise) one or more classes of its outstanding Ordinary Shares into a smaller number of Ordinary Shares, the Fixed Price
and Market Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section
7 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment
under this Section 7 occurs during the period that a Market Price is calculated hereunder, then the calculation of such Market Price
shall be adjusted appropriately to reflect such event.
8. Method
of Conversion Share Delivery. On or before the close of business on the second (2nd) Trading Day following the date of
delivery of a Conversion Notice (the “Delivery Date”), Borrower shall, provided it is DWAC Eligible at such time and
such Conversion Shares are eligible for delivery via DWAC, deliver or cause its transfer agent to issue and deliver the applicable Conversion
Shares electronically via DWAC to the account designated by Lender in the applicable Conversion Notice. Notwithstanding the foregoing,
on up to three (3) occasions Borrower will have up to seven (7) days to deliver Conversion Shares without such delay being considered
a failure to timely deliver hereunder. If Borrower is not DWAC Eligible or such Conversion Shares are not eligible for delivery via DWAC,
it shall deliver to Lender or its broker (as designated in the Conversion Notice), via reputable overnight courier, a certificate representing
the number of Ordinary Shares equal to the number of Conversion Shares to which Lender shall be entitled, registered in the name of Lender
or its designee. For the avoidance of doubt, Borrower has not met its obligation to deliver Conversion Shares by the Delivery Date unless
Lender or its broker, as applicable, has actually received the certificate representing the applicable Conversion Shares no later than
the close of business on the relevant Delivery Date pursuant to the terms set forth above. Moreover, and notwithstanding anything to
the contrary herein or in any other Transaction Document, in the event Borrower or its transfer agent refuses to deliver any Conversion
Shares without a restrictive securities legend to Lender on grounds that such issuance is in violation of Rule 144, Borrower shall deliver
or cause its transfer agent to deliver the applicable Conversion Shares to Lender with a restricted securities legend, but otherwise
in accordance with the provisions of this Section 8. In conjunction therewith, Borrower will also deliver to Lender a written explanation
from its counsel or its transfer agent’s counsel opining as to why the issuance of the applicable Conversion Shares violates Rule
144.
9. Conversion
Delays. If Borrower fails to deliver Conversion Shares in accordance with the timeframe stated in Section 8, Lender may at any time
prior to receiving the applicable Conversion Shares rescind in whole or in part such Conversion, with a corresponding increase to the
Outstanding Balance (any returned amount will tack back to the Purchase Price Date for purposes of determining the holding period under
Rule 144). In addition, for each Conversion, in the event that Conversion Shares are not delivered by the Delivery Date, a late fee equal
to 1% of the applicable Conversion Share Value rounded to the nearest multiple of $100.00 but with a floor of $500.00 per day (but in
any event the cumulative amount of such late fees for each Conversion shall not exceed 150% of the applicable Conversion Share Value)
will be assessed for each day after the Delivery Date until Conversion Share delivery is made; and such late fees will be added to the
Outstanding Balance (such fees, the “Conversion Delay Late Fees”).
10. Sales
Limitation. Lender agrees that so long as no Trigger Event has occurred, Lender will limit its sales of Conversion Shares and Pre-Delivery
Shares (as defined in the Purchase Agreement) on the open market in any given calendar week to fifteen percent (15%) of the weekly trading
volume of the Ordinary Shares on all trading markets for such week (the “Sales Limitation”), unless otherwise authorized
by Borrower in writing. In the event Lender breaches such covenant, Borrower’s sole and exclusive remedy shall be the reduction
of the Outstanding Balance in an amount equal to 100 percent (100%) of the net proceeds Lender received from excess sales in any given
week (or payable in cash if this Note has been satisfied in full). For the avoidance of doubt, both the Sales Limitation and Borrower’s
remedy related to such limitation shall expire thirty (30) days after satisfaction in full of the Note.
11. Ownership
Limitation. Notwithstanding anything to the contrary contained in this Note or the other Transaction Documents, Borrower shall not
effect any conversion of this Note to the extent that after giving effect to such conversion would cause Lender (together with its affiliates)
to beneficially own a number of Ordinary Shares exceeding 9.99% of the number of Ordinary Shares outstanding on such date (including
for such purpose the Ordinary Shares issuable upon such issuance) (the “Maximum Percentage”). For purposes of this
section, beneficial ownership of Ordinary Shares will be determined pursuant to Section 13(d) of the 1934 Act. The Maximum Percentage
is enforceable, unconditional and non-waivable and shall apply to all affiliates and assigns of Lender.
12. Opinion
of Counsel. In the event that an opinion of counsel is needed for any Conversion under this Note, Lender has the right to have any
such opinion provided by its counsel.
13. Governing
Law; Venue. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Utah, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Utah. The provisions set forth in the Purchase Agreement to determine the proper
venue for any disputes are incorporated herein by this reference.
14. Arbitration
of Disputes. By its issuance or acceptance of this Note, each party agrees to be bound by the Arbitration Provisions (as defined
in the Purchase Agreement) set forth as an exhibit to the Purchase Agreement.
15. Cancellation.
After repayment or conversion of the entire Outstanding Balance, this Note shall be deemed paid in full, shall automatically be deemed
canceled, and shall not be reissued.
16. Amendments.
The prior written consent of both parties hereto shall be required for any change or amendment to this Note.
17. Assignments.
Borrower may not assign this Note without the prior written consent of Lender. This Note and any Conversion Shares issued upon conversion
of this Note may be offered, sold, assigned or transferred by Lender without the consent of Borrower, so long as such transfer is in
accordance with applicable federal and state securities laws.
18.
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given
in accordance with the subsection of the Purchase Agreement titled “Notices.”
19. Liquidated
Damages. Lender and Borrower agree that in the event Borrower fails to comply with any of the terms or provisions of this Note, Lender’s
damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’ inability to predict
future interest rates, future share prices, future trading volumes and other relevant factors. Accordingly, Lender and Borrower agree
that any fees, balance adjustments, Default Interest or other charges assessed under this Note are not penalties but instead are intended
by the parties to be, and shall be deemed, liquidated damages (under Lender’s and Borrower’s expectations that any such liquidated
damages will tack back to the Purchase Price Date for purposes of determining the holding period under Rule 144). Therefore, no additional
penalty claims, lost profits or liquidated damages shall be claimed in excess of agreed liquidated damage amounts under this Note.
20. Severability.
If any part of this Note is construed to be in violation of any law, such part shall be modified to achieve the objective of Borrower
and Lender to the fullest extent permitted by law and the balance of this Note shall remain in full force and effect.
[Remainder
of page intentionally left blank; signature page follows]
IN
WITNESS WHEREOF, Borrower has caused this Note to be duly executed as of the Effective Date.
|
BORROWER: |
|
Lobo EV Technologies Ltd. |
|
|
|
By: |
/s/ Huajian Xu |
|
|
Huajian Xu, Chief Executive Officer |
ACKNOWLEDGED, ACCEPTED AND AGREED: |
|
LENDER: |
|
Streeterville Capital, LLC |
|
|
|
By: |
/s/ John M. Fife |
|
|
John M. Fife, President |
|
[Signature
Page to Convertible Promissory Note]
ATTACHMENT
1
DEFINITIONS
For
purposes of this Note, the following terms shall have the following meanings:
A1. “Conversion
Price” means the lower of (a) the Market Price; and (b) the Fixed Price.
A2. “Conversion
Share Value” means the product of the number of Conversion Shares deliverable pursuant to any Conversion Notice multiplied
by the daily VWAP of the Ordinary Shares on the Delivery Date for such Conversion.
A3. “DTC”
means the Depository Trust Company or any successor thereto.
A4. “DTC/FAST
Program” means the DTC’s Fast Automated Securities Transfer program.
A5. “DWAC”
means the DTC’s Deposit/Withdrawal at Custodian system.
A6. “DWAC
Eligible” means that (a) Borrower’s Ordinary Shares are eligible at DTC for full services pursuant to DTC’s operational
arrangements, including without limitation transfer through DTC’s DWAC system; (b) Borrower has been approved (without revocation)
by DTC’s underwriting department; (c) Borrower’s transfer agent is approved as an agent in the DTC/FAST Program; (d) the
Conversion Shares are otherwise eligible for delivery via DWAC; and (e) Borrower’s transfer agent does not have a policy prohibiting
or limiting delivery of the Conversion Shares via DWAC.
A7. “Fixed
Price” $4.00 per share.
A8. “Floor
Price” means $1.00 per share.
A9. “Fundamental
Transaction” means that (a) (i) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions,
consolidate or merge with or into (whether or not Borrower or any of its subsidiaries is the surviving corporation) any other person
or entity, (ii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, sell, lease,
license, assign, transfer, convey or otherwise dispose of all or substantially all of its respective properties or assets to any other
person or entity except for any disposition of assets that does not result in a reduction of the Borrower’s or its subsidiaries’
total assets on the balance sheet by more than 50%, (iii) Borrower or any of its subsidiaries shall, directly or indirectly, in one or
more related transactions, allow any other person or entity to make a purchase, tender or exchange offer that is accepted by the holders
of more than 50% of the outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by
the person or persons making or party to, or associated or affiliated with the persons or entities making or party to, such purchase,
tender or exchange offer), (iv) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions,
consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with any other person or entity whereby such other person or entity acquires more than 50% of the
outstanding shares of voting stock of Borrower (not including any shares of voting stock of Borrower held by the other persons or entities
making or party to, or associated or affiliated with the other persons or entities making or party to, such stock or share purchase agreement
or other business combination), (v) Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions,
reorganize, recapitalize or reclassify the ordinary shares or Ordinary Shares, other than an increase in the number of authorized shares
of Borrower’s ordinary shares or Ordinary Shares or conducts reverse stock split in order to meet the Nasdaq continued listing
rules, (vi) Borrower transfers any material asset to any Subsidiary, affiliate, person or entity under common ownership or control with
Borrower without being paid with fair consideration of the transfer, or (vii) Borrower pays or makes any monetary or non-monetary dividend
or distribution to its shareholders; or (b) any “person” or “group” (as these terms are used for purposes of
Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented
by issued and outstanding voting stock of Borrower. For the avoidance of doubt, Company or any if the subsidiaries entering into a definitive
agreement that contemplates a Fundamental Transaction will be deemed to be a Fundamental Transaction unless such agreement contains a
closing condition that this Note is repaid in full upon consummation of the transaction.
A10. “Major
Trigger Event” means any Trigger Event occurring under Sections 4.1(a) - 4.1(j).
Attachment 1 to Convertible Promissory Note, Page 1
A11. “Mandatory
Default Amount” means the Outstanding Balance following the application of the Trigger Effect.
A12. “Market
Price” means 80% multiplied by the lowest daily VWAP in the ten (10) Trading Day period immediately preceding the applicable
measurement date.
A13. “Minor
Trigger Event” means any Trigger Event that is not a Major Trigger Event.
A14. “Other
Agreements” means, collectively, (a) all existing and future agreements and instruments between, among or by Borrower (or a
subsidiary), on the one hand, and Lender (or an affiliate), on the other hand, and (b) any financing agreement or a material agreement
that affects Borrower’s ongoing business operations.
A15. “Outstanding
Balance” means as of any date of determination, the Purchase Price, as reduced or increased, as the case may be, pursuant to
the terms hereof for payment, Conversion, offset, or otherwise, plus the Transaction Expense Amount, plus the OID, plus accrued but unpaid
interest, collection and enforcements costs (including attorneys’ fees) incurred by Lender, transfer, stamp, issuance and similar
taxes and fees related to Conversions, and any other fees or charges (including without limitation Conversion Delay Late Fees) incurred
under this Note.
A16. “Purchase
Price Date” means the date the Purchase Price is delivered by Lender to Borrower.
A17. “SEC”
means the United States Securities and Exchange Commission.
A18. “Trading
Day” means any day on which Nasdaq (or such other principal market for the Ordinary Shares) is open for trading.
A19. “Trigger
Effect” means multiplying the Outstanding Balance as of the date the applicable Event of Default occurred by (a) fifteen percent
(15%) for each occurrence of any Major Trigger Event, or (b) ten percent (10%) for each occurrence of any Minor Trigger Event, and then
adding the resulting product to the Outstanding Balance as of the date the applicable Event of Default occurred, with the sum of the
foregoing then becoming the Outstanding Balance under this Note as of the date the applicable Event of Default occurred; provided, however,
that the Trigger Effect may only be applied up to three (3) time with respect to a Major Trigger Event and up to three (3) times with
respect to a Minor Trigger Event; provided, further, that the Trigger Effect will not apply to any Trigger Event pursuant to Section
4.1(k).
A20. “VWAP”
means the volume weighted average price of the Ordinary Shares on the principal market for a particular Trading Day or set of Trading
Days, as the case may be, as reported by Bloomberg.
[Remainder
of page intentionally left blank]
Attachment 1 to Convertible Promissory Note, Page 2
EXHIBIT
A
CONVERSION
NOTICE
Streeterville
Capital, LLC (“Lender”) hereby gives notice to Lobo EV Technologies Ltd., a British Virgin Islands company (the “Borrower”),
pursuant to that certain Convertible Promissory Note made by Borrower in favor of Lender on December 10, 2024 (the “Note”),
that Lender elects to convert the portion of the Note balance set forth below into fully paid and non-assessable Ordinary Shares of Borrower
as of the date of conversion specified below. Said conversion shall be based on the Conversion Price set forth below. In the event of
a conflict between this Conversion Notice and the Note, the Note shall govern, or, in the alternative, at the election of Lender in its
sole discretion, Lender may provide a new form of Conversion Notice to conform to the Note. Capitalized terms used in this notice without
definition shall have the meanings given to them in the Note.
| A. | Date
of Conversion: ____________ |
| B. | Conversion
#: ____________ |
| C. | Conversion
Amount: ____________ |
| D. | Conversion
Price: _______________ |
| E. | Conversion
Shares: _______________ (C divided by D) |
| F. | Remaining
Outstanding Balance of Note: ____________* |
*
Subject to adjustments for corrections, defaults, interest and other adjustments permitted by the Transaction Documents (as defined in
the Purchase Agreement), the terms of which shall control in the event of any dispute between the terms of this Conversion Notice and
such Transaction Documents.
Please
transfer the Conversion Shares electronically (via DWAC) to the following account:
Broker: |
|
|
Address: |
|
DTC#: |
|
|
|
|
Account #: |
|
|
|
|
Account Name: |
|
|
|
|
|
Lender: |
|
|
|
Streeterville Capital, LLC |
|
|
|
By: |
|
|
|
John M. Fife, President |
LOBO EV Technologies (NASDAQ:LOBO)
Historical Stock Chart
From Dec 2024 to Jan 2025
LOBO EV Technologies (NASDAQ:LOBO)
Historical Stock Chart
From Jan 2024 to Jan 2025