6-K

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 November 2023 (Report No. 2)

Commission File Number: 001-40649

REE AUTOMOTIVE LTD.

(Exact name of registrant as specified in its charter)

Kibbutz Glil-Yam

4690500, Israel

(Address of principal executive office)

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 ☐

CONTENTS

On November 27, 2023, REE Automotive Ltd. (the “Registrant”) entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain investors (the “Investors”), pursuant to which the Registrant agreed to issue and sell convertible promissory notes (the “Notes”) in the principal amount of $8,000,000 in the aggregate, and warrants (“Warrants”) to purchase up to an aggregate of 1,571,710 of the Registrant’s Class A ordinary shares (the “Ordinary Shares”). The closing of the Notes (the “Closing”) is expected to occur on or before December 11, 2023. The Registrant intends to use the net proceeds for general corporate and working capital purposes.

The Notes will have a term of five years, accrue interest at a rate of ten percent per annum and are convertible into Ordinary Shares at a conversion price of $5.09 per share, representing a conversion price premium of 15% over the Ordinary Share closing price on November 24, 2023. The Registrant may not repay any portion of the outstanding principal amount of the Notes (or any interest accrued thereon) prior to the maturity date. The conversion price of the Notes is subject to customary adjustments, and the Notes contain customary anti-dilution protections in the event of certain equity issuances by the Registrant at a price less than the conversion price then in effect. The Warrants will be immediately exercisable at an exercise price of $4.42 per Ordinary Share and will have a term of five years from the date of issuance.

The securities described herein (the “Securities”) have not been registered under the Securities Act of 1933, as amended, and may not be sold in the United States absent registration or an applicable exemption from the registration requirements. The Registrant has agreed to file a registration statement with the Securities and Exchange Commission to register the resale of the Ordinary Shares issuable upon conversion of the Notes and the Ordinary Shares underlying the Warrants within thirty business days of the Closing.

This Report of Foreign Private Issuer on Form 6-K shall not constitute an offer to sell or the solicitation of an offer to buy the Securities, nor shall there be any sale of these Securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

The descriptions of the Securities Purchase Agreement, the Notes and Warrants set forth above are qualified in their entirety by reference to the full text of those documents, which are attached hereto as Exhibits 99.1, 99.2 and 99.3, respectively.

This Form 6-K is incorporated by reference into the Registrant’s registration statements, including its registration statements on Form S-8 (File No. 333-261130 and File No. 333-272145) and registration statements on Form F-3 (File Nos. 333-266902 and 333-258963), and shall be a part thereof, to the extent not superseded by documents or reports subsequently filed or furnished.

EXHIBIT INDEX

Exhibit No.	Description
99.1	Form of Securities Purchase Agreement
99.2	Form of Convertible Promissory Note
99.3	Form of Warrant

1

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.

REE AUTOMOTIVE LTD.
By:	/s/ Avital Futterman
Name:	Avital Futterman
Title:	General Counsel

Date: November 28, 2023

2

EX-99.1

Exhibit 99.1

SECURITIES PURCHASE AGREEMENT

by and among

REE AUTOMOTIVE LTD.

and

[*]

Dated November 27, 2023

TABLE OF CONTENTS

		Page
1	DEFINITIONS	1
2	PURCHASE AND SALE OF THE NOTE and the Warrant	5
3	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	6
4	REPRESENTATIONS AND WARRANTIES OF the INVESTOR	13
5	TRANSFER	15
6	COVENANTS OF THE COMPANY	15
7	CLOSING CONDITIONS	19
8	EVENTS OF DEFAULT	21
9	TERMINATION	22
10	REGISTRATION RIGHTS	23
11	RIGHTS TO FUTURE STOCK ISSUANCES	28
12	GENERAL PROVISIONS	29
Exhibit A
	Form of Note	A-1
Exhibit B
	Form of Warrant	B-1

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SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (as amended, supplemented, restated and/or modified from time to time, this “Agreement”) is entered into as of 27 November, 2023, by and between REE Automotive Ltd., a company organized under the Laws of Israel with registration number 514557339 (the “Company”), and [*] (together with its successors and permitted assigns, the “Investor”).

RECITALS

(A) The board of directors (the “Board of Directors”) of the Company has authorized the issuance to the Investor of the Note (as defined below) and the Warrant (as defined below).

(B) The Investor desires to purchase the Note and the Warrant on the terms and conditions set forth in this Agreement pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D thereunder.

NOW THEREFORE, in consideration of the foregoing recitals and the covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1 DEFINITIONS

As used in this Agreement, the following terms shall have the following meanings specified or indicated below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms:

“1933 Act” means the Securities Act of 1933, as amended;

“1934 Act” means the Securities Exchange Act of 1934, as amended;

“Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified;

“Agreement” has the meaning set forth in the preamble;

“Amended and Restated Articles” means the amended and restated articles of association of the Company, as adopted on October 16, 2023;

“Blue Sky Application” has the meaning set forth in Section 10.03(a);

“Board of Directors” has the meaning set forth in the recitals;

“Business Day” means any day other than a Friday, Saturday, Sunday or any other day on which banks are permitted or required to be closed in New York City or in Israel;

“Capital Stock” means the Ordinary Shares and any other classes of capital stock of the Company;

“Capital Stock Equivalents” means any securities of the Company or its Subsidiaries which would entitle the holder thereof to acquire at any time Capital Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Capital Stock;

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“Change of Control” means, with respect to the Company, if at any time after the date of this Agreement:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the 1934 Act) shall become the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the 1934 Act), directly or indirectly, of (i) more than twenty-five percent (25%) of the voting rights attached to any class of voting securities of the Company, or (ii) the right to appoint more than twenty-five percent (25%) of the Board of Directors; or

(b) there shall occur the sale, lease, exchange, license or other transfer or disposition (including by way of a license or a merger, purchase, amalgamation, consolidation, scheme of arrangement or other business combination transaction), in a single transaction or a series of transactions, of all or substantially all of assets of the Company or any of its Subsidiaries;

“Class A Shares” means the Class A ordinary shares of the Company listed on the Nasdaq Stock Market without par value and having one vote per share;

“Closing” has the meaning set forth in Section 2.01;

“Company” has the meaning set forth in the preamble;

“Conversion Shares” means the Ordinary Shares issuable upon the full or any partial conversion of the Note;

“Effectiveness Period” has the meaning set forth in Section 10.02(a);

“Equity Interests” means and includes Ordinary Shares and any Ordinary Share Equivalents;

“Event” means any event, change, development, effect, condition, circumstance, matter, occurrence or state of facts;

“Event of Default” has the meaning set forth in Section 8.01;

“Excluded Shares” means

(a) any (i) Ordinary Shares (including without limitation restricted Ordinary Shares) or restricted share units or options in respect of Ordinary Shares issued on or after the date of this Agreement to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted by the Board of Directors for such purpose prior to the date of this Agreement; or (ii) Ordinary Shares issued or issuable upon exercise or conversion of any existing convertible securities of the Company that are outstanding as of the date of this Agreement under any such stock or option plan but, in respect of any securities described in this subsection (a), (x) exclusive of any such securities issued to or in respect of (in either case, including upon conversion or otherwise) a Founder or to any spouse, civil partner, co-habitee, lineal descendant by blood or adoption and/or step child of a Founder or any person acting, directly or indirectly, on behalf of any of the foregoing, whether as nominee, trustee, custodian or otherwise) and further (y) only to the extent collectively (inclusive of the securities described in the foregoing clause (x)) not in excess of 20% (twenty percent) of the Equity Interests issued and outstanding from time to time (and for purposes of this subsection (a), any Ordinary Share Equivalents shall be deemed to have converted into, or been exercised for, the maximum aggregate number of Ordinary Shares potentially issuable thereunder as at the date in question); and

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(b) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144), and, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities;

“Founder” means Daniel Barel or Ahishay Sardes;

“Investor Party” has the meaning set forth in Section 6.12(a);

“Investor Shares” means the Conversion Shares, the Warrant Shares and any other shares issued or issuable to the Investor pursuant to this Agreement, the Note or the Warrant;

“IP Rights” has the meaning set forth in Section 3.10;

“Law” means any law, rule, regulation, order, judgment or decree, including, without limitation, any federal and state securities laws and the rules of any applicable Trading Market;

“Losses” has the meaning set forth in Section 6.12(a);

“Material Adverse Effect” means any Event that has had or is reasonably likely to have a material adverse effect on (i) the businesses, properties, assets, operations, results of operations or financial condition of the Company, or the Company and the Subsidiaries, taken as a whole, or (ii) the ability of the Company to consummate the transactions contemplated by this Agreement or to perform its obligations hereunder or under the Note or the Warrant; provided, however, that none of the following shall be deemed either alone or in combination to constitute, and none of the following shall be taken into account in determining whether there has been or would be, a Material Adverse Effect: (a) any adverse effect resulting from or arising out of general economic conditions; (b) any adverse effect resulting from or arising out of general conditions in the industries in which the Company and the Subsidiaries operate; (c) any adverse effect resulting from any changes to applicable Law; or (d) any adverse effect resulting from or arising out of any natural disaster or any acts of terrorism, sabotage, military action or war or any escalation or worsening thereof; provided, further, that any event, occurrence, fact, condition or change referred to in clauses (a) through (d) immediately above shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on the Company and/or the Subsidiaries compared to other participants in the industries in which the Company and the Subsidiaries operate;

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“Money Laundering Laws” has the meaning set forth in Section 3.25;

“New Securities” means, collectively, equity or debt securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity or debt securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity or debt securities (but excluding any Excluded Shares);

“Note” has the meaning set forth in Section 2.02(a);

“OFAC” has the meaning set forth in Section 3.23;

“Offer Notice” has the meaning set forth in Section 11.03;

“Ordinary Shares” means the Class A Shares;

“Ordinary Share Equivalent” means any convertible security or warrant, option or other right to subscribe for or purchase any Ordinary Shares or any convertible security convertible into Ordinary Shares;

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind;

“Principal Amount” has the meaning set forth in Section 2.02(a);

“Proceedings” has the meaning set forth in Section 3.06;

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Investor Shares covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus, and any “free writing prospectus” as defined in Rule 405 under the 1933 Act;

“register,” “registered” and “registration” refer to a registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act, and the declaration or ordering of effectiveness of such Registration Statement or document;

“Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the Investor Shares pursuant to the provisions of this Agreement, including the Prospectus and amendments and supplements to such Registration Statement, and including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement;

“Required Minimum” means, as of any date, two (2) times the maximum aggregate number of Ordinary Shares then issued or potentially issuable in the future pursuant to (a) the Transaction Documents (including any Warrant Shares issuable upon exercise in full of the Warrant or Conversion Shares issuable upon conversion in full of the Note, ignoring any conversion or exercise limits set forth therein and based on, respectively, an Exercise Price (as defined in the Warrant) and Conversion Price (as defined in the Note) applicable as at such date) and (b) any other note or warrant issued pursuant to a securities purchase agreement entered into by the Company at or around the same time as this Agreement in respect of Ordinary Share Equivalents (including any Ordinary Shares issuable upon exercise in full of any such warrants or conversion of any such notes, ignoring conversion or exercise limits set forth therein and based on an exercise price and conversion price (as applicable) applicable at such date);

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“SEC” means the United States Securities and Exchange Commission;

“SEC Documents” has the meaning set forth in Section 3.05(a);

“Securities” means the Note, the Warrant and the Investor Shares;

“Securities Termination Event” means either of the following has occurred:

(a) trading in securities generally in the United States has been suspended or limited for a consecutive period of greater than three (3) Business Days; or

(b) a banking moratorium has been declared by the United States or the New York State authorities and is continuing for a consecutive period of greater than three (3) Business Days;

“Shareholder Approval” shall mean the approval of the holders of shares of the Company (or any class thereof): (a) to amend the Company’s Amended and Restated Articles to increase the number of authorized Ordinary Shares by at least the number of Ordinary Shares equal to the Required Minimum of Ordinary Shares, (b) to ratify and approve all of the transactions contemplated by the Transaction Documents, including the issuance of all the Investor Shares (as such term is defined in each of such documents) issued and potentially issuable to the Investor thereunder, all as may be required under applicable Law.

“Subsidiaries” and “Subsidiary” have the meaning set forth in Section 3.04(b);

“Trading Day” means a day on which the Ordinary Shares are traded on a Trading Market;

“Trading Market” means whichever of the New York Stock Exchange, NYSE American, or the Nasdaq Stock Market (including the Nasdaq Capital Market) (or any successor entity of the foregoing), on which the Ordinary Shares are listed or quoted for trading on the date in question;

“Transaction Documents” means this Agreement, the Note, the Warrant, and any other documents or agreements executed or delivered in connection with the transactions contemplated hereunder;

“Warrant” has the meaning set forth in Section 2.02(b); and

“Warrant Shares” means the Ordinary Shares issuable upon exercise of the Warrant.

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2 PURCHASE AND SALE OF THE NOTE and the Warrant

2.01 Closing.

The closing for the Note and the Warrant, including payment for and delivery of the Note and the Warrant, shall take place remotely via the exchange of documents and signatures, no later than the date falling ten (10) Business Days following the execution and delivery of this Agreement, subject to satisfaction or waiver of the applicable conditions set forth in Section 7.01 (the “Closing”), or at such other time and place as the Company and the Investor agree upon, orally or in writing.

2.02 Purchase and Sale of the Note and the Warrant. Subject to the terms and conditions set forth herein, at the Closing, the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company:

(a) a convertible promissory note, in the form attached hereto as Exhibit A (the “Note”), in the principal amount of USD [*] (the “Principal Amount”), registered in the name of the Investor; and

(b) a share purchase warrant, in the form attached hereto as Exhibit B (the “Warrant”), registered in the name of the Investor, pursuant to which the Investor shall have the right to acquire [*] Ordinary Shares (subject to adjustment in accordance with the terms of the Warrant).

3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor and covenants with it that the following representations and warranties are true and correct:

3.01 Organization and Qualification.

The Company is a corporation duly organized and validly existing in good standing under the Laws of Israel and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted. The Company is duly qualified to do business and is in good standing in every jurisdiction in which the ownership of its property or the nature of the business conducted by it makes such qualification necessary.

3.02 Authorization; Enforcement; Compliance with Other Instruments.

The Company has the requisite corporate power and authority to execute the Transaction Documents, to issue and sell the Note and the Warrant pursuant hereto, and to perform its obligations under the Transaction Documents, including issuing the Investor Shares on the terms set forth in this Agreement. The execution and delivery of the Transaction Documents by the Company and the issuance and sale of the Securities pursuant hereto, including without limitation the reservation of the Conversion Shares and the Warrant Shares for future insurance, have been duly and validly authorized by the Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, its shareholders or any other Person in connection therewith. The Transaction Documents have been duly and validly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar Laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

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3.03 No Conflicts.

The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Note and the Warrant hereunder will not (a) conflict with or result in a violation of the Company’s Amended and Restated Articles and any investors rights agreement or registration rights agreements applicable to the Company’s Capital Stock or Capital Stock Equivalents or the Securities, (b) conflict with, or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under, or give to others any right of termination, amendment, acceleration or cancellation of, any material agreement to which the Company or any of the Subsidiaries is a party, or (c) subject to the making of the filings referred to in Section 10, violate in any material respect any Law or any rule or regulation of the Trading Market applicable to the Company or any of the Subsidiaries or by which any of their properties or assets are bound or affected. Assuming the accuracy of the Investor’s representations in Section 4 and subject to the making of the filings referred to in Section 10, (i) no approval or authorization will be required from any governmental authority or agency, regulatory or self-regulatory agency or other third party (including the Trading Market) in connection with the issuance of the Note and the Warrant or the other transactions contemplated by this Agreement (including the issuance of the Conversion Shares upon conversion of the Note and the Warrant Shares upon exercise of the Warrant) and (ii) the issuance of the Note and the Warrant and the issuance of the Conversion Shares upon the conversion of the Note and the Warrant Shares upon exercise of the Warrant will be exempt from the registration and qualification requirements under the 1933 Act and all applicable state securities Laws.

3.04 Capitalization and Subsidiaries.

(a) The authorized Capital Stock of the Company consists of: 33,333,333 Class A Ordinary Shares and 2,780,570 Class B Ordinary Shares. As of the close of business on date of mutual execution of this Agreement, 8,437,245 Class A Ordinary Shares and 2,780,570 Class B Ordinary Shares were issued and outstanding. The Company has duly reserved up to the Required Minimum of Ordinary Shares. The Conversion Shares, when issued upon conversion of the Note in accordance with their terms, and the Warrant Shares, if and when issued upon exercise of the Warrant in accordance with their terms, will be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. No shares of the Company’s Capital Stock are subject to pre-emptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. The Company is not in violation of any provision of its Amended and Restated Articles.

(b) The Company’s subsidiaries are as disclosed in the SEC Documents (each, a “Subsidiary” and collectively, the “Subsidiaries”) and indicates for each Subsidiary (i) the authorized capital stock or other Equity Interest of such Subsidiary as of the date hereof, (ii) the number and kind of shares or other ownership interests of such Subsidiary that are issued and outstanding as of the date hereof, and (iii) the owner of such shares or other ownership interests. No Subsidiary has any outstanding stock options, warrants or other instruments pursuant to which such Subsidiary may at any time or under any circumstances be obligated to issue any shares of its capital stock or other Equity Interests. Each Subsidiary is duly organized and validly existing in good standing under the laws of its jurisdiction of formation and has all requisite power and authority to own its properties and to carry on its business as now being conducted.

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(c) Neither the Company nor any Subsidiary is bound by any agreement or arrangement pursuant to which it is obligated to register the sale of any securities under the 1933 Act. There are no outstanding securities of the Company or any of the Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem or purchase any security of the Company or any Subsidiary. There are no outstanding securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Note, the Warrant or the Investor Shares. Neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

(d) The issuance and sale of any of the Securities will not obligate the Company to issue Ordinary Shares or other securities to any other Person and will not result in the adjustment of the exercise, conversion, exchange, or reset price of any outstanding securities.

(e) The issuance and sale of the Investor Shares will not be subject to a tender offer or otherwise oblige the Investor to offer any shareholder of the Company to acquire its shares.

(f) No Shareholder Approval is required by the Company in order for the Company to execute, deliver and perform its obligations under the Transaction Documents.

3.05 SEC Documents; Financial Statements.

(a) As of the date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(b) As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, and audited by a firm that is a member of the Public Company Accounting Oversight Board consistently applied, during the periods involved (except as may be otherwise indicated in such financial statements or the notes thereto, or, in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the consolidated results of its operations and consolidated cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).

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(c) Except as disclosed in the SEC Documents, the Company and each of the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) reasonable controls to safeguard assets are in place and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

3.06 Litigation and Regulatory Proceedings.

Except as disclosed in SEC Documents, there are no material actions, causes of action, suits, claims, proceedings, inquiries or investigations (collectively, “Proceedings”) before or by any court, public board, government agency, self- regulatory organization or body pending or, to the knowledge of the executive officers of Company or any of the Subsidiaries, threatened against or affecting the Company or any of the Subsidiaries, the Ordinary Shares or any other class of issued and outstanding shares of the Company’s Capital Stock, or any of the Company’s or the Subsidiaries’ officers or directors in their capacities as such and, to the knowledge of the executive officers of the Company, there is no reason to believe that there is any basis for any such Proceeding.

3.07 No Undisclosed Events, Liabilities or Developments.

No event, development or circumstance has occurred or exists, or to the knowledge of the executive officers of the Company is reasonably anticipated to occur or exist that (a) would reasonably be anticipated to have a Material Adverse Effect or (b) would be required to be disclosed by the Company under applicable securities Laws on a registration statement filed with the SEC relating to an issuance and sale by the Company of its Ordinary Shares and which has not been publicly announced.

3.08 Compliance with Law.

The Company and each of the Subsidiaries have conducted and are conducting their respective businesses in compliance in all material respects with all applicable Laws and are in compliance in all material respects with the rules and regulations of the Trading Market. The Company is not aware of any facts which could reasonably be anticipated to lead to a delisting of the Ordinary Shares by the Trading Market in the future.

3.09 Employee Relations.

Neither the Company nor any Subsidiary is involved in any union labor dispute nor, to the knowledge of the Company, is any such dispute threatened. Neither the Company nor any Subsidiary is a party to any collective bargaining agreement. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company’s employ or otherwise terminate such officer’s employment with the Company.

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3.10 Intellectual Property Rights.

The Company and each Subsidiary owns or possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights (collectively, “IP Rights”) necessary to conduct their respective businesses as now conducted. None of the material IP Rights of the Company or any of the Subsidiaries are expected to expire or terminate within three (3) years from the date of this Agreement. Neither the Company nor any Subsidiary is infringing, misappropriating or otherwise violating any IP Rights of any other Person. No claim has been asserted, and no Proceeding is pending, against the Company or any Subsidiary alleging that the Company or any Subsidiary is infringing, misappropriating or otherwise violating the IP Rights of any other Person, and, to the Company’s knowledge, no such claim or Proceeding is threatened, and the Company is not aware of any facts or circumstances which might give rise to any such claim or Proceeding. The Company and the Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their material IP Rights.

3.11 Environmental Laws.

Except, in each case, as would not be reasonably anticipated to have a Material Adverse Effect, the Company and the Subsidiaries (a) are in compliance with any and all applicable Laws relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants, (b) have received and hold all permits, licenses or other approvals required of them under all such Laws to conduct their respective businesses and (c) are in compliance with all terms and conditions of any such permit, license or approval.

3.12 Title to Assets.

The Company and the Subsidiaries have good and marketable title to all personal property owned by them which is material to their respective businesses, in each case free and clear of all liens, encumbrances and defects. Any real property and facilities held under lease by the Company or any Subsidiary are held under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and the Subsidiaries.

3.13 Insurance.

The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any of the Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew all existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers.

3.14 Regulatory Permits.

The Company and the Subsidiaries have in full force and effect all certificates, approvals, authorizations and permits from all regulatory authorities and agencies necessary to own, lease or operate their respective properties and assets and conduct their respective businesses, and neither the Company nor any Subsidiary has received any notice of Proceedings relating to the revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits with respect to which the failure to hold would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

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3.15 No Materially Adverse Contracts, Etc.

Neither the Company nor any of the Subsidiaries is (a) subject to any charter, corporate or other legal restriction, or any judgment, decree or order which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect or (b) a party to any contract or agreement which in the judgment of the Company’s management has or would reasonably be anticipated to have a Material Adverse Effect.

3.16 Taxes.

The Company and the Subsidiaries each has made or filed, or caused to be made or filed, all United States federal, and applicable state, local and non-U.S. tax returns, reports and declarations required by any jurisdiction to which it is subject and has paid all taxes and other governmental assessments and charges that are material in amount, required to be paid by it, regardless of whether such amounts are shown or determined to be due on such returns, reports and declarations, except those being contested in good faith by appropriate proceedings and for which it has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and, to the knowledge of the Company, there is no basis for any such claim.

3.17 Solvency.

After giving effect to the receipt by the Company of the proceeds from the Note (a) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; and (b) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no actual or constructive knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction.

3.18 Investment Company.

The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

3.19 Certain Transactions.

Other than as disclosed in the SEC Documents, there are no contracts, transactions, arrangements or understandings between the Company or any of its Subsidiaries, on the one hand, and any director, officer or employee thereof on the other hand, that would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC in the Company’s Form 20-F or proxy statement pertaining to an annual meeting of shareholders.

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3.20 No General Solicitation.

Neither the Company, nor any of its Affiliates, nor any person acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Note pursuant to this Agreement.

3.21 Acknowledgment Regarding the Investor’s Purchase of the Note and the Warrant.

The Board of Directors has approved the execution of the Transaction Documents and the issuance and sale of the Note and the Warrant, based on its own independent evaluation and determination that the terms of the Transaction Documents are reasonable and fair to the Company and in the best interests of the Company and its shareholders. The Company is entering into the Transaction Documents and is issuing and selling the Note and the Warrant voluntarily and without economic duress. The Company has had independent legal counsel of its own choosing review the Transaction Documents and advise the Company with respect thereto. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length purchaser with respect to its Note and the Warrant and the transactions contemplated hereby and that neither the Investor nor any person affiliated with the Investor is acting as a financial advisor to, or a fiduciary of, the Company (or in any similar capacity) with respect to execution of the Transaction Documents or the issuance of the Note and the Warrant or any other transaction contemplated hereby.

3.22 No Brokers’, Finders’ or Other Advisory Fees or Commissions.

No brokers, finders or other similar advisory fees or commissions will be payable by the Company or any Subsidiary or by any of their respective agents with respect to the issuance of the Note or any of the other transactions contemplated by this Agreement.

3.23 OFAC.

None of the Company nor any of the Subsidiaries nor, to the best knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company and/or any Subsidiary has been or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use any proceeds received from the Investor, or lend, contribute or otherwise make available such proceeds to its Subsidiaries or to any affiliated entity, joint venture partner or other person or entity, to finance any investments in, or make any payments to, any country or person currently subject to any of the sanctions of the United States administered by OFAC.

3.24 No Foreign Corrupt Practices.

None of the Company or any of the Subsidiaries has, directly or indirectly: (a) made or authorized any contribution, payment or gift of funds or property to any official, employee or agent of any governmental authority of any jurisdiction except as otherwise permitted under applicable Law; or (b) made any contribution to any candidate for public office, in either case, where either the payment or the purpose of such contribution, payment or gift was, is, or would be prohibited under the Foreign Corrupt Practices Act or the rules and regulations promulgated thereunder or under any other legislation of any relevant jurisdiction covering a similar subject matter applicable to the Company or its Subsidiaries and their respective operations and the Company has instituted and maintained policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance with such legislation.

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3.25 Anti-Money Laundering.

The operations of the Company and each Subsidiary are and have been conducted at all times in compliance with all applicable anti-money laundering laws, regulations, rules and guidelines in its jurisdiction of incorporation and in each other jurisdiction in which such entity, as the case may be, conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental authority involving the Company or its Subsidiaries with respect to any of the Money Laundering Laws is, to the best knowledge of the Company, pending, threatened or contemplated.

3.26 Disclosure.

The Company confirms that neither it, nor to its knowledge, any other Person acting on its behalf has provided the Investor or its agents or counsel with any information that the Company believes constitutes material, non-public information. The Company understands and confirms that the Investor will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosures provided to the Investor regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement) are true and correct in all material respects and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

3.27 No Other Representations.

Except for the representations and warranties set forth in this Agreement and in the other Transaction Documents, the Company makes no other representations or warranties to the Investor.

4 REPRESENTATIONS AND WARRANTIES OF the INVESTOR

The Investor represents and warrants to the Company:

4.01 Organization and Qualification.

The Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.

4.02 Authorization; Enforcement; Compliance with Other Instruments.

The Investor has the requisite power and authority to enter into the Transaction Documents and to perform its obligations under the Transaction Documents. The execution and delivery by the Investor of the Transaction Documents to which it is a party have been duly and validly authorized by the Investor’s governing body, as necessary, and no further consent or authorization is required. The Transaction Documents to which it is a party have been duly and validly executed and delivered by the Investor and constitute valid and binding obligations of the Investor, enforceable against the Investor in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

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4.03 No Conflicts.

The execution, delivery and performance of the Transaction Documents to which it is a party by the Investor and the purchase of the Note and the Warrant by the Investor will not (a) conflict with or result in a violation of the Investor’s organizational documents, if applicable, (b) conflict with, or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which the Investor is a party, or (c) violate any Law applicable to the Investor or by which any of the Investor’s properties or assets are bound or affected. No approval or authorization will be required from any governmental authority or agency, regulatory or self-regulatory agency or other third party in connection with the purchase of the Note and the Warrant and the other transactions contemplated by this Agreement.

4.04 Investment Intent; Accredited Investor.

The Investor is purchasing the Note and the Warrant for its own account, for investment purposes, and not with a view towards distribution. At the time such Investor was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants, it will be an “accredited investor” as such term is defined in Rule 501(a) of Regulation D of the 1933 Act. The Investor has, by reason of its business and financial experience, such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of (a) evaluating the merits and risks of an investment in its Note, its Warrant and the Investor Shares and making an informed investment decision, (b) protecting its own interests and (c) bearing the economic risk of such investment for an indefinite period of time. Such Investor is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Investor, any other general solicitation or general advertisement.

4.05 Acknowledgement of Risk; Opportunity to Discuss.

The Investor acknowledges that an investment in the Company is speculative and subject to numerous risks, including those risks described in the SEC Documents. The Investor has reviewed and understands the risks related to the Company and its business as described in the SEC Documents. The Investor has received all materials relating to the business, finance and operations of the Company and the Subsidiaries as it has requested and has had an opportunity to discuss the business, management and financial affairs of the Company and the Subsidiaries with the Company’s management. In making its investment decision, the Investor has relied solely on its own due diligence performed on the Company by its own representatives.

4.06 Exculpation by Investor.

Other than the representations, warranties, covenants and agreements of the Company set forth in this Agreement, the Investor acknowledges that it is not relying upon any Person in making its investment or decision to invest in the Company.

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4.07 No Other Representations.

Except for the representations and warranties set forth in this Agreement and in other Transaction Documents, the Investor makes no other representations or warranties to the Company.

5 TRANSFER

5.01 Restrictions on Transfer of the Investor Shares.

The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of an Investor, the Company may, in its reasonable discretion, require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such Securities under the Securities Act. The Investor shall be free to transfer the Investor Shares and, when issued and either registered on an effective registration statement or issued in accordance with Rule 144, any certificates representing the Investor Shares shall not bear any legend.

5.02 Restrictions on Transfer of the Note and the Warrant.

The Note and/or the Warrant shall be freely transferrable by the Investor, in whole or in parts, except for the transferees listed under Schedule 5.02 hereto.

6 COVENANTS OF THE COMPANY

6.01 Disposition of Assets

So long as the Company shall have any obligation under the Note, the Company shall not, without the Investor’s prior written consent, sell, lease, license or otherwise dispose of any significant portion of its assets outside the ordinary course of business.

6.02 Affiliate Transactions

So long as the Company shall have any obligation under the Note, the Company shall not, without the Investor’s prior written consent, lend money, give credit, make advances to or enter into any similar transaction with any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Company.

6.03 Preservation of Business and Existence

So long as the Company shall have any obligation under the Note, the Company shall not, without the Investor’s prior written consent, (a) change the nature of its business in a material respect or (b) sell, divest, change the structure of any material assets other than in the ordinary course of business. In addition, so long as the Company shall have any obligation under the Note, the Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.

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6.04 Stockholder Rights Plan.

No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Investor is an “Acquiring Person” or within any similar definition under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Investor could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Investor.

6.05 Furnishing of Information.

As long as the Investor owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the 1934 Act. As long as the Investor owns Securities, if the Company is not required to file reports pursuant to the 1934 Act, it will prepare and furnish to the Investor and make publicly available in accordance with Rule 144(c) such information as is required for the Investor to sell the Investor Shares under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell the Investor Shares without registration under the 1933 Act within the limitation of the exemptions provided by Rule 144 or other applicable exemptions.

6.06 Integration.

The Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in 2 of the 1933 Act) that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the 1933 Act of the sale of the Securities to the Investor.

6.07 Notification of Certain Events.

The Company shall give prompt written notice to the Investor of (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the consummation of the transactions contemplated by this Agreement or any other Transaction Document, or (b) any Proceeding pending or, to the Company’s knowledge, threatened against a party relating to the transactions contemplated by this Agreement or any other Transaction Document.

6.08 Available Shares.

The Company shall at all times keep authorized and reserved and available for issuance, free of pre-emptive rights, the Required Minimum of Ordinary Shares. If the Company determines at any time that it does not have a sufficient number of authorized Ordinary Shares to reserve and keep available for issuance as described in this Section 6.08, the Company shall use all commercially reasonable efforts to increase the number of authorized Ordinary Shares by seeking approval from its shareholders for the authorization of such additional shares.

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6.09 Use of Proceeds.

The Company shall use the proceeds from the sale of the Note and the Warrant for general corporate purposes, and shall not use such proceeds: (a) for the redemption of any Capital Stock or Capital Stock Equivalents, (b) in violation of OFAC regulations, or (c) to lend money, give credit, or make advances to any officers, directors, employees or Affiliate of the Company.

6.10 Non-Circumvention.

The Company hereby covenants and agrees that the Company will not, by amendment of its Amended and Restated Articles or other organizational documents, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement, and will at all times in good faith carry out all the provisions of the Transaction Documents and take all action as may be required to protect the rights of the Investor.

6.11 Securities Laws Disclosure; Publicity.

The Company shall, by 9:00 a.m. (New York City time) on the Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and shall, within four (4) Trading Days following the date hereof, file a Form 6-K report disclosing the material terms of the transactions contemplated hereby and including this Agreement as an exhibit thereto; provided, that the Company may not issue such press release or file such Form 6-K without the prior written consent of the Investor. The Company shall not issue any press release nor otherwise make any such public statement regarding the Investor or the Transaction Documents without the prior written consent of the Investor, except if such disclosure is required by Law, in which case the Company shall (a) ensure that such disclosure is restricted and limited in content and scope to the maximum extent permitted by Law to meet the relevant disclosure requirement and (b) provide a copy of the proposed disclosure to the Investor for review prior to release and the Company shall incorporate the reasonable comments of the Investor. Following the execution of this Agreement, the Investor and its Affiliates and/or advisors may, upon receiving the prior written consent of the Investor, place announcements on their respective corporate websites and in financial and other newspapers and publications (including, without limitation, customary “tombstone” advertisements) describing the Investor’s relationship with the Company under this Agreement and including the name and corporate logo of the Company. Notwithstanding anything herein to the contrary, to comply with United States Treasury Regulations Section 1.6011-4(b)(3)(i), each of the Company and the Investor, and each employee, representative or other agent of the Company or the Investor, may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment, and the U.S. federal and state income tax structure, of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to such recipient.

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6.12 Indemnification of the Investor.

(a) The Company will indemnify and hold the Investor, its Affiliates and its directors, officers, managers, shareholders, members, partners, employees, representatives and agents and permitted successors and assigns (each, an “Investor Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation and defense (collectively, “Losses”) that any such Investor Party may suffer or incur as a result of or relating to:

(i) Any breach or inaccuracy, in any material respect, of any representation, warranty, covenant or agreement made by the Company in any Transaction Document;

(ii) any material misrepresentation made by the Company in any Transaction Document or in any SEC Document;

(iii) any omission to state any material fact necessary in order to make the statements made in any SEC Document, in light of the circumstances under which they were made, not misleading;

(iv) any Proceeding before or by any court, public board, government agency, self-regulatory organization or body based upon, or resulting from the execution, delivery, performance or enforcement of any of the Transaction Documents or the consummation of the transactions contemplated thereby, and whether or not the Investor is party thereto by claim, counterclaim, crossclaim, as a defendant or otherwise, or if such Proceeding is based upon, or results from, any of the items set forth in clauses (i) through (iii) above.

(b) In addition to the indemnity contained herein, the Company will reimburse the Investor Party for its reasonable and documented legal and other expenses (including the cost of any investigation therewith) incurred in connection therewith, as and when such expenses are incurred.

(c) The provisions of this 6.12 shall survive the termination or expiration of this Agreement for a period of two (2) years thereafter.

6.13 The Company’s obligations to indemnify an Investor Party pursuant to Section 6.12 shall not exceed the Principal Amount (together with all accrued and unpaid interest, liquidated damages and/or any other amounts which may become due under the Note), except that such limitation shall not apply in respect of (i) any Losses arising as a result of any breach or inaccuracy of the covenants or agreements of the Company contained in the Note or the Warrant or in Sections 6, 7, 8, 9, 10 or 11 of this Agreement; (ii) any Losses arising as a result of willful misconduct or gross negligence by the Company or any of its Subsidiaries, or (iii) any Losses payable by an Investor Party to a third party pursuant to any settlement or determination of any claim brought by a third party against an Investor Party in connection with the transactions contemplated by the Transaction Documents.

6.14 Non-Public Information.

Except to the extent necessary to fulfill its notice, disclosure or similar obligations hereunder or under any Transaction Document, the Company covenants and agrees that neither it nor any other Person acting on its behalf will provide the Investor or its agents or counsel with any information that the Company believes constitutes material, non-public information. Except in connection with the fulfillment of its notice, disclosure or similar obligations hereunder or under any Transaction Document, to the extent the Company provides an Investor with material, non-public information, the Company shall publicly disclose such information within forty-eight (48) hours of providing the information to the Investor. The Company understands and confirms that the Investor shall be relying on the foregoing representation in effecting transactions in securities of the Company.

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6.15 Listing of Securities.

The Company shall: (a) in the time and manner required by each Trading Market on which the Ordinary Shares are listed, prepare and file with such Trading Market an additional shares listing application covering the Investor Shares, (b) take all steps necessary to cause such shares to be approved for listing on each Trading Market on which the Ordinary Shares are listed as soon as possible thereafter, (c) provide to the Investor evidence of such listing, and (d) maintain the listing of such shares on each such Trading Market for so long as any Investor holds Investor Shares.

6.16 Corporate Existence.

The Company shall, and shall cause each of its Subsidiaries to, maintain in full force and effect its corporate existence, rights and franchises and all licenses and other rights to use property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business.

6.17 Investment Company Act.

The Company shall conduct its businesses in a manner so that it will not become subject to, or required to be registered under, the Investment Company Act of 1940, as amended.

6.18 Payment of Taxes, Etc.

The Company shall, and shall cause each of its Subsidiaries to, promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company and the Subsidiaries; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company or such Subsidiaries shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company and such Subsidiaries will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor.

7 CLOSING CONDITIONS

7.01 Conditions Precedent to the Closing.

(a) Conditions Precedent to the Obligations of the Investor for the Closing. The obligation of the Investor to fund the Note and acquire its Warrant at the Closing is subject to the satisfaction or waiver by the Investor, at or before the date of such Closing, of each of the following conditions:

(i) Required Documentation. The Company must have delivered to counsel to the Investor copies of all resolutions duly adopted by the Board of Directors, or any such other documentation of the Company approving the Transaction Documents and any of the transactions contemplated thereby.

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(ii) Minimum Aggregate Commitments and Purchase.

The Company shall have received executed copies of securities purchase agreements dated on or around the date of this Agreement which provide for the purchase and issue of convertible notes on substantially the same economic terms as the Note (save in respect of any maximum percentage ownership limits) in an aggregate principal amount of not less than USD $8,750,000 (when aggregated with the Principal Amount of the Note to be purchased and issued hereunder). All conditions precedent to closing under each such securities purchase agreement must have been satisfied (or duly waived by the party entitled to do so thereunder, in accordance with its terms).

(iii) Consents and Permits. The Company must have obtained and delivered to the Investor copies of all necessary permits, approvals, and registrations necessary to effect the Transaction Documents and any of the transactions contemplated thereby, including pursuant to Section 3.14 of this Agreement.

(iv) No Event(s) of Default. The Investor must be of the reasonable opinion that no Event of Default as set forth in Section 8.01 of this Agreement has occurred and no Event of Default would result from the execution of any of the Transaction Documents or the transactions contemplated thereby.

(v) Representations and Warranties. The representations and warranties of the Company contained herein shall be true and correct as of the date when made and as of the Closing as though made on and as of the date of such Closing;

(vi) Performance. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to such Closing;

(vii) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; and

(viii) No Suspensions of Trading in the Ordinary Shares; Listing. Trading in the Ordinary Shares shall not have been suspended by the SEC or any Trading Market (except for any suspensions of trading of not more than one day on which the Trading Market is open solely to permit dissemination of material information regarding the Company) at any time since the date of execution of this Agreement, and the Ordinary Shares shall have been at all times since such date listed for trading on a Trading Market.

(ix) No Material Adverse Effect. There shall not have occurred a Material Adverse Effect since the execution and delivery of this Agreement.

(b) Conditions Precedent to the Obligations of the Company for the Closing. The obligation of the Company to issue the Note and the Warrant to the Investor is subject to the satisfaction or waiver by the Company, at or before the date of the Closing of each of the following conditions:

(i) Representations and Warranties. The representations and warranties of the Investor contained herein shall be true and correct in all material respects as of the date when made and as of the Closing as though made on and as of the dates of such Closing;

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(ii) Performance. The Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Investor at or prior to the Closing; and

(iii) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

8 EVENTS OF DEFAULT

8.01 Events of Default.

The occurrence of any of the following events shall be an “Event of Default” under this Agreement:

(a) an Event of Default under the Note (and as defined therein);

(b) any of the representations or warranties made by the Company or any of its agents, officers, directors, employees or representatives in any Transaction Document or public filing being inaccurate, false or misleading in any material respect, as of the date as of which it is made or deemed to be made, or any certificate or financial or other written statements furnished by or on behalf of the Company to the Investor or any of its representatives, is inaccurate, false or misleading, in any material respect, as of the date as of which it is made or deemed to be made or on any date of the Closing; or

(c) a failure by the Company to comply with any of its covenants or agreements set forth in Sections 6, 7, 8, 9, 10 or 11 of this Agreement.

8.02 Investor Right to Investigate an Event of Default.

If in the reasonable opinion of the Investor, an Event of Default has occurred, or is or may be continuing:

(a) the Investor may notify the Company that they wish to investigate such purported Event of Default;

(b) the Company shall cooperate with the Investor in such investigation;

(c) the Company shall comply with all reasonable requests made by the Investor to the Company in connection with any investigation by the Investor and shall (i) provide all information requested by the Investor in relation to the Event of Default; provided, that the Investor agrees that any materially price sensitive information and/or non-public information will be subject to confidentiality, and (ii) provide all such requested information within three (3) Business Days of such request; and

(d) the Company shall pay all reasonable costs incurred by the Investor in connection with any such investigation.

8.03 Remedies Upon an Event of Default

(a) If an Event of Default occurs pursuant to Section 8.01(a), the Investor shall have such remedies as are set forth in the Note.

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(b) If any Event of Default occurs and is not remedied following written notice provided by the Investor to the Company within (i) two (2) Business Days for an Event of Default occurring by the Company’s failure to comply with Section 8.01(c) or (ii) ten (10) Business Days for an Event of Default occurring pursuant to Section 8.01(b), the Investor may, by written notice to the Company, terminate this Agreement effective as of the date set forth in the Investor’s notice.

9 TERMINATION

9.01 Events of Termination. This Agreement:

(a) may be terminated:

(i) by the Investor on the occurrence or existence of a Securities Termination Event;

(ii) by the mutual written consent of the Company and the Investor, at any time;

(iii) by the Investor, in accordance with Section 8.03(b).

9.02 Automatic Termination.

This Agreement will automatically terminate, without further action by the parties, at the time after the Closing that the Principal Amount outstanding under the Note and any accrued but unpaid interest is reduced to zero (0), whether as a result of conversion or repayment by the Company in accordance with the terms of this Agreement and the Note.

9.03 Effect of Termination.

(a) Subject to Section 9.03(b), each party’s right of termination under Section 9.01 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies.

(b) If the Investor terminates this Agreement under Section 8.03(b):

(i) the Investor may declare, by notice to the Company, all outstanding obligations by the Company to the Investor under the Transaction Documents to be due and payable (including, without limitation, the immediate repayment of any Principal Amount outstanding under the Note plus accrued but unpaid interest, liquidated damages and/or any other amounts which may become due under the Note) without presentment, demand, protest or any other notice of any kind, all of which are expressly waived by the Company, anything to the contrary contained in this Agreement or in any other Transaction Document notwithstanding; and

(ii) the Company must within ten (10) Business Days of such notice being received, pay to the Investor in immediately available funds the outstanding Principal Amount of the Note plus all accrued interest thereon, liquidated damages and/or any other amounts which may become due under the Note (if any), unless this Agreement has been terminated as a result of an Event of Default and provided that (A) subsequent to the termination under 9.01(a)(i), the Investor is not prohibited by Law or otherwise from exercising its conversion rights pursuant to this Agreement or the Note, (B) the Investor actually exercises its conversion rights under this Agreement or the Note, and (C) the Company otherwise complies in all respects with its obligation to issue Conversion Shares in accordance with the Note (which obligation will survive termination). Such payments shall be subject to the provisions of the Note.

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(c) Upon termination of this Agreement, the Investor will not be required to fund any further amount after the date of termination of the Agreement, provided, that termination will not affect any undischarged obligation under this Agreement, and any obligation of the Company to pay or repay any amounts owing to the Investor hereunder and which have not been repaid at the time of termination.

(d) Nothing in this Agreement will be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement.

10 REGISTRATION RIGHTS

10.01 Registration.

(a) Registration Statement. Promptly, but in any event no later than 30 Business Days from the date of the Closing, the Company shall prepare and file with the SEC a Registration Statement covering the resale of all of the Investor Shares resulting from each of the Note or the Warrant to which such conversion may refer. The foregoing Registration Statement shall be filed on Form F-3 (the “Shelf Registration Statement”), as permitted by Rule 415 of the Securities Act (or such other similar rule as is then applicable) for the public resale of such Investor Shares then outstanding on a delayed or continuous basis, or Form F-1 or any successor form thereto. The Registration Statement (and each amendment or supplement thereto) shall be provided to the Investor and its counsel at least five (5) Business Days prior to its filing and the Company shall incorporate all reasonable comments provided by the Investor or its counsel. Each Investor shall provide all reasonably requested information, including a selling shareholder questionnaire, that the Company reasonably requires in order to file the Registration Statement.

(b) Expenses.

Except as otherwise expressly provided herein, the Company will pay all fees and expenses incident to the performance of or compliance with this Section 10, including, without limitation, all fees and expenses associated with effecting the registration of the Investor Shares, including, without limitation, all filing and printing fees, the Company’s counsel and accounting fees and expenses, costs associated with clearing the Investor Shares for sale under applicable state securities laws, listing fees, fees and expenses of one counsel to the Investor and the Investor’s reasonable expenses in connection with the registration, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Investor Shares being sold.

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(c) Effectiveness.

The Company shall use its reasonable best efforts to have the Registration Statement declared effective as soon as practicable after filing thereof but in no event later than the date that is (i) 60 Business Days following the date of the Closing if the Registration Statement is not subject to review by the SEC or (ii) 90 Business Days following the date of the Closing if the Registration Statement is subject to review by the SEC. The Company shall notify the Investor by e-mail as promptly as practicable, and in any event, within twenty-four (24) hours, after the Registration Statement is declared effective and shall simultaneously provide the Investor with copies of any related Prospectus to be used in connection with the sale or other disposition of the securities covered thereby. If, at any time, a Shelf Registration Statement ceases to be effective, the Company shall use its reasonable best efforts to file and use its reasonable best efforts to cause to become effective a new “evergreen” Shelf Registration Statement providing for an offering to be made on a continuous basis of all of the Investor Shares. Such Shelf Registration Statement shall be filed on Form F-3 or, if Form F-3 is unavailable to the Company, on Form F-1.

(d) Piggyback Registration Rights.

If the Company at any time determines to file a registration statement under the 1933 Act to register the offer and sale, by the Company, of Ordinary Shares (other than (x) on Form S-4 or Form S-8 under the 1933 Act or any successor forms thereto, (y) a Form F-3 registering a “universal shelf” of Company securities, and any offering registered pursuant to such shelf registration (including, without limitation, any “at-the-market” offering), or (z) a registration of securities solely relating to an offering and sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit plan arrangement), the Company shall, as soon as reasonably practicable, give written notice to the Investor of its intention to so register the offer and sale of Ordinary Shares and, upon the written request given within five (5) Business Days after delivery of any such notice by the Company of an Investor to include in such registration its Investor Shares (which request must (a) be approved by the Investor and (b) specify the number of Investor Shares proposed to be included in such registration), the Company shall cause all the Investor Shares to be included in such registration statement on the same terms and conditions as the Ordinary Shares otherwise being sold pursuant to such registered offering.

10.02 Company Obligations.

The Company will use its commercially reasonable efforts to effect the registration of the Investor Shares in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

(a) use its reasonable best efforts to cause the Registration Statement to become effective and to be continuously effective, supplemented, amended or replaced to the extent necessary to ensure that it is available for the resale of all Investor Shares until the date on which all Investor Shares are either covered by the Registration Statement or may be sold without restriction, including, without limitation, volume or manner-of-sale restrictions, pursuant to Rule 144 or have been sold by the Investor (the “Effectiveness Period”) and advise the Investor in writing when the Effectiveness Period has expired;

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(b) prepare and file with the SEC such amendments and post-effective amendments and supplements to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the distribution of all of the Investor Shares covered thereby;

(c) furnish to the Investor and its legal counsel, without charge, (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one copy of the Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to the Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Investor may reasonably request in order to facilitate the disposition of the Investor Shares that are covered by the related Registration Statement;

(d) immediately notify the Investor if the Registration Statement or Prospectus is not available for use;

(e) use its commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness of the Registration Statement or Prospectus and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible time and notify the Investor of the issuance of any such order and the resolution thereof, or its receipt of notice of the initiation or threat of any proceeding for such purpose;

(f) if the Ordinary Shares are not then listed on a Trading Market, prior to any public offering of Investor Shares, use its commercially reasonable efforts to register or qualify or cooperate with the Investor and its counsel in connection with the registration or qualification of the Investor Shares for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Investor and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Investor covered by the Registration Statement and the Company shall promptly notify the Investor of any notification with respect to the suspension of the registration or qualification of any of the Investor Shares for sale under the securities or blue sky laws of such jurisdictions or its receipt of notice of the initiation or threat of any proceeding for such purpose;

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(g) promptly notify the Investor, at any time prior to the end of the Effectiveness Period, upon discovery that, or upon the happening of any event as a result of which, the Registration Statement or Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of the Prospectus, in light of the circumstances in which they were made), and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such Registration Statement or Prospectus as may be necessary so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of such Prospectus, in light of the circumstances in which they were made);

(h) hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to complete the Registration Statement or to avoid or correct a misstatement or omission in the Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement, and upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information; and

(i) take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of all Investor Shares (as and when such disposition is desired by the Investor) pursuant to the Registration Statement.

10.03 Indemnification.

(a) Indemnification by the Company.

The Company will indemnify and hold harmless the Investor Parties, from and against any Losses to which they may become subject under the 1933 Act or otherwise, arising out of, relating to or based upon: (i) any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, any preliminary Prospectus, final Prospectus or other document, including any blue sky application (as defined below), or any amendment or supplement thereof or any omission or alleged omission of a material fact required to be stated therein or, in the case of the Registration Statement, necessary to make the statements therein not misleading or, in the case of any preliminary Prospectus, final Prospectus or other document, necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (ii) any blue sky application or other document executed by the Company specifically for that purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or all of the Investor Shares under the securities laws thereof (any such application, document or information herein called a “Blue Sky Application”); (iii) any violation or alleged violation by the Company or its agents of the 1933 Act, the 1934 Act or any similar federal or state law or any rule or regulation promulgated thereunder applicable to the Company or its agents and relating to any action or inaction required of the Company in connection with the registration or the offer or sale of the Investor Shares pursuant to any Registration Statement; or (iv) any failure to register or qualify the Investor Shares included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on an Investor’s behalf and will reimburse the Investor Parties for any legal or other expenses reasonably incurred by them in connection with investigating, preparing or defending any such Losses; provided, however, that the Company will not be liable in any such case if and to the extent, but only to the extent, that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by an Investor or any such controlling Person in writing specifically for use in such Registration Statement or Prospectus.

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(b) Conduct of Indemnification Proceedings.

Any Person entitled to indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim, action, suit or proceeding with respect to which it seeks indemnification following such Person’s receipt of, or such Person otherwise become aware of, the commencement of such claim, action, suit or proceeding and (ii) permit such indemnifying party to assume the defense of such claim, action, suit or proceeding with counsel reasonably satisfactory to the indemnified party; provided, however, that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (A) the indemnifying party has agreed to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such Person or (C) in the reasonable judgment of any such Person, based upon written advice of its counsel, a conflict of interest exists between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that the failure or delay of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure or delay to give notice shall materially adversely affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

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(c) Contribution.

If for any reason the indemnification provided for in the preceding Section 10.03(a) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No Person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation. The indemnity and contribution agreements contained in this Section are in addition to any other rights or remedies that any indemnified party may have under applicable law, by separate agreement or otherwise.

11 RIGHTS TO FUTURE STOCK ISSUANCES

11.01 The following provisions of this Section 11 shall apply for so long as the Investor holds at least three (3) percent of the Equity Interests (and for the purpose of calculating the foregoing percentage, any Ordinary Share Equivalents shall be deemed to have converted into, or been exercised for, the maximum aggregate number of Ordinary Shares potentially issuable thereunder as at the date in question).

11.02 Subject to the terms and conditions of this Section 11 and applicable securities laws, if at any time the Company proposes to offer or sell any New Securities, the Company shall first offer to the Investor the opportunity to purchase its Pro Rata Portion (as defined below) of such New Securities. The Investor shall be entitled to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate among itself and its Affiliates.

11.03 The Company shall give notice no fewer than three (3) Business Days in advance of the proposed date of the sale of New Securities (the “Offer Notice”) to the Investor, stating (a) its bona fide intention to offer such New Securities, (b) the number of such New Securities to be offered, and (c) the price and terms, if any, upon which it proposes to offer such New Securities.

11.04 By notification to the Company within five (5) days after the Offer Notice is given, the Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, its Pro Rata Portion of such New Securities. “Pro Rata Portion” means the ratio of (x) the Total Potential Investor Shares and (y) the aggregate number of Ordinary Shares outstanding and entitled to participate in such offer (including the Total Potential Investor Shares but excluding the New Securities); provided that the Pro Rata Portion shall be capped in accordance with this Agreement and the Note. The “Total Potential Investor Shares” means (without duplication) the aggregate of (i) the Ordinary Shares held by the Investor and its Affiliates, (ii) the number of Ordinary Shares into which the total outstanding Principal Amount of the Note held by the Investor or any Affiliate (together with all accrued and unpaid interest, liquidated damages and/or any other amounts which may become due under the Note) may be converted by the terms of the Note, and (iii) the number of Ordinary Shares for which any outstanding and unexercised Warrant held by the Investor or any Affiliate may be exercised, in each case, as at the date of such offer. The closing of any sale pursuant to this Section 11 shall occur within the later of (x) ninety (90) days of the date that the Offer Notice is given and (y) the date of initial sale of New Securities pursuant to Section 11.05.

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11.05 The Company may, during the ninety (90) day period following the expiration of the period provided in Section 11.04, offer and sell the remaining portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investor in accordance with this Section 11.

12 GENERAL PROVISIONS

12.01 Fees and Expenses.

Except as specified above, the Company shall pay the fees and expenses of the Investor’s and its own advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents in an amount not to exceed USD [*] in the aggregate. The Company shall pay all stamp and other taxes and duties levied in connection with the sale of the Note and the Warrant.

12.02 Notices.

Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section prior to 5:00 p.m. (New York time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section on a day that is not a Business Day or later than 5:00 p.m. (New York time) on any date and earlier than 11:59 p.m. (New York time) on such date, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

If to the Company:

REE Automotive Ltd.
Kibbutz Glil-Yam
Israel 4690500

Attention: Daniel Barel

Email: Daniel@ree.auto

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

Sullivan & Worcester LLP

1633 Broadway

New York, New York 10019

Attention: Ron Ben-Bassat, Esq.

Email: rbenbassat@sullivanlaw.com

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If to the Investor:

[*]

Attention: [*]

Email: [*]

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

Cadwalader, Wickersham & Taft LLP

100 Bishopsgate

London EC2N 4AG

United Kingdom

Attention: Joanna Valentine; Nick Ramphal and Richard Brand

Email: Joanna.Valentine@cwt.com; Nick.Ramphal@cwt.com and Richard.Brand@cwt.com

12.03 Severability.

If any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Agreement will not in any way be affected or impaired thereby.

12.04 Governing Law.

This Agreement shall be governed by and construed in accordance with the Laws of the State of New York (including section 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Laws and Rules 327(b)), without reference to principles of conflict of laws or choice of laws.

12.05 Jurisdiction and Venue.

Any action, proceeding or claim arising out of, or relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York (Commercial Division), or in the United States District Court for the Southern District of New York. The Company and the Investor irrevocably submit to the jurisdiction of such courts, which jurisdiction shall be exclusive, and hereby waive any objection to such exclusive jurisdiction or that such courts represent an inconvenient forum. The prevailing party in any such action shall be entitled to recover its reasonable and documented attorneys’ fees and out-of-pocket expenses relating to such action or proceeding.

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12.06 WAIVER OF RIGHT TO JURY TRIAL.

THE COMPANY AND THE INVESTOR HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

12.07 Survival.

The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Securities.

12.08 Entire Agreement.

The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

12.09 Amendments; Waivers.

No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Investor. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

12.10 Construction.

The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

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12.11 Successors and Assigns.

This Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the Company and the Investor and its respective successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor. The Investor may assign any or all of its rights under this Agreement to any Person to whom it assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the Investor and such transferee is an accredited investor.

12.12 Further Assurances.

Each party hereto 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.

12.13 Counterparts.

This Agreement may be executed in identical counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties. Signature pages delivered by facsimile or e-mail shall have the same force and effect as an original signature.

12.14 Specific Performance.

The Company acknowledges that monetary damages alone would not be adequate compensation to the Investor for a breach by the Company of this Agreement and the Investor may seek an injunction or an order for specific performance from a court of competent jurisdiction if (a) the Company fails to comply or threatens not to comply with this Agreement or (b) the Investor has reason to believe that the Company will not comply with this Agreement.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned have executed this Securities Purchase Agreement as of the date first set forth above.

COMPANY:
REE AUTOMOTIVE LTD.
By:
	Name:	Daniel Barel
	Title:	Chief Executive Officer
INVESTOR:
[*]
By:
	Name:
	Title:

[Signature Page to Securities Purchase Agreement]

Exhibit A

Form of Note

A-1

Exhibit B

Form of Warrant

B-1

EX-99.2

Exhibit 99.2

THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT.

REE Automotive Ltd.
Convertible Promissory Note
Dated: November [●], 2023 (the “Issue Date”) 

Principal Amount: USD[●]

FOR VALUE RECEIVED, REE Automotive Ltd., a company organized under the Laws of the State of Israel (the “Company”), hereby promises to pay to the order of [●] (together with its successors and permitted assigns, the “Investor”) the principal sum of USD[●] (together with any compounded interest as provided below, the “Principal Amount”) pursuant to the terms of this Convertible Promissory Note (this “Note”). The Investor shall pay the Principal Amount on the Issue Date set out above.

The maturity date of this Note shall be the five-year anniversary of the Issue Date, or November [●], 2028 (the “Maturity Date”), and is the date upon which the Principal Amount, together with all accrued and unpaid interest, costs, expenses, liquidated damages and any other amounts which may become due hereunder, shall be due and payable in full by wire transfer of funds to the Investor’s account, to the extent not already converted into Ordinary Shares pursuant to the operation of this Note.

This Note may not be repaid in whole or in part except as otherwise explicitly set forth herein. This Note is unsecured.

All payments under or pursuant to this Note shall be made in United States Dollars in immediately available funds to the Investor at the address of the Investor set forth in the Purchase Agreement (as hereinafter defined) or at such other place as the Investor may designate from time to time in writing to the Company or by wire transfer of funds to the Investor’s account designated in writing by the Investor to the Company.

ARTICLE I

Section 1.01 Purchase Agreement. This Note has been executed, delivered and issued pursuant to the Securities Purchase Agreement, dated as of November 27, 2023 (as the same may be amended from time to time, the “Purchase Agreement”), by and between the Company and the Investor. Capitalized terms used and not otherwise defined herein shall have the meanings set forth for such terms in the Purchase Agreement.

Section 1.02 Interest. Interest shall accrue to the Investor on the aggregate unconverted and then outstanding Principal Amount at the rate of 10% (ten percent) per annum; it shall be compounded on each anniversary of the Issue Date when it shall be added to and form part of the Principal Amount then outstanding, and shall be computed on the basis of a 360-day year and shall accrue daily commencing on the Issue Date, until payment in full of the outstanding Principal Amount or conversion into Ordinary Shares pursuant to the operation of Section 3.01.

Section 1.03 Repayment. The Company may not repay any portion of the outstanding Principal Amount (or any interest accrued thereon) prior to the Maturity Date, and then only to the extent that a Conversion Notice has not been delivered to the Company in respect of the then whole Principal Amount (and any interest accrued thereon) pursuant to Section 3.01.

Section 1.04 Transfer. This Note may be transferred or sold, in whole or in part, subject to the provisions of Section 5.08 of this Note, or pledged, hypothecated or otherwise granted as security by the Investor, in each case, in accordance with the provisions of the Purchase Agreement.

Section 1.05 Replacement. Upon receipt of a duly executed written statement from the Investor with respect to the loss, theft or destruction of this Note (or any replacement hereof), or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

Section 1.06 Use of Proceeds. The Company shall use the proceeds of this Note as set forth in the Purchase Agreement.

Section 1.07 Tax Treatment. All payments made by the Company in connection with this Note, whether paid in cash or in kind, shall be made free from and clear of any tax, withholding, duties, levies, value added tax, or any other taxes. If a withholding of any tax is required to be made with respect to any payment made to the Investor (whether made in cash or in kind), the Company shall increase such payment to the Investor, so that the net payment after withholding (whether made in cash or in kind) to the Investor shall be equal to the amount that would have been paid to the Investor had no withholding been imposed. If the Company withheld any tax in connection with any payment made to the Investor, then immediately following the remittance of the required withholding tax to the appropriate tax authority, the Company shall provide the Investor with official document(s) from the appropriate taxing authority indicating payment for such withholding tax.

ARTICLE II

Section 2.01 Events of Default. An “Event of Default” under this Note shall mean the occurrence of any of the events of default defined in the Purchase Agreement, and any of the additional events described below (unless the Event of Default is waived in writing by the Investor):

(a) Following a three (3) Business Day opportunity to cure, any default in the payment of (i) the Principal Amount or the interest hereunder when due; or (ii) liquidated damages or any other amount in respect of this Note as and when the same shall become due and payable (whether on the Maturity Date or by acceleration or otherwise);

(b) the Company shall fail to observe or perform (i) any of its other covenants or agreements contained in this Note, (ii) any of its covenants or agreements contained in the Warrant, or (iii) any of its covenants or agreements set forth in Sections 6, 7, 8, 9, 10 or 11 of the Purchase Agreement;

(c) the Company’s notice to the Investor, including by way of public announcement, at any time, of its inability to comply (including for any of the reasons described in Section 3.06 hereof) or its intention not to comply with proper requests for conversion of this Note into Ordinary Shares;

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(d) the Company shall fail to (i) timely deliver the Ordinary Shares as and when required in Section 3.02; or (ii) make the payment of any liquidated damages under any Transaction Document;

(e) at any time the Company shall fail to have the Required Minimum of Ordinary Shares authorized, reserved and available for issuance to satisfy the potential conversion in full (disregarding for this purpose any and all limitations of any kind on such conversion) of this Note or upon exercise of the Warrants;

(f) any representation or warranty made by the Company or any of its Subsidiaries in any Transaction Document shall prove to have been false or incorrect or breached in a material respect on the date as of which made;

(g) the Company or any of its Subsidiaries shall (A) default in any payment of any amount or amounts of principal or interest (if any) on any Indebtedness (other than the Indebtedness hereunder) or (B) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders or beneficiary or beneficiaries of such Indebtedness to cause with the giving of notice if required, such Indebtedness to become due prior to its stated maturity;

(h) the Company or any of its Subsidiaries shall: (i) apply for consent to the appointment of, or taking of possession by, a receiver, custodian, trustee or liquidator or similar officer (temporary or permanent) of itself or of all or a substantial part of its property or assets; (ii) make a general assignment for the benefits of its creditors; (iii) commence a voluntary case under the U.S. Bankruptcy Code, Title 11 of the United States Code, as amended (the “Bankruptcy Code”) or under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally, or apply for the granting of a stay of proceedings order (hakpaat halichim) under the Israeli Companies Law, 5759-1999 or under the Israeli Insolvency and Economic Rehabilitation Law, 5778-2018; (v) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or domestic); (vi) issue a notice of bankruptcy or winding up of its operations or issue a press release regarding same or otherwise admit in writing in a public report or release or bondholder report it generally is not paying its debts as they become due; or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing;

(i) a proceeding or case shall be commenced in respect of the Company or any of its Subsidiaries, without its application or consent, in any court of competent jurisdiction, seeking: (i) the liquidation, reorganization, moratorium, dissolution, a stay of proceedings order, winding up, or composition or readjustment of its debts; (ii) the appointment of a trustee, receiver, custodian, liquidator or similar officer (temporary or permanent) of it or of all or any substantial part of its assets in connection with the liquidation or dissolution of the Company or any of its Subsidiaries; or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of forty-five (45) days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code (as now or hereafter in effect) or under the Israeli Companies Law, 5759-1999 or under the Israeli Insolvency and Economic Rehabilitation Law, 5778-2018, or under the comparable laws of any jurisdiction (foreign or domestic) against the Company or any of its Subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company or any of its Subsidiaries and shall continue undismissed, or unstayed and in effect for a period of forty-five (45) days;

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(j) one or more final judgments or orders for the payment of money aggregating in excess of USD 1,000,000 (or its equivalent in the relevant currency of payment) are rendered against one or more of the Company and its Subsidiaries;

(k) the failure of the Company to instruct its transfer agent to remove any legends from the Ordinary Shares and issue such unlegended certificates to the Investor within five (5) Trading Days of the Investor’s lawful request;

(l) the Ordinary Shares are no longer publicly traded or cease to be listed on the Trading Market ;

(m) the Company consummates a “going private” transaction and as a result the Ordinary Shares are no longer registered under Sections 12(b) or 12(g) of the 1934 Act;

(n) there shall be any SEC or judicial stop trade order or trading suspension stop-order or any restriction in place with the transfer agent for the Ordinary Shares restricting the trading of such Ordinary Shares;

(o) the failure by the Company or any of its Subsidiaries to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether currently or in the future);

(p) the Depository Trust Company places any restrictions on transactions in the Ordinary Shares or the Ordinary Shares are no longer tradeable through the Depository Trust Company Fast Automated Securities Transfer program which, in either such case, is not due to any fault or liability, in any material respect, on the part of the Company or any of its Subsidiaries; or

(q) the occurrence of a Material Adverse Effect in respect of the Company, or the Company and its Subsidiaries taken as a whole which would reasonably be considered to substantially impair the ability of the Company to satisfy its obligations under the Transaction Documents.

Section 2.02 Remedies Upon an Event of Default.

(a) Upon the occurrence of any Event of Default, the Company shall, as promptly as possible but in any event within three (3) Business Days of the occurrence of such Event of Default, notify the Investor in writing of the occurrence of such Event of Default, describing the event or factual situation giving rise to the Event of Default and specifying the relevant subsection or subsections of Section 2.01 under which such Event of Default has occurred.

(b) Upon the occurrence of any Event of Default that has not been remedied within (i) three (3) Business Days for an Event of Default occurring by the Company’s failure to comply with Section 3.02 of this Note, or (ii) ten (10) Business Days for all other Events of Default; provided, however, that there shall be no cure period for an Event of Default described in Section 2.01(h) or Section 2.01(i), this Note shall become immediately due and payable and the Company shall pay to the Investor, in full satisfaction of its obligations hereunder, the Mandatory Default Amount (as liquidated damages), all without demand, presentment, protest or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Company, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Investor shall be entitled to exercise all other rights and remedies available at law or in equity or under the Transaction Documents.

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ARTICLE III

Section 3.01 Conversion.

(a) Conversion at Election of the Investor. This Note shall be convertible (in whole or in part), at the option of the Investor at any time and from time to time during each Conversion Notice Period, into such number of fully paid and nonassessable Ordinary Shares as is determined by dividing (x) that portion of the outstanding Principal Amount, accrued and unpaid interest, liquidated damages and any other amount due hereunder that the Investor elects to convert by (y) the Conversion Price then in effect by delivering a notice of conversion, in substantially the form attached hereto as Exhibit A (each a “Conversion Notice”) to the Company, with such conversion taking effect on the date of such delivery or any later date specified in the Conversion Notice (provided that such date is no later than the Maturity Date). The Investor shall deliver this Note to the Company at the address designated in the Purchase Agreement at such time that this Note is fully converted. With respect to partial conversions of this Note, the Company shall keep written records of the amount of this Note converted as of the date of such conversion (each, a “Conversion Date”). For the avoidance of doubt, the Investor may deliver a Conversion Notice on one or more occasions in accordance with the foregoing provisions, for so long as there is any Principal Amount (and/or interest accrued thereon, liquidated damages and/or any other amount due hereunder) outstanding. The Investor shall have the right to withdraw and void any Conversion Notice prior to such date as the applicable Conversion Shares are delivered to the Investor.

(b) Conversion Price. The “Conversion Price” means $5.09, subject to adjustment as provided herein.

Section 3.02 Delivery of Conversion Shares. As soon as practicable after any conversion of any amount due hereunder in the form of Ordinary Shares in accordance with this Note, and in any event within two (2) Trading Days thereafter the Company shall, at its expense, cause to be issued in the name of and delivered to the Investor, or as the Investor may direct, a certificate or certificates evidencing the number of fully paid and nonassessable Ordinary Shares to which the Investor shall be entitled on such conversion or payment (the “Conversion Shares”), in the applicable denominations based on the applicable conversion or payment, which, to the extent legally permissible, such certificate or certificates shall be free of restrictive and trading legends (except for any such legends as may be required under the Securities Act). In lieu of delivering physical certificates for the Ordinary Shares issuable upon any conversion of this Note, provided the Company’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program or a similar program, upon request of the Investor, the Company shall cause its transfer agent to electronically transmit such Ordinary Shares issuable upon conversion of this Note to the Investor (or its designee), by crediting the account of the Investor’s (or such designee’s) broker with DTC (provided that the same time periods herein as for stock certificates shall apply) as instructed by the Investor (or its designee).

Section 3.03 Investor’s Conversion Limitations. Notwithstanding anything to the contrary contained herein, the Investor shall not be entitled to receive shares representing Equity Interests upon conversion of this Note to the extent (but only to the extent) that such exercise or receipt would cause the Investor (together with its Affiliates, and any Persons acting as a group together with the Investor or any of its Affiliates) to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder) of a number of Equity Interests of a class that is registered under the 1934 Act which exceeds the Maximum Percentage (as defined below) of the Equity Interests of such class that are outstanding at such time. Any purported delivery of Equity Interests in connection with the conversion of this Note prior to the termination of this restriction in accordance herewith shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the Investor (together with its Affiliates, and any Persons acting as a group together with the Investor or any of its Affiliates) becoming the beneficial owner of more than the Maximum Percentage of the Equity Interests of a class that is registered under the 1934 Act that is outstanding at such time. If any delivery of Equity Interests owed to the Investor following conversion of this Note is not made, in whole or in part, as a result of this limitation, the Company’s obligation to make such delivery shall not be extinguished and the Company shall deliver such Equity Interests as promptly as practicable after the Investor gives notice to the Company that such delivery would not result in such limitation being triggered or upon termination of the restriction in accordance with the terms hereof. To the extent limitations contained in this Section 3.03 apply, the determination of whether this Note is convertible and of which portion of this Note is convertible shall be the sole responsibility and in the sole determination of the Investor, and the submission of a Conversion Notice shall be deemed to constitute the Investor’s determination that the issuance of the full number of Conversion Shares requested in the Conversion Notice is permitted hereunder, and the Company shall not have any obligation to verify or confirm the accuracy of such determination. For purposes of this Section 3.03, (i) the term “Maximum Percentage” shall mean 19.99% of the Equity Interests of a class that is registered under the 1934 Act that is outstanding at such time. In determining the number of Equity Interests of a particular class outstanding at any point in time, the Investor may rely on the number of outstanding Equity Interests of such class as reflected in (x) the Company’s most recent Form 20-F or Form 6-K filed with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) a more recent notice by the Company or its transfer agent to the Investor setting forth the number of Equity Interests of such class then outstanding. For any reason at any time, upon written or oral request of the Investor, the Company shall, within one (1) Business Day of such request, confirm orally and in writing to the Investor the number of Equity Interests of any class then outstanding. The provisions of this Section 3.03 shall be construed, corrected and implemented in a manner so as to effectuate the intended beneficial ownership limitation herein contained.

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Section 3.04 Adjustment of Conversion Price.

(a) Until the Note has been paid in full or converted in full, the Conversion Price shall be subject to adjustment from time to time as follows (but shall not be increased, other than pursuant to Section 3.04(a)(i) hereof):

(i) Adjustments for Stock Splits and Combinations. If the Company shall at any time or from time to time after the Closing (but whether before or after the Issue Date) effect a split or other subdivision of the outstanding Ordinary Shares, the applicable Conversion Price in effect immediately prior to the stock split shall be proportionately decreased. If the Company shall at any time or from time to time after the Closing (but whether before or after the Issue Date), combine the outstanding Ordinary Shares, the applicable Conversion Price in effect immediately prior to the combination shall be proportionately increased. Any adjustments under this Section 3.04(a)(i) shall be effective at the close of business on the date the stock split or combination occurs.

(ii) Adjustments for Certain Dividends and Distributions. If the Company shall at any time or from time to time after the Closing (but whether before or after the Issue Date) make or issue or set a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in Ordinary Shares, then, and in each event, the applicable Conversion Price in effect immediately prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of the close of business on such record date, by multiplying the applicable Conversion Price then in effect by a fraction:

(A) the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date; and

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(B) the denominator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution.

(iii) Adjustment for Other Dividends and Distributions. If the Company shall at any time or from time to time after the Closing (but whether before or after the Issue Date) make or issue or set a record date for the determination of holders of Ordinary Shares entitled to receive a dividend or other distribution payable in securities other than Ordinary Shares, then, and in each event, an appropriate revision to the applicable Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the Investor shall receive upon conversions of its Note (whether in whole or in part) pursuant to the operation of this Article III, in addition to the number of Ordinary Shares receivable thereon, the number of securities of the Company or cash or other property that it would have received had this Note been converted into Ordinary Shares in full (without regard to any conversion limitations herein) on the date of such event and had thereafter, during the period from the date of such event to and including the Conversion Date, retained such securities (together with any distributions payable thereon during such period) or assets, giving application to all adjustments called for during such period under this Section 3.04(a)(iii) with respect to the rights of the holders of this Note; provided, however, that if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends or distributions.

(iv) Adjustments for Reclassification, Exchange or Substitution. If the Ordinary Shares at any time or from time to time after the Closing (but whether before or after the Issue Date) shall be changed to the same or different number of shares or other securities of any class or classes of stock or other property, whether by reclassification, exchange, substitution or otherwise (other than by way of a stock split or combination of shares or stock dividends provided for in Section 3.04(a)(i), (ii) and (iii) hereof, or a reorganization, merger, consolidation, or sale of assets provided for in Section 3.04(a)(vi) hereof), then, and in each event, an appropriate revision to the Conversion Price shall be made and provisions shall be made (by adjustments of the Conversion Price or otherwise) so that the Investor shall have the right thereafter to convert this Note into the kind and amount of shares of stock or other securities or other property receivable upon reclassification, exchange, substitution or other change, by holders of the number of Ordinary Shares into which such Note might have been converted immediately prior to such reclassification, exchange, substitution or other change, all subject to further adjustment as provided herein.

(v) Adjustment Due to Dilutive Issuance. If, at any time when the Note is issued and outstanding, the Company issues or sells, or in accordance with this Section 3.04(a)(v) hereof is deemed to have issued or sold, any Ordinary Shares (other than pursuant to an Excluded Issuance) for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance) of such Ordinary Shares (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Company in such Dilutive Issuance.

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The Company shall be deemed to have issued or sold Ordinary Shares if the Company in any manner issues or grants, or has issued or granted, any warrants, rights or options, whether or not immediately exercisable, to subscribe for or to purchase Ordinary Shares or other securities convertible into or exercisable or exchangeable for, directly or indirectly, Ordinary Shares (“Convertible Securities”) (such warrants, rights and options to Ordinary Shares or Convertible Securities are hereinafter referred to as “Options”) and (x) the price per share for which such Ordinary Shares are issuable upon the exercise of such Options is less than the Conversion Price then in effect or (y) the price per share for which Ordinary Shares are issuable upon the exercise of such Options is amended or adjusted, pursuant to the terms of such Options or otherwise, and such price as so amended or adjusted is less than the Conversion Price then in effect at the time of such amendment or adjustment, then, in each such case (x) or (y), the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the “price per share for which such Ordinary Shares are issuable upon the exercise of such Options” is determined by dividing (i) the total amount, if any, received or receivable by the Company as consideration for the issuance or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of Ordinary Shares issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance of such Ordinary Shares upon the exercise of such Options or upon the conversion, exercise or exchange of Convertible Securities issuable upon exercise of such Options. The foregoing provisions of this paragraph shall have no applicability in the event of an Excluded Issuance.

(vi) Consideration for Capital Stock. In case any Capital Stock or any Capital Stock Equivalents shall be issued or sold:

(A) in connection with any merger or consolidation in which the Company is the surviving corporation (other than any consolidation or merger in which the previously outstanding Ordinary Shares of the Company shall be changed to or exchanged for the stock or other securities of another corporation), the amount of consideration therefor shall be, deemed to be the fair value, as determined reasonably and in good faith by the Board of Directors and approved by the Investor, of such portion of the assets and business of the non-surviving corporation as such Board of Directors may determine to be attributable to such Ordinary Shares or Options, as the case may be; or

(B) in the event of any consolidation or merger of the Company in which the Company is not the surviving corporation or in which the previously outstanding Ordinary Shares of the Company shall be changed into or exchanged for the stock or other securities of another corporation or other property, or in the event of any sale of all or substantially all of the assets of the Company for stock or other securities or other property of any corporation, the Company shall be deemed to have issued Ordinary Shares, at a price per share equal to the valuation of the Company’s Ordinary Shares based on the actual exchange ratio on which the transaction was predicated, as applicable, and the fair market value on the date of such transaction of all such stock or securities or other property of the other corporation. If any such calculation results in adjustment of the applicable Conversion Price, or the number of Ordinary Shares issuable upon conversion of the Note, the determination of the applicable Conversion Price or the number of Ordinary Shares issuable upon conversion of the Note immediately prior to such merger, consolidation or sale, shall be made after giving effect to such adjustment of the number of Ordinary Shares issuable upon conversion of the Note. In the event Ordinary Shares are issued with other shares or securities or other assets of the Company for consideration which covers both, the consideration computed as provided in this Section 3.04(a)(vi) shall be allocated among such securities and assets as determined in good faith by the Board of Directors y, and approved by the Investor.

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(vii) Record Date. In case the Company shall take record of the holders of its Ordinary Shares for the purpose of entitling them to subscribe for or purchase Ordinary Shares or Convertible Securities, then the date of the issue or sale of the Ordinary Shares shall be deemed to be such record date.

(b) No Impairment. The Company shall not, by amendment of its Amended and Restated Articles or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Section 3.04 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Investor against impairment. In the event the Investor shall elect to convert this Note as provided herein, the Company cannot refuse conversion based on any claim that the Investor or anyone associated or affiliated with the Investor has been engaged in any violation of law, violation of an agreement to which the Investor is a party or for any reason whatsoever, unless, an injunction from a court, or notice, restraining and or adjoining conversion of this Note shall have issued.

(c) Certificates as to Adjustments. Upon occurrence of each adjustment or readjustment of the Conversion Price or number of Ordinary Shares issuable upon conversion of this Note pursuant to this Section 3.04, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Investor a certificate setting forth such adjustment and readjustment, showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon written request of the Investor, at any time, furnish or cause to be furnished to the Investor a like certificate setting forth such adjustments and readjustments, the applicable Conversion Price in effect at the time, and the number of Ordinary Shares and the amount, if any, of other securities or property which at the time would be received upon the conversion of this Note.

(d) Issue Taxes. The Company shall pay any and all issue and other taxes, including any withholding tax, duties, levies, value added tax, or any other taxes, that may be payable in respect of any issue or delivery of Ordinary Shares on conversion of this Note pursuant thereto without decreasing the number of Ordinary Shares issued to the Investor; provided, however, that the Company shall not be obligated to pay any U.S. federal, state or local income taxes and transfer taxes resulting from any transfer requested by the Investor in connection with any such conversion.

(e) Fractional Shares. No fractional Ordinary Shares shall be issued upon conversion of this Note. In lieu of any fractional shares to which the Investor would otherwise be entitled, the Company shall pay cash equal such fractional shares multiplied by the Conversion Price then in effect.

(f) Reservation of Ordinary Shares. The Company shall at all times while this Note shall be outstanding, reserve and keep available out of its authorized but unissued Ordinary Shares, the Required Minimum of Ordinary Shares (disregarding for this purpose any and all limitations of any kind on such conversion). The Company shall, from time to time, increase the authorized number of Ordinary Shares or take other effective action if at any time the unissued number of authorized shares shall not be sufficient to satisfy the Investor’s obligations under this Section 3.04(f)

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(g) Regulatory Compliance. If any Ordinary Shares to be reserved for the purpose of conversion of this Note require registration or listing with or approval of any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise before such shares may be validly issued or delivered upon conversion, the Company shall, at its sole cost and expense, in good faith and as expeditiously as possible, secure such registration, listing or approval, as the case may be.

(h) Effect of Events Prior to the Issue Date. If the Issue Date of this Note is after the Closing Date, then, if the Conversion Price or any other right of the Investor of this Note would have been adjusted or modified by operation of any provision of this Note had this Note been issued on the Closing Date, such adjustment or modification shall be deemed to apply to this Note as of the Issue Date as if this Note had been issued on the Closing Date.

(i) No Rights as Shareholder. Nothing contained in this Note shall be construed as conferring upon the Investor, prior to the conversion of this Note, the right to vote or to consent or to receive notice as a shareholder of the Company in respect of any meeting of shareholders for the election of directors of the Company or of any other matter.

Section 3.05 Prepayment or Conversion upon a Change of Control.

(a) Mechanics of Prepayment at Option of the Investor in Connection with a Change of Control. No later than the date of occurrence of a Change of Control, or, if earlier, entry by the Company into an agreement pursuant to which a Change of Control will or may be effected, but in no event prior to the public announcement of such Change of Control, the Company shall deliver written notice including reasonably-detailed particulars of such agreement (“Notice of Change of Control”) to the Investor. Within fifteen (15) days after receipt of a Notice of Change of Control, the Investor at its sole discretion may elect to either (i) require the Company to prepay effective immediately prior to the consummation of such Change of Control (or with immediate effect, if such Change of Control has already been effected), an amount equal to the then outstanding Principal Amount (together with all accrued and unpaid interest, liquidated damages and any other amounts which may become due hereunder as at the date of such election) (the “COC Repayment Price”) by delivering written notice thereof (“Notice of Prepayment”) to the Company; or (ii) deliver a Conversion Notice to the Company in accordance with Section 3.01 herein in respect of the full amount of the then outstanding Principal Amount (together with all accrued and unpaid interest, liquidated damages and/or any other amounts which may become due hereunder as at the date of such election). If the Investor fails to make one of the aforementioned elections within the specified period, the Investor shall be deemed to have elected the option specified in clause (i) above of the immediately preceding sentence.

(b) Payment of COC Repayment Price. Upon the Company’s receipt of a Notice of Prepayment from the Investor, the Company shall deliver the COC Repayment Price to the Investor immediately prior to the consummation of the Change of Control (or immediately, if such Change of Control has already been effected).

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Section 3.06 Inability to Fully Convert.

(a) Investor’s Option if Company Cannot Fully Convert. If, upon the Company’s receipt of a Conversion Notice or as otherwise required under this Note, including with respect to repayment of any Principal Amount (together with all accrued and unpaid interest, liquidated damages and any other amounts which may become due hereunder) in Ordinary Shares as permitted under this Note, the Company cannot issue Ordinary Shares for any reason, including, without limitation, because the Company (x) does not have a sufficient number of Ordinary Shares authorized and available, (y) is otherwise prohibited by applicable law or by the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over the Company or any of its securities from issuing all of the Ordinary Shares which are to be issued to the Investor pursuant to this Note or (z) due to the conversion limitations as provided in this Note, then the Company shall issue as many Ordinary Shares as it is able to issue and, with respect to the unconverted portion of this Note or with respect to any Ordinary Shares not timely issued in accordance with this Note, the Investor, solely at the Investor’s option, can elect to:

(i) void its Conversion Notice and retain this Note that was to be converted pursuant to the Conversion Notice (provided that the Investor’s voiding its Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice); or

(ii) defer issuance of the applicable Conversion Shares until such time as the Company can legally issue such shares; provided that the Principal Amount (together with any accrued and unpaid interest, liquidated damages and/or any other amounts) underlying such Conversion Shares shall remain outstanding until the delivery of such Conversion Shares and interest shall continue to accrue on such Principal Amount until the applicable Conversion Shares are legally issued by the Company hereunder; and provided, further, that if the Investor elects to defer the issuance of the applicable Conversion Shares, it may exercise its rights under Section 3.06(a)(i) above at any time prior to the issuance of the applicable Conversion Shares upon two (2) Business Days’ notice to the Company.

(b) Mechanics of Fulfilling Investor’s Election. The Company shall immediately send to the Investor, upon receipt of a Conversion Notice from the Investor, which cannot be fully satisfied as described in Section 3.06(a) above, a notice of the Company’s inability to fully satisfy the Conversion Notice (the “Inability to Fully Convert Notice”). Such Inability to Fully Convert Notice shall indicate (i) the reason why the Company is unable to fully satisfy the Investor’s Conversion Notice; and (ii) the amount of this Note which cannot be converted. The Investor shall notify the Company of its election pursuant to Section 3.06(a) above by delivering written notice to the Company.

ARTICLE IV

Section 4.01 Covenants. For so long as any Note remains unpaid and outstanding, the Company covenants to the Investor that:

(a) Payment of the Note. The Company shall pay or cause to be paid the Principal Amount and any interest on the Note on the date and in the manner provided herein.

(b) Compliance with Transaction Documents. The Company shall, and shall cause its Subsidiaries to, comply with each of its obligations under this Note and the other Transaction Documents.

(c) No Repurchase of Equity Interests. The Company shall not repurchase any Equity Interests issued and outstanding to the extent that such action would cause the Investor (together with its Affiliates, and any Persons acting as a group together with the Investor or any of its Affiliates) to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder) of a number of such Equity Interests which exceeds the Maximum Percentage.

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ARTICLE V

Section 5.01 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section 5.01 prior to 5:00 p.m. (New York time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section 5.01 on a day that is not a Business Day or later than 5:00 p.m. (New York time) on any date and earlier than 11:59 p.m. (New York time) on such date, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The addresses for notice shall be as set forth in the Purchase Agreement.

Section 5.02 Governing Law. This Note shall be governed by and construed in accordance with the Laws of the State of New York (including section 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Laws and Rules 327(b)), without reference to principles of conflict of laws or choice of laws. This Note shall not be interpreted or construed with any presumption against the party causing this Note to be drafted.

Section 5.03 Headings. Article and section headings in this Note are included herein for purposes of convenience of reference only and shall not constitute a part of this Note for any other purpose.

Section 5.04 Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit the Investor’s right to pursue actual damages for any failure by the Company to comply with the terms of this Note. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the holder thereof and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Investor and that the remedy at law for any such breach would be inadequate. Therefore, the Company agrees that, in the event of any such breach or threatened breach, the Investor shall be entitled, in addition to all other available rights and remedies, at law or in equity, to equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required.

Section 5.05 Enforcement Expenses. The Company agrees to pay all costs and expenses of enforcement of this Note, including the Investor’s counsels, receiver and experts’ fees and expenses.

Section 5.06 Binding Effect. The obligations of the Company and the Investor set forth herein shall be binding upon the successors and assigns of each such party, whether or not such successors or assigns are permitted by the terms herein.

Section 5.07 Amendments; Waivers. No provision of this Note may be waived or amended except in a written instrument signed by the Company and the Investor. No waiver of any default with respect to any provision, condition or requirement of this Note shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

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Section 5.08 Compliance with Securities Laws. The Investor of this Note acknowledges that this Note is being acquired solely for the Investor’s own account and not as a nominee for any other party, and for investment, and that the Investor shall not offer, sell or otherwise dispose of this Note in violation of securities laws. This Note and any Note issued in substitution or replacement therefor shall be stamped or imprinted with a legend in substantially the following form:

“THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT.”

Section 5.09 Jurisdiction; Venue. Any action, proceeding or claim arising out of, or relating in any way to this Note shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York. The Company and the Investor irrevocably submit to the jurisdiction of such courts, which jurisdiction shall be exclusive, and hereby waive any objection to such exclusive jurisdiction or that such courts represent an inconvenient forum. The prevailing party in any such action shall be entitled to recover its reasonable and documented attorneys’ fees and out-of-pocket expenses relating to such action or proceeding.

Section 5.10 Failure or Indulgence Not Waiver. No failure or delay on the part of the Investor in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.

Section 5.11 Waivers.

(a) Except as otherwise specifically provided herein, the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands’ and notices in connection with the delivery, acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Company liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.

(b) No delay or omission on the part of the Investor in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such rights or any other right of the Investor, nor shall any waiver by the Investor of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion.

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(c) THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE INVESTOR OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

Section 5.12 Definitions. Capitalized terms used herein and not defined shall have the meanings set forth in the Purchase Agreement. For the purposes hereof, the following terms shall have the following meanings:

(a) “Conversion Notice Period” means each period of 30 days in duration commencing on each of dates falling: (i) 12 months; (ii) 18 months; (iii) 24 months; (iv) 36 months; (v) 48 months; (vi) 54 months; and (vii) 59 months, after the Issue Date;

(b) “Excluded Issuance” means any issue or sale of Excluded Shares by the Company;

(c) “Indebtedness” means, with respect to any Person, without duplication: (a) the principle of any indebtedness of such Person, whether or not contingent, (i) in respect of borrowed money, (ii) evidenced by bonds, notes, debentures or similar instruments or letters of credit or bankers’ acceptances, (or, without duplication, reimbursement agreements in respect thereof), (iii) representing the deferred and unpaid purchase price of any property, (iv) in respect of capitalized lease obligations or (v) representing any swap contracts, in each case, if and to the extent that any of the foregoing indebtedness (other than letters of credit and swap contracts) would appear as a liability on a balance sheet (excluding the footnotes thereto) of such Person prepared in accordance with GAAP; (b) any guarantee by such Person of the Indebtedness of another Person; and (c) Indebtedness of another Person secured by a lien on any asset owned by such a Person (whether or not such Indebtedness is assumed by such Person); and

(d) “Mandatory Default Amount” means an amount equal to one hundred thirty percent (130%) of the outstanding Principal Amount plus the accrued interest thereof on the date on which the first Event of Default has occurred hereunder.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by its duly authorized officer as of the date first above indicated.

COMPANY:
REE AUTOMOTIVE LTD.
By:
	Name:	[Daniel Barel]
	Title:	[Chief Executive Officer]

[Signature Page to Convertible Promissory Note]

Exhibit A

Conversion Notice

The undersigned hereby irrevocably elects to convert USD ________________ of the principal amount and accrued interest of the above Note No. ___ [(together with USD___________ of [liquidated damages][describe other amount] due thereunder)] into Ordinary Shares of REE Automotive Ltd. (the “Company”) according to the conditions hereof, as of the date written below.

Date of Conversion:

Conversion Price:

Number of Ordinary Shares beneficially owned or deemed beneficially owned by the Investor on the Conversion Date:

INVESTOR:
[●]
By:
	Name:	[●]
	Title:	[●]

EX-99.3

Exhibit 99.3

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

FORM OF ORDINARY SHARE PURCHASE WARRANT
REE AUTOMOTIVE LTD.

Warrant Shares: [●] Original Issuance Date: [●]

THIS ORDINARY SHARE PURCHASE WARRANT (the “Warrant”) certifies that [●] and whose registered office is [●] (together with its successors and permitted assigns, the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the Original Issuance Date set forth above and on or prior to 5:00 p.m. (New York City time) on [●]¹ (the “Termination Date”) but not thereafter, to subscribe for and purchase from REE Automotive Ltd., a company organized under the Laws of Israel (the “Company”), up to [●]² Ordinary Shares (as subject to adjustment hereunder, the “Warrant Shares”) at a purchase price per share of US$4.42 per share (subject to adjustment as provided herein, the “Exercise Price”).

ARTICLE I

Section 1.01 Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated November 27, 2023, by and between the Company and the Holder. For the purposes hereof, the following terms shall have the following meanings:

(a) “Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 2.01, multiplied by (b) the Exercise Price in effect as of the Exercise Date in accordance with the terms of this Warrant;

(b) “Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 2.01 shall have been satisfied at or prior to 5:00 p.m., New York time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Agreement, this Warrant (if applicable) and the Aggregate Exercise Price;

1	Note to draft: to be five (5) years from the Original Issuance Date.
2	Note to draft: equal to [*] Ordinary Shares (calculated as of Closing (assuming full ($[*]) conversion of the Note at a Conversion Price of $5.09 per share)

(c) “Fair Market Value” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Ordinary Shares for such day on all U.S. domestic securities exchanges on which the Ordinary Shares may at the time be listed; (b) if there have been no sales of the Ordinary Shares on any such exchange on any such day, the average of the highest bid and lowest asked prices for the Ordinary Shares on all such exchanges at the end of such day; (c) if on any such day the Ordinary Shares is not listed on a U.S. domestic securities exchange, the closing sales price of the Ordinary Shares as quoted on Nasdaq, the OTC Bulletin Board or similar quotation system or association for such day; or (d) if there have been no sales of the Ordinary Shares on Nasdaq, the OTC Bulletin Board or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Ordinary Shares quoted on Nasdaq, the OTC Bulletin Board or similar quotation system or association at the end of such day; in each case, averaged over the ten (10) then most recent Trading Days ending on the Trading Day immediately prior to the day as of which “Fair Market Value” is being determined. If at any time the Ordinary Shares is not listed on any U.S. domestic securities exchange or quoted on Nasdaq, the OTC Bulletin Board or similar quotation system or association, the “Fair Market Value” of the Ordinary Shares shall be the fair market value per share as determined in good faith by the Holder. Notwithstanding the foregoing, if this Warrant is being exercised in connection with a public offering of the Ordinary Shares, the “Fair Market Value” of the Ordinary Shares shall be the per-share offering price to the public of one share of Ordinary Shares; and

(d) “OTC Bulletin Board” means the National Association of Securities Dealers, Inc. OTC Bulletin Board.

ARTICLE II

Section 2.01 Exercise.

(a) Exercise of Warrant. Exercise of the rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Original Issuance Date and on or before the Termination Date by (i) delivery to the Company of a duly executed facsimile copy (or e-mail attachment) of the Exercise Agreement in the form attached as Exhibit A hereto (each, an “Exercise Agreement”), specifying the number of Warrant Shares to be purchased, and (ii) payment to the Company of the Aggregate Exercise Price in accordance with Section 2.01(b)(i). No ink-original Exercise Agreement shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Exercise Agreement be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant certificate to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Exercise Agreement is delivered to the Company. Partial exercises of this Warrant resulting in receipt of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares for which this Warrant is exercisable in an amount equal to the applicable number of Warrant Shares. The Holder and the Company shall maintain records showing the number of Warrant Shares for which this Warrant is exercisable and the date of such exercise. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the exercise of a portion of the Warrant hereunder, the number of Warrant Shares for which this Warrant is exercisable hereunder at any given time may be less than the amount stated on the face hereof.

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Notwithstanding anything contained herein to the contrary, on the Trading Day prior to the Termination Date, this Warrant shall be automatically exercised subject to the provisions of Section 2.01(c).

(b) Mechanics of Exercise.

(i) Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed in the Exercise Agreement, by the following methods:

(A) by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price;

(B) by instructing the Company to withhold a number of Warrant Shares then issuable upon exercise of this Warrant with an aggregate Fair Market Value as of the Exercise Date equal to such Aggregate Exercise Price;

(C) by surrendering to the Company (x) Warrant Shares previously acquired by the Holder with an aggregate Fair Market Value as of the Exercise Date equal to such Aggregate Exercise Price and/or (y) other Ordinary Shares having a Fair Market Value as of the Exercise Date equal to the Aggregate Exercise Price; or

(D) any combination of the foregoing.

In the event of any withholding of Warrant Shares or surrender of other Ordinary Shares pursuant to Sections (B), (C) or (D) above where the number of shares whose value is equal to the Aggregate Exercise Price is not a whole number, the number of shares withheld by or surrendered to the Company shall be rounded up to the nearest whole share and the Company shall within two (2) Trading Days make a cash payment to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on the incremental fraction of a share being so withheld by or surrendered to the Company in an amount equal to the product of (x) such incremental fraction of a share being so withheld or surrendered multiplied by (y) the Fair Market Value per Warrant Share as of the Exercise Date.

(ii) Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Company’s share transfer agent (the “Transfer Agent”) to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its deposit or withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system, and otherwise by electronic delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Exercise Agreement by the date that is three (3) Trading Days after the delivery to the Company of the Exercise Agreement, provided that, to the extent that it falls within the scope of Section 2.01(b)(i)(A), the Aggregate Exercise Price has been received by the Company (such date, the “Warrant Share Delivery Date”). Upon delivery of the Exercise Agreement and this Warrant (if applicable) and payment of the Aggregate Exercise Price in accordance with Section 2.01(b)(i), the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares. The Company agrees to use commercially reasonable efforts to maintain a transfer agent that is a participant in the Fast Automated Securities Transfer Program (FAST) with The Depository Trust Company so long as this Warrant remains outstanding and exercisable.

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(iii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of the Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder exercisable for the remaining Warrant Shares, which new Warrant shall in all other respects be identical with this Warrant.

(iv) Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2.01(b)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

(v) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining whether the exercise would result in the issuance of any fractional share.

(vi) Charges, Taxes and Expenses. Issuance of the Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which transfer taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached as Exhibit B hereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Exercise Agreement and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares. The Company shall pay any and all issue and other taxes, including any withholding tax, duties, levies, value added tax, or any other taxes, that may be payable in respect of any issue or delivery of this Warrant and/or the Warrant Shares upon exercise of this Warrant, without decreasing the number of Warrant Shares issued to the Holder.

(vii) Closing of Books. The Company shall not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

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(c) Holder’s Exercise Limitations. Notwithstanding anything to the contrary contained herein, the Holder shall not be entitled to receive shares representing Equity Interests upon any exercise of this Warrant to the extent (but only to the extent) that such exercise or receipt would cause the Holder (together with its Affiliates, and any Persons acting as a group together with the Holder or any of its Affiliates) to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder) of a number of Equity Interests of a class that is registered under the 1934 Act which exceeds the Maximum Percentage (as defined below) of the Equity Interests of such class that are outstanding at such time. Any purported delivery of Equity Interests in connection with any exercise of this Warrant prior to the termination of this restriction in accordance herewith shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the Holder (together with its Affiliates, and any Persons acting as a group together with the Holder or any of its Affiliates) becoming the beneficial owner of more than the Maximum Percentage of the Equity Interests of a class that is registered under the 1934 Act that is outstanding at such time. If any delivery of Equity Interests owed to the Holder following any exercise of this Warrant is not made, in whole or in part, as a result of this limitation, the Company’s obligation to make such delivery shall not be extinguished and the Company shall deliver such Equity Interests as promptly as practicable after the Holder gives notice to the Company that such delivery would not result in such limitation being triggered or upon termination of the restriction in accordance with the terms hereof. To the extent limitations contained in this Section 2.01(c) apply, the determination of whether this Warrant is exercisable and of which portion of this Warrant is exercisable shall be the sole responsibility and in the sole determination of the Holder, and the submission of an Exercise Agreement shall be deemed to constitute the Holder’s determination that the issuance of the full number of Warrant Shares requested in the Exercise Agreement is permitted hereunder, and the Company shall not have any obligation to verify or confirm the accuracy of such determination. For purposes of this Section 2.01(c), (i) the term “Maximum Percentage” shall mean 19.99% of the Equity Interests of a class that is registered under the 1934 Act that is outstanding at such time. In determining the number of Equity Interests of a particular class outstanding at any point in time, the Holder may rely on the number of outstanding Equity Interests of such class as reflected in (x) the Company’s most recent Form 20-F or Form 6-K filed with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) a more recent notice by the Company or its transfer agent to the Holder setting forth the number of Equity Interests of such class then outstanding. For any reason at any time, upon written or oral request of the Holder, the Company shall, within one (1) Business Day of such request, confirm orally and in writing to the Holder the number of Equity Interests of any class then outstanding. The provisions of this Section 2.01(c) shall be construed, corrected and implemented in a manner so as to effectuate the intended beneficial ownership limitation herein contained.

ARTICLE III

Section 3.01 Certain Adjustments.

(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of shares of the Ordinary Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3.01(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re- classification.

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(b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3.01(a) above, if at any time the Company grants, issues or sells any Ordinary Shares Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the provisions of Section 2.01(c)) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

(c) Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise, other than cash (including, without limitation, any distribution of stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction but excluding a dividend or distribution in either case falling within the scope of Section 3.01(a)(i) above) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the provisions of Section 2.01(c)) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution and in each such event provision shall be made so that the Holder shall receive upon exercise of this Warrant, in addition to the Warrant Shares issued upon such exercise, the Distribution which the Holder would have received if it had been the holder of such Ordinary Shares at the time of such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).

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(d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company and the Subsidiaries (taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares or 50% or more of the voting power of the voting equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Ordinary Shares or 50% of the voting power of the voting equity of the Company (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2.01(c) on the exercise of this Warrant), the number of shares of common equity of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2.01(c) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price and the number of Warrant Shares shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Ordinary Share in such Fundamental Transaction. If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3.01(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the Exercise Price hereunder (as may have been adjusted hereunder prior to such time) to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

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(e) Calculations. All calculations under this Section 3.01 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3.01, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.

(f) Notice to Holder.

(i) Adjustment to Exercise Price and Warrant Shares Number. Whenever the Exercise Price and number of Warrant Shares is adjusted pursuant to any provision of this Section 3.01, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth such adjustment and any resulting adjustment and setting forth a brief statement of the facts requiring such adjustment.

(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form, whether by way of return of capital or otherwise) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register (as defined below), at least 10 Business Days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

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ARTICLE IV

Section 4.01 Transfer of Warrant.

(a) Transferability.

(i) Subject to compliance with any applicable securities laws, and the conditions set forth in Section 5 of the Purchase Agreement and Section 4.01(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

(b) New Warrants. Subject to compliance with any applicable securities laws, and the conditions set forth in Section 5 of the Purchase Agreement this Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4.01(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Original Issuance Date of this Warrant and shall be identical with this Warrant except as to the Exercise Price and the number of Warrant Shares issuable pursuant thereto.

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(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

(d) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant or Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.

ARTICLE V

Section 5.01 Registration Rights. The Warrant Shares shall be subject to the registration rights and the terms and conditions thereof as provided for in Section 10 of the Purchase Agreement, which terms and conditions are incorporated herein by reference to the extent applicable to the Warrant Shares.

ARTICLE VI

Section 6.01 Miscellaneous.

(a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2.01(b)(i), except as expressly set forth in Section 3.01.

(b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

(c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

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(d) Authorized Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon exercise of the rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its Amended and Restated Articles or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (ii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the Exercise Price and the number of Warrant Shares for which this Warrant is exercisable, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

(e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.

(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.

(g) Non-waiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

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(h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

(i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

(j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

(k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

(l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

(m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

(n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

REE AUTOMOTIVE LTD.
By:
Name:	[Daniel Barel]
Title:	[Chief Executive Officer]

(Signature Page to Warrant)

EXHIBIT A

Exercise Agreement

TO: REE AUTOMOTIVE LTD.

(1) The undersigned hereby elects to purchase [●] Warrant Shares of the Company pursuant to the terms of the attached Warrant, subject to adjustment as provided for therein, and tenders payment of the Aggregate Exercise Price in full as follows:

☐ Cash or certified or official bank check in the amount of US$ [__], pursuant to Section 2.01(b)(i)(A) of the Warrant;

☐ Cashless Exercise, pursuant to Section 2.01(b)(i)(B) of the Warrant, with respect to __________ Warrant Shares, having a value of US$ [____];

☐ Surrender of [___] previously acquired Warrant Shares or other shares of Capital Stock, pursuant to Section 2.01(b)(i)(C) of the Warrant, having a value of US$ [____];

☐ A combination of the foregoing, including [DESCRIBE].

(2) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

______________________

The Warrant Shares shall be delivered to the following DWAC Account Number:

______________________

______________________

______________________

[SIGNATURE OF HOLDER]

Name of Holder: _________________________________________________________________________________

Signature of Authorized Signatory of Holder: __________________________________________________________

Name of Authorized Signatory: _____________________________________________________________________

Title of Authorized Signatory: ______________________________________________________________________

Date: __________________________________________________________________________________________

EXHIBIT B

Assignment Form

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant, hereby sells, assigns and transfers all of the rights of the undersigned under the within Warrant, with respect to the number of Ordinary covered thereby set forth herein below, unto:

Name of Assignee Address No. of Shares

Date:______________________

Name:

Address:

Phone Number:

Email Address:

Dated:

Holder’s Signature:

Holder’s Address: