VisionWave（VWAV）签署YA II PN第二轮500万美元可转债但零现金到账、认股权证行权价由9美元砍至1.5美元，毒性融资延续

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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
September
10, 2026
VISIONWAVE
HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
001-42741
99-5002777
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
300 Delaware Ave.
,
Suite 210 # 301
,
Wilmington
,
DE
19801
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area
code:
(302)
305-4790
N/A
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
VWAV
The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50
VWAVW
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an
emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
☒
If an emerging growth company, indicate by check mark
if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 1.01
Entry into a Material Definitive Agreement.
Background
As previously reported in the Current Report on Form
8-K filed by VisionWave Holdings, Inc. (the “
Company
”) with the Securities and Exchange Commission (the “
SEC
”)
on July 21, 2026 (the “
July 8-K
”), on July 20, 2026, the Company entered into a Securities Purchase Agreement (the
“
SPA
”) with YA II PN, Ltd. (the “
Investor
”) providing for the issuance and sale of convertible debentures
in an aggregate principal amount of up to $15,000,000, at a purchase price equal to 85% of principal amount, in two closings. At the first
closing on July 20, 2026, the Company issued to the Investor a convertible debenture in the principal amount of $10,000,000 (the “
July
Debenture
”) and a warrant to purchase 1,800,000 shares of the Company’s common stock, par value $0.01 per share (the “
Common
Stock
”), at an exercise price of $5.00 per share. The SPA provided for a second closing of $5,000,000 in principal amount of
convertible debentures (the “
Second Closing
”) upon the satisfaction of specified conditions.
As also previously reported, on February 26, 2026,
the Company issued to the Investor (i) a promissory note in the original principal amount of $20,000,000 (the “
February Note
”),
and (ii) a warrant to purchase 1,333,333 shares of Common Stock at an exercise price of $9.00 per share (the “
February Warrant
”).
The Company and the Investor are also parties to a Standby Equity Purchase Agreement dated as of July 25, 2025, as amended by Amendment
No. 1 dated January 19, 2026 (the “
SEPA
”).
Second Closing Letter Agreement
On September 10, 2026, the Company and the Investor
entered into a letter agreement (the “
Letter Agreement
”) providing for the consummation of the Second Closing and for
related amendments to the February Note, the February Warrant and the debentures issued under the SPA. The Letter Agreement constitutes
a “Transaction Document” under the SPA. Its material terms are as follows.
Second Closing.
The Company and the Investor
acknowledged that the conditions precedent to the Second Closing under the SPA had been satisfied. On September 10, 2026, the Company
issued and sold to the Investor a convertible debenture in the principal amount of $5,000,000 (the “
Debenture
” and,
together with the July Debenture, the “
Debentures
”), for a purchase price of $5,000,000.
No Cash Proceeds; Partial Repayment of the February
Note.
The Company irrevocably directed that the entire $5,000,000 purchase price for the Debenture be applied, immediately upon the
Second Closing, to repay principal outstanding under the February Note, and not be used for any other purpose. The Investor, as holder
of the February Note, satisfied its obligation to pay the purchase price by applying $5,000,000 directly against the principal of the
February Note, and the Company is deemed to have received the purchase price for all purposes under the SPA. Accordingly, the Company
received no cash proceeds from the Second Closing. All fees and expenses payable by the Company upon issuance of the Debenture pursuant
to the SPA were waived, and as a result, no fees or expenses were deducted from the proceeds of the Debenture. In addition, any premium
otherwise payable under the February Note in respect of the $5,000,000 repayment was waived, solely with respect to that payment; the
Letter Agreement does not otherwise waive or modify any payment or redemption premium or other amount payable under the February Note.
February Note Balance and Installment Schedule.
The parties acknowledged that the principal balance of the February Note immediately prior to the Second Closing was $7,469,178.42
and that, following the $5,000,000 repayment, the remaining principal balance is $2,469,178.42. The parties further agreed that the remaining
installment dates under the February Note are October 26, 2026, November 26, 2026, and December 26, 2026, with $823,059 of principal (or
the outstanding principal, if less) payable on each such date.
Deferral of Debenture Installments.
Effective
September 10, 2026, the Debentures were amended so that its first Installment Date is January 30, 2027, rather than December 30, 2026,
and no installment payment (including any installment of principal, interest or Payment Premium) is due under the Debentures before January
30, 2027.
Repricing of the February Warrant.
Effective
September 10, 2026, the exercise price of the February Warrant was reduced from $9.00 to $1.50 per share of Common Stock, subject to further
adjustment as provided in the February Warrant. The Company may not issue shares of Common Stock upon exercise of the February Warrant
at the reduced exercise price to the extent that the issuance, aggregated with any other issuance or transaction required to be aggregated
with it under the rules of The Nasdaq Stock Market LLC (“
Nasdaq
”), would exceed the maximum number of shares the Company
may issue without stockholder approval under Nasdaq Listing Rule 5635 (the “
5635 Cap
”), unless and until the Company
obtains the stockholder approval described below. Any portion of the February Warrant that is not exercisable at the reduced exercise
price by reason of the 5635 Cap remains exercisable at $9.00 per share (as adjusted under the February Warrant) until that approval is
obtained, at which time the reduced exercise price will apply to that portion without further action by either party.
The Investor acknowledged and agreed that the repricing
of the February Warrant, the delivery of any replacement warrant and the issuance of shares upon exercise of the February Warrant do not
constitute a “Dilutive Issuance,” or an issuance or sale of Common Stock or Convertible Securities, for purposes of Section
3(f) of the Debentures or any comparable provision of any other Transaction Document, and will not result in any adjustment to the Fixed
Price, the Floor Price or any conversion or exercise price under any Transaction Document.
Stockholder Meeting.
The Company agreed to
call, convene and hold, within 60 calendar days after September 10, 2026, an annual or special meeting of its stockholders to seek the
stockholder approval required under Nasdaq rules to permit issuances of Common Stock under the SEPA, the Debentures and the February Warrant
in excess of the maximum number of shares issuable without such approval. The meeting may be adjourned or postponed from time to time
to permit the solicitation of additional proxies. The Company agreed that it will recommend that its stockholders approve the proposal,
solicit proxies in favor of the proposal and use its reasonable best efforts to obtain approval. If approval is not obtained, the Company
agreed to use commercially reasonable efforts to seek approval at not less than one subsequent meeting held within 180 days after the
first meeting. The Company’s sole obligation is to seek such approval, and the failure to obtain it will not constitute a breach
of the Letter Agreement or any other Transaction Document or an Event of Default under any Transaction Document.
Registration of Warrant Shares.
To the extent
required as a result of the repricing, the Company agreed to promptly amend, supplement or update the registration statement that registered
the Investor’s resale of the shares issuable upon exercise of the February Warrant, including by prospectus supplement, post-effective
amendment or new registration statement, and to use commercially reasonable efforts to maintain the effectiveness of that registration
statement and the availability of the related prospectus.
Public Disclosure.
The Company agreed to file
this Current Report on Form 8-K within four business days after the date of the Letter Agreement.
Ratification.
Except as expressly set forth
in the Letter Agreement, the SPA, the February Note, the February Warrant and the SEPA remain in full force and effect. The Letter Agreement
is governed by New York law.
The Debenture
The Debenture was issued under the SPA and is substantially
on the terms of the July Debenture described in the July 8-K, as modified by the Letter Agreement and as described below. Capitalized
terms used in this description and not otherwise defined have the meanings given to them in the Debenture.
●
Maturity.
July 20, 2027, subject to extension at the option of the holder.
●
Interest.
5.00% per annum, increasing to 18.00% per annum for so long as an Event of Default is
continuing, calculated on a 365-day year.
●
Installment
payments.
Beginning January 30, 2027 and on the same day of each month thereafter (the
28th in February), the Company must repay $1,750,000 of principal in the aggregate across
the Debenture and all other debentures issued under the SPA (or the outstanding principal,
if less), plus a Payment Premium equal to 2% of the principal paid, plus accrued and unpaid
interest. The Company may pay each installment in cash or by delivering one or more Advance
Notices under the SEPA, in which case the Investor offsets the amount it owes the Company
under the SEPA against the installment. While the Debenture is outstanding, unless the Investor
agrees otherwise, any Advance Notice under the SEPA is treated as an installment repayment
and the Company must select the Option 2 Pricing Period. The Payment Premium does not apply
to an installment prepaid with Advance Notice proceeds at least 30 days before it is due.
●
Optional
redemption.
The Company may redeem all amounts outstanding under the Debenture early,
on notice delivered after the close of trading on a Trading Day, but only if the VWAP of
the Common Stock on the date of the notice is less than the Fixed Price (unless the holder
agrees otherwise), at a price equal to the principal redeemed plus a 5% Redemption Premium
plus accrued and unpaid interest. The holder may convert all or part of the Debenture during
the three Trading Days following the notice. The Company may not otherwise prepay the Debenture
without the holder’s consent.
●
Conversion.
The holder may convert principal, interest and other amounts outstanding at any time
at a fixed conversion price of $5.00 per share (the “
Fixed Price
”). Following
an Event of Default, and for so long as amounts remain outstanding, the holder may instead
convert at the lower of the Fixed Price and the Variable Price, which is 90% of the lowest
daily VWAP during the 10 consecutive Trading Days immediately preceding the conversion date,
but not less than a floor price of $0.702 per share (the “
Floor Price
”).
●
Anti-dilution.
The Fixed Price and the Floor Price are subject to proportionate adjustment for stock
dividends, stock splits, combinations (including reverse stock splits) and reclassifications.
In addition, if the Company issues or sells Common Stock or Convertible Securities (other
than Excluded Securities) at an effective price per share below the Fixed Price then in effect,
the Fixed Price is reduced to that lower price. This adjustment is not limited by the Floor
Price. Excluded Securities include, among others, shares issued under approved equity incentive
plans, upon conversion of the Debentures or exercise of the warrants issued under the SPA,
upon exercise of options or convertible securities outstanding before the SPA in accordance
with their unamended terms, in stock splits and similar recapitalizations, under the SEPA,
in board-approved acquisitions and strategic transactions not undertaken primarily to raise
capital, and upon exercise of, or in connection with any amendment, replacement, reissuance
or repricing of, the February Warrant (including the reduction of its exercise price to $1.50).
Excluded Securities do not include Common Stock sold in registered offerings, including at-the-market
offerings.
●
Conversion
limitations.
The holder may not convert to the extent that it and its affiliates would
beneficially own more than 4.99% of the outstanding Common Stock after the conversion; the
holder may waive this limitation on not less than 65 days’ notice to the Company. The
Company may not issue shares upon conversion in excess of the number it may issue in compliance
with Nasdaq rules (the “
Exchange Cap
”) unless its stockholders have approved
issuances in excess of the Exchange Cap.
●
Share
delivery and reserve.
The Company must deliver conversion shares by the first Trading
Day after receipt of a conversion notice and is subject to customary buy-in remedies for
a failure to deliver. The Company must reserve the maximum number of shares issuable upon
conversion, calculated as if the Debenture were convertible at the Floor Price and without
regard to the conversion limitations.
●
Events
of Default.
Events of Default include, among others: failure to pay any amount under
the Debenture or any other Transaction Document within five business days after it is due;
bankruptcy and insolvency events; a default on other indebtedness exceeding $500,000 that
results in acceleration; unstayed judgments exceeding $500,000; the Common Stock ceasing
to be listed or quoted on a Principal Market for ten consecutive Trading Days; a Change of
Control Transaction unless the Debenture is retired; failure to deliver conversion shares
within two Trading Days after the Share Delivery Date; failure to timely file any periodic
or current report with the SEC; any representation or warranty in a Transaction Document
proving materially incorrect; any event of default under the other debentures, or any breach
of a material term of any other instrument held by, or agreement with, the holder; and any
uncured material breach of a covenant under the Debenture or any other Transaction Document.
Upon an Event of Default, the holder may declare the outstanding principal, the Payment Premium
and accrued interest immediately due and payable in cash (automatically, in the case of bankruptcy
and insolvency events).
●
Covenants.
While the Debenture is outstanding, the Company may not, without the holder’s consent,
amend its charter documents in a manner that adversely affects the holder’s rights,
repurchase its equity securities (subject to limited exceptions), or enter into any agreement
that would restrict, materially delay, conflict with or impair its ability to perform its
obligations under the Debenture.
●
Other
terms.
The Debenture is a direct obligation of the Company, is governed by New York law
and is designated an instrument for the payment of money only under Section 3213 of the New
York Civil Practice Law and Rules.
The foregoing descriptions of the Letter Agreement,
the Debenture and the SPA do not purport to be complete and are qualified in their entirety by reference to the full text of the Letter
Agreement and the Debenture, which are filed as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K, and the SPA,
which was filed as Exhibit 10.1 to the July 8-K, each of which is incorporated herein by reference. The agreements have been included
to provide investors with information regarding their terms. They are not intended to provide any other factual information about the
Company. The representations, warranties and covenants contained in the agreements were made solely for the purposes of those agreements
and as of specific dates, were solely for the benefit of the parties to them, and may be subject to limitations agreed upon by the parties.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
On September 10, 2026, the Company issued the Debenture
in the principal amount of $5,000,000, bearing interest at 5.00% per annum and maturing July 20, 2027, with monthly installment payments
beginning January 30, 2027, on the terms described in Item 1.01. The entire $5,000,000 purchase price was applied to repay principal of
the February Note, so the issuance of the Debenture did not increase the aggregate principal amount of the Company’s indebtedness
to the Investor.
Item 3.02
Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
On September 10, 2026, the Company issued the Debenture
to the Investor for a purchase price of $5,000,000, paid by application of that amount against the principal of the February Note, and
amended the February Warrant to reduce its exercise price from $9.00 to $1.50 per share, subject to the 5635 Cap. Assuming conversion
of the full $5,000,000 principal amount of the Debenture at the Fixed Price of $5.00 per share, the Debenture would be convertible into
1,000,000 shares of Common Stock. Following an Event of Default, the Debenture could be converted at a price as low as the Floor Price
of $0.702 per share, which would result in the issuance of up to 7,122,508 shares of Common Stock in respect of principal alone. Additional
shares may be issued upon conversion of accrued interest and other amounts. Any conversion is subject to the 4.99% beneficial ownership
limitation and the Exchange Cap described in Item 1.01. The February Warrant, as amended, is exercisable for 1,333,333 shares of Common
Stock, subject to the 5635 Cap.
The Debenture was issued, and the February Warrant
was amended, in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the
“
Securities Act
”), and Rule 506(b) of Regulation D promulgated thereunder, and, in the case of the amendment of the
February Warrant, also Section 3(a)(9) of the Securities Act. The Investor represented that it is an “accredited investor”
as defined in Rule 501(a) of Regulation D and that it is acquiring the securities for its own account. The securities were offered and
sold without any general solicitation or general advertising, and no underwriting discounts or commissions were paid in connection with
the Second Closing or the amendment of the February Warrant. The Debenture and the shares of Common Stock issuable upon its conversion
have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No.
Description
4.1*
Convertible Debenture No. VWAV-5, dated September 10, 2026, issued by VisionWave Holdings, Inc. to YA II PN, Ltd.
10.1*
Letter Agreement, dated September 10, 2026, between VisionWave Holdings, Inc. and YA II PN, Ltd., regarding the Second Closing under the Securities Purchase Agreement and the amendment of the February 2026 Warrant.
10.2
Securities Purchase Agreement, dated as of July 20, 2026, between VisionWave Holdings, Inc. and YA II PN, Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 21, 2026).
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
* Filed herewith.
Cautionary Note Regarding Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking
statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended,
and the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s obligations and ability to
make installment and other payments under the Debentures and the February Note, the use of the SEPA to satisfy installment payments, the
conversion of the Debentures and the exercise of the February Warrant, the stockholder meeting and the approval sought at that meeting,
the registration of shares issuable upon exercise of the February Warrant, and the effect of any reverse stock split. Forward-looking
statements are generally identified by words such as “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” “should,” “would,”
“plan,” “project,” “forecast,” “predict” and similar expressions.
Forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those expressed or implied, including, among others: the Company’s
ability to generate or raise sufficient cash, or to access the SEPA, to make installment payments beginning January 30, 2027 and to repay
the Debentures at maturity and the February Note when due; the occurrence of an Event of Default, which would permit acceleration and
conversion at prices as low as the Floor Price; substantial dilution to existing stockholders from conversions of the Debentures, exercises
of the February Warrant and other warrants, and sales under the SEPA; reductions in the Fixed Price under the anti-dilution provisions
of the Debentures, including as a result of registered offerings at prices below the Fixed Price; the Company’s ability to obtain
stockholder approval of issuances in excess of the Exchange Cap and the 5635 Cap; the effect of the transactions on the market price of
the Common Stock; the Company’s ability to maintain the listing of the Common Stock on Nasdaq; and the other risks described in
the Company’s filings with the SEC, including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form
10-Q. All forward-looking statements speak only as of the date of this Current Report and are expressly qualified in their entirety by
these cautionary statements. The Company undertakes no obligation to update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise, except as required by law. Investors are cautioned not to place undue reliance on these
forward-looking statements.
SIGNATURE
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 hereunto duly authorized.
Date: September 14, 2026
VISIONWAVE HOLDINGS, INC.
By:
/s/ Douglas Davis
Name: Douglas Davis
Title: Chief Executive Officer

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EX-10.1
2
e7941_10-1.htm
EXHIBIT 10.1
EXHIBIT 10.1
September 10, 2026
VisionWave Holdings,
Inc. 300 Delaware Avenue
Wilmington, DE 19801 Attn:
Douglas Davis
E-mail: ddavis@vwav.inc
Re:
Second Closing under Securities Purchase Agreement; Amendment of February 2026
Warrant
Dear Mr. Davis:
Reference is made to
(i) the Securities Purchase Agreement, dated as of July 20, 2026 (as amended, restated, supplemented or otherwise modified from time to
time, the “
SPA
”), between VisionWave Holdings, Inc. (the “
Compan
y”) and YA II PN, Ltd. (the “
Investor
”),
(ii) the Promissory Note, dated February 26, 2026, issued by the Company to the Investor in the original principal amount of $20,000,000
and designated as Note No. VWAV-3 (the “
February Note
”),
(iii) the Warrant to Purchase Common Shares,
dated February 26, 2026, issued by the Company to the Investor and designated as Warrant No. VWAV-1 (the “
February Warrant
”),
and (iv) the Standby Equity Purchase Agreement, dated as of July 25, 2025, between the Company and the Investor (as amended, restated,
supplemented or otherwise modified from time to time, the “
SEPA
”). Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the SPA, the February Warrant, or the SEPA, as applicable.
The
Company and the Investor acknowledge that conditions precedent to the Second Closing set forth in the SPA have been satisfied, and in
consideration of the mutual covenants set forth herein, the parties desire to facilitate the Second Closing, on the terms and conditions
set forth herein. The parties hereby agree as follows:
Second Closing;
Waiver of Discount
. Solely with respect to the Second Closing, the Investor hereby waives (in accordance with the terms of Section
9(k) of the SPA), subject to the satisfaction by the Company of the Use of Proceeds set forth in this agreement, the 15% discount otherwise
provided for in the SPA. One the date hereof, the Investor shall purchase a Convertible Debenture having a Subscription Amount and principal
amount of $5,000,000 for an aggregate Purchase Price of $5,000,000. Except for the limited waivers expressly set forth in this paragraph,
the terms and conditions applicable to the Second Closing under the SPA remain in full force and effect.
Use of Proceeds
of Second Closing
. The Company hereby irrevocably directs and agrees that all $5,000,000 of gross proceeds from the Second Closing
shall, immediately upon the consummation of the Second Closing, be applied as a repayment of amounts outstanding under
the
February Note in accordance with its terms and shall not be used for any other purpose. The Investor, in its capacity as holder of the
February Note, may satisfy its obligation to pay the Purchase Price at the Second Closing by applying such $5,000,000 directly against
amounts then outstanding under the February Note, and the Company shall be deemed to have received the Purchase Price for all purposes
under the SPA. The allocation of such repayment shall be made solely to the principal owed under the February Note, and any premium shall
be waived solely with respect to such payment. Nothing herein waives or modifies any payment or redemption premium or other amount payable
thereunder other than as specifically set forth herein.
The
parties acknowledge and agree that as of the date hereof, prior to the Second Closing, the remaining principal balance owed on the February
Note is $7,469,178.42 and following the application of the $5,000,000 payment described above, the remaining principal balance owed on
the February Note shall be $2,469,178.42. The parties further agree that the remaining Installment Dates for the February Note shall be
October 26, 2026, November 26, 2026, and December 26, 2026, and the principal amount to be paid on each such Installment Date shall be
$823,059 (or the outstanding Principal if less than such amount). No Payment Premium, Redemption Premium, default interest or other premium,
penalty or charge shall be payable by reason of the rescheduling effected by this paragraph, and neither such rescheduling nor the payment
of the February Note on December 30, 2026 in accordance herewith shall constitute a breach or default under, or an Event of Default under,
the February Note, the SPA, the Debentures or any other Transaction Document.
Amendment of Debentures;
Deferral of Installment Dates
. Effective as of the date hereof, each Convertible Debenture issued by the Company to the Investor pursuant
to the SPA (the Convertible Debenture issued on July 20, 2206 together with the Convertible Debenture issued by the Company to the Investor
on the date hereof and designated as Debenture No. VWAV-5, collectively, the “
Debentures
”) is hereby amended so that
the first Installment Date thereunder shall be January 30, 2027. Notwithstanding anything to the contrary in any Debenture or in any other
Transaction Document, no payment pursuant to Section 1(c) of the Debentures (including any Installment Amount, installment of principal,
interest, or Payment Premium) shall be due or payable under any Debenture prior to January 30, 2027, and the first Installment Date under
each Debenture shall be January 30, 2027. Except as expressly amended by this paragraph, each Debenture remains unchanged and in full
force and effect.
Amendment of
February Warrant
. Effective as of the date hereof, the Exercise Price (as defined in the February Warrant) is hereby reduced
from $9.00 per Common Share to $1.50 per Common Share, subject to further adjustment as provided in the February Warrant. The
February Warrant is hereby amended accordingly, and each reference therein to the “Exercise Price” shall mean $1.50 per
Common Share, as so adjusted from time to time. At the Investor’s request, the Company shall promptly deliver a replacement
warrant reflecting such amended Exercise Price. Notwithstanding the foregoing, the Company shall not issue any Common Shares upon
exercise of the February Warrant at the reduced Exercise Price to the extent that such issuance, aggregated with any other issuance
or transaction required to be aggregated therewith under the rules of the Principal Market, would exceed the maximum number of
Common Shares that the Company may issue without shareholder approval under Nasdaq Listing Rule 5635 (such maximum number, the
“5635 Cap”), unless and until the Company has obtained the shareholder approval described in the paragraph captioned
“Shareholder Meeting” below. To the extent any portion of the February Warrant is not exercisable at the reduced
Exercise Price by reason of the 5635 Cap, such portion shall remain exercisable at $9.00 per Common Share (as adjusted in accordance
with the terms of the February Warrant) until such shareholder approval is obtained, whereupon the reduced
Exercise
Price shall apply to such portion without further action by either party. The Investor acknowledges and agrees that the amendment of
the Exercise Price effected by this paragraph, the delivery of any replacement warrant contemplated hereby, and the issuance of
Common Shares upon exercise of the February Warrant, do not and shall not constitute a Dilutive Issuance, or an issuance or sale of
Common Shares or Convertible Securities, for purposes of Section 3(f) of any Debenture or any comparable provision of any other
Transaction Document, and shall not result in any adjustment to the Fixed Price, the Floor Price or any conversion or exercise price
under any Transaction Document. Except as expressly amended by this paragraph, the February Warrant remains unchanged and in full
force and effect.
Shareholder Meeting
.
The Company shall, within 60 calendar days after the date of this letter agreement, duly call, convene and hold a meeting of its shareholders,
which may be its annual meeting of shareholders or a special meeting called for such purpose, for the purpose of seeking the shareholder
approval required under the rules of the Principal Market to permit issuances of Common Shares under the SEPA, the Debentures and the
February Warrant in excess of the maximum number of shares applicable thereto; provided, that such meeting may be adjourned or postponed
from time to time in order to permit the solicitation of additional proxies, and no such adjournment or postponement shall constitute
a failure to comply with this paragraph. The Company shall recommend that its shareholders approve such proposal, solicit proxies in favor
of such approval, and use its reasonable best efforts to obtain such approval at the meeting. If such shareholder approval is not obtained
at such meeting, the Company shall use commercially reasonable efforts to seek such approval at not less than one subsequent meeting of
its shareholders held within 180 days after such meeting. The Company’s sole obligation under this paragraph is to seek such shareholder
approval as provided herein, and the failure to obtain such shareholder approval shall not constitute a breach of this letter agreement
or of any other Transaction Document or an Event of Default under any Transaction Document.
Current Report
.
The Company shall, not later than four (4) Business Days after the date of this letter agreement, file with the SEC a Current Report on
Form 8-K describing all material terms of the transactions contemplated hereby and attaching this letter agreement and any other material
documents as exhibits to the extent required by the Exchange Act. From and after such filing, the Company shall have publicly disclosed
all material, non-public information provided to the Investor (or its representatives or agents) by the Company or any of its officers,
directors, employees, agents or representatives in connection with the transactions contemplated hereby.
Registration of
February Warrant Shares
. To the extent required under the Securities Act, the rules and regulations of the SEC or other applicable
law as a result of the amendment to the February Warrant contemplated hereby, the Company shall promptly take all actions necessary or
appropriate to amend, supplement or update the registration statement that registered the resale by the Investor of the Common Shares
issuable upon exercise of the February Warrant, including by filing a prospectus supplement, post-effective amendment or new registration
statement, as applicable, and shall use commercially reasonable efforts to maintain the effectiveness of such registration statement and
the availability of the related prospectus for such resales.
Ratification;
Limited Effect
. Except as expressly set forth herein, the SPA, the February Note, the February Warrant and the SEPA are hereby
ratified and confirmed and remain in full force and effect. This letter agreement constitutes a Transaction Document for purposes of
the SPA. No waiver or amendment set forth herein shall be construed as a waiver of any other
provision
or of any present or future default, or as an agreement to provide any similar waiver or amendment in the future.
Miscellaneous
.
This letter agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to its
principles of conflicts of laws that would require the application of the law of any other jurisdiction. This letter agreement may be
executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.
Delivery by facsimile, e-mail or other electronic transmission, and electronic signatures, shall have the same legal effect as delivery
of an original manually signed counterpart.
If
the foregoing correctly sets forth the understanding between the Company and the Investor, please so indicate in the space provided below,
whereupon this letter shall constitute a binding agreement between the Company and the Investor.
Very truly yours,
YA II PN, LTD.
By: Yorkville Advisors Global, LP
Its: Investment Manager
By: Yorkville Advisors Global II, LLC
Its: General Partner
By:
/s/ Michael Rosselli
Name: Michael Rosselli
Title: Member
ACKNOWLEDGED AND AGREED:
VISIONWAVE HOLDINGS, INC.
By:
/s/ Douglas Davis
Name: Douglas Davis
Title: Chief Executive Officer

----- e7941_ex4-1.htm -----
EX-4.1
3
e7941_ex4-1.htm
EXHIBIT 4.1
EXHIBIT 4.1
NEITHER THIS DEBENTURE NOR THE SECURITIES
INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD 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. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
VISIONWAVE HOLDINGS, INC.
CONVERTIBLE DEBENTURE
Original Principal Amount: $5,000,000
Issuance Date: September 10, 2026
Number: VWAV-5
FOR VALUE RECEIVED,
VISIONWAVE HOLDINGS, INC., an entity
organized under the laws of the State
of Delaware (the “
Company
”), hereby promises to pay to the order of YA II PN, LTD., or its registered assigns (the
“
Holder
”) the amount set out above as the Original Principal Amount (or such lesser amount as reduced pursuant to the
terms hereof pursuant to repayment, redemption, conversion or otherwise, the “
Principal
”) and the Payment Premium or
the Redemption Premium, as applicable, in each case when due, and to pay interest (“
Interest
”) on any outstanding Principal
at the applicable Interest Rate (as defined below) from the date set out above as the Issuance Date (the “
Issuance Date
”)
until the same becomes due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case
in accordance with the terms hereof). The Issuance Date is the date of the first issuance of this Convertible Debenture (as amended, amended
and restated, extended, supplemented or otherwise modified in writing from time to time, this “
Debenture
”) regardless
of the number of transfers and regardless of the number of instruments, which may be issued to evidence such Debenture. This Debenture
is issued pursuant to that certain Securities Purchase Agreement dated as of July 20, 2026, (as it may be amended from time to time, the
“
Securities Purchase Agreement
”), between the Company and the Holder. Certain capitalized terms used herein are defined
in Section (12).
(1)
GENERAL
TERMS
(a)
Maturity
Date
. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal,
accrued and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Debenture. The “
Maturity
Date
” shall be July 20, 2027, as may be extended at the option of the Holder.
(b)
Interest
Rate and Payment of Interest
. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal to 5.00% (“
Interest
Rate
”), which Interest Rate shall increase to an annual rate of 18.00% upon the occurrence of an Event of Default (for so long
as such Event of Default is continuing). Interest shall be calculated based on a 365- day year and the actual number of days elapsed,
to the extent permitted by applicable law.
(c)
Installment
Payments
. Beginning on January 30, 2027, and continuing on the same day of each successive calendar month (except for February, which
shall be the 28th), (each, an “
Installment Date
”), the Company shall repay a portion of the outstanding balance of
this Debenture in an amount equal to the sum of (i) $1,750,000 of Principal amount in the aggregate among this Debenture and all Other
Debentures (or the outstanding Principal if less than such amount) (“
Installment Principal Amount
”), plus (ii) the
Payment Premium in respect of such Installment Principal Amount, if applicable, and (iii) accrued and unpaid interest hereunder as of
each Installment Date (collectively,
the “
Installment Amount
”). With respect to the payment of any Installment Amount
by the Company hereunder, the Company shall, at its own option, repay each Installment Amount either (A) in cash on or before the Installment
Date, or (B) by submitting an Advance Notice (as defined in the SEPA) (an “
Advance Repayment
”), or a series of Advance
Notices, each with an Advance Date (as defined in the SEPA) on or before the applicable Installment Date, or any combination of (A) or
(B) as determined by the Company. In respect of any Installment Amount, or portion thereof, to be repaid by the Company in accordance
with (A) of this Section, the Company shall pay such Installment Amount to the Holder by wire transfer of immediately available funds
in cash on or before such Installment Date. If the Company elects an Advance Repayment in accordance with (B) of this Section, for all
or a portion of an Installment Amount, then the Company shall deliver an Advance Notice or a series of Advance Notices to the Holder in
accordance with the terms and conditions of the SEPA, that will have an Advance Date or Advance Dates on or before the applicable Installment
Date. Upon the closing of such Advance Notices in accordance with the SEPA, the Holder shall offset the amount due to be paid by the Holder
to the Company under the SEPA against an equal amount of the Installment Amount to be paid by the Advance Repayment. If, on the Installment
Date any portion of the Installment Amount remains unpaid, the Company shall repay such outstanding Installment Amount as a cash repayment
pursuant to (A) of this Section. Unless otherwise agreed by the Holder, any Advance Notice delivered to the Holder while this Debenture
remains outstanding, shall be treated as an Advance Repayment with the proceeds of any such Advance Notice due to be paid to the Company
first used to repay any Installment Amount past due and then to any Installment Amount coming due in chronological order. If the Company
uses proceeds from an Advance Notice to repay any future Installment Amount that is not due for at least 30 days, then the Payment Premium
shall not apply to such Installment Amount being paid. For so long as this Debenture is outstanding, with respect to any Advance Notice
submitted by the Company, the Company shall select an Option 2 Pricing Period (as defined in the SEPA), unless otherwise agreed by the
Holder.
If this Debenture
and any Other Debentures are held by more than one holder, then the Installment Principal Amount due to be paid shall be allocated
to each holder based on each holder’s pro-rata portion of the total outstanding Principal amount outstanding on this Debenture
and all Other Debentures. If this Debenture and all Other Debentures are held by one holder, then such holder shall decide the
allocation of payments between this Debenture and all Other Debentures in its sole discretion.
(d)
Optional
Redemption
. The Company at its option shall have the right, but not the obligation, to redeem (“
Optional Redemption
”)
early all amounts outstanding under this Debenture as described in this Section;
provided,
that the Company provides the Holder
with written notice (each, a “
Redemption Notice
”) of its desire to exercise an Optional Redemption, which Redemption
Notice (i) shall be delivered to the Holder after the close of regular trading hours on a Trading Day, and (ii) may only be given if the
VWAP of the Common Shares was less than the Fixed Price on the date such Redemption Notice is delivered, unless otherwise agreed by the
Holder. Each Redemption Notice shall be irrevocable and shall specify the outstanding balance of the Debenture to be redeemed and the
Redemption Amount. The “
Redemption Amount
” shall be an amount equal to (a) the outstanding Principal balance being
redeemed by the Company
plus
(b) the Redemption Premium in respect of such Principal amount
plus
(c) all accrued and unpaid
interest hereunder as of the date of such redemption. After receipt of a Redemption Notice, the Holder shall have three (3) Trading Days
(beginning with the Trading Day immediately following the date such Redemption Notice is delivered to the Holder in accordance with this
term of this Section 1(d)) to elect to convert all or any portion of this Debenture. On the fourth (4th) Trading Day following the delivery
of the applicable Redemption Notice, the Company shall deliver to the Holder the Redemption Amount with respect to the Principal amount
redeemed to the extent not converted and otherwise after giving effect to conversions or other payments made during such three (3) Trading
Day period.
(e)
Other
than as specifically set forth in this Debenture, the Company shall not have the ability to make any early repayments without the consent
of or at the request of the Holder.
(f)
Payment
Dates
. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.
(2)
EVENTS
OF DEFAULT.
2
(a)
An
“
Event of Default
,” wherever used herein, means any one of the following events (whatever the reason and whether it
shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body) shall have occurred:
(i)
The
Company’s failure to pay to the Holder any amount of Principal, the Redemption Amount, the Payment Premium, Interest, or other amounts
when and as due under this Debenture or any other Transaction Document and within five (5) Business Days after such payment is due;
(ii)
(A)
The Company or any Subsidiary of the Company shall commence, or there shall be commenced against the Company or any Subsidiary of the
Company, any proceeding under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or
the Company or any Subsidiary of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating
to the Company or any Subsidiary of the Company, in any such bankruptcy, insolvency or other proceeding which remains undismissed for
a period of sixty one (61) days; (B) the Company or any Subsidiary of the Company is adjudicated insolvent or bankrupt; (C) any order
of relief or other order approving any such case or proceeding is entered; (D) the Company or any Subsidiary of the Company suffers any
appointment of any custodian, private or court appointed receiver or the like for it or all or substantially all of its property which
continues undischarged or unstayed for a period of sixty one (61) days; (E) the Company or any Subsidiary of the Company makes a general
assignment of all or substantially all of its assets for the benefit of creditors; (F) the Company or any Subsidiary of the Company shall
fail to pay, shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; (G) the Company
or any Subsidiary of the Company shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts; (H) the Company or any Subsidiary of the Company shall by any act or failure to act expressly indicate its consent to, approval
of or acquiescence in any of the foregoing; or (I) any corporate or other action is taken by the Company or any Subsidiary of the Company
for the purpose of effecting any of the foregoing;
(iii)
The
Company or any Subsidiary of the Company shall default in any of its obligations under any note, debenture, mortgage, credit agreement
or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may
be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Company
or any Subsidiary of the Company in an amount exceeding $500,000, whether such indebtedness now exists or shall hereafter be created and
such default is not cured within the time prescribed by the documents governing such indebtedness or if no time is prescribed, within
ten (10) Business Days, and as a result, such indebtedness becomes or is declared due and payable;
(iv)
A
final judgment or judgments for the payment of money in excess of $500,000 in the aggregate are rendered against the Company and/or any
of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a creditworthy party shall not be included in calculating the $500,000 amount set forth above
so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall
be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or
such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
(v)
The
Common Shares shall cease to be quoted or listed for trading, as applicable, on any Principal Market for a period of ten (10) consecutive
Trading Days;
(vi)
The
Company or any Subsidiary of the Company shall be a party to any Change of Control Transaction unless in connection with such Change of
Control Transaction this Debenture is retired;
3
(vii)
The
Company’s (A) failure to deliver the required number of Common Shares to the Holder within two (2) Trading Days after the applicable
Share Delivery Date or (B) notice, written or oral, to any holder of the Debenture, including by way of public announcement, at any time,
of its intention not to comply with a request for conversion of all or a portion of this Debenture into Common Shares that is tendered
in accordance with the provisions of this Debenture;
(viii)
The
Company shall fail for any reason to deliver the payment in cash pursuant to a Buy-In (as defined below) within five (5) Business Days
after such payment is due;
(ix)
The
Company’s failure to timely file with the Commission any Periodic Report on or before the due date of such filing as established
by the Commission, it being understood, for the avoidance of doubt, that due date includes any permitted filing deadline extension under
Rule 12b-25 under the Exchange Act;
(x)
Any
representation or warranty made or deemed to be made by or on behalf of the Company in or in connection with any Transaction Document,
or any waiver hereunder or thereunder, shall prove to have been incorrect in any material respect (or, in the case of any such representation
or warranty already qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed
made;
(xi)
(A)
Any material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder, ceases to be in full force and effect; (B) the Company or any other Person contests in writing the
validity or enforceability of any provision of any Transaction Document; or
(C) the Company denies in writing that
it has any or further liability or obligation under any Transaction Document, or purports in writing to revoke, terminate (other than
in accordance with the relevant termination provisions) or rescind any Transaction Document;
(xii)
The
Company uses the proceeds of the issuance of this Debenture, whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulations T, U and X of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose;
(xiii)
Any
Event of Default (as defined in the Other Debentures or in any Transaction Document other than this Debenture) occurs with respect to
any Other Debentures, or any breach of any material term of any other debenture, note, or instrument held by the Holder in the Company
or any agreement between or among the Company and the Holder; or
(xiv)
The
Company shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach
or default of any provision of this Debenture (except as may be covered by this Section 2(a) above) or any other Transaction Document,
which is not cured or remedied within the time prescribed or if no time is prescribed within ten (10) Business Days.
(b)
During
the time that any portion of this Debenture is outstanding, if any Event of Default has occurred (other than an event with respect
to the Company described in Section (2)(a)(ii)), the full unpaid Principal amount of this Debenture, together with the Payment
Premium in respect of such Principal amount, and all interest and other amounts owing in respect of this Debenture to the date of
acceleration, shall become, at the Holder’s election given by notice pursuant to Section (5), immediately due and payable in
cash; provided that, in the case of any event with respect to the Company described in Section (2)(a)(ii), the full unpaid Principal
amount of this Debenture, together with the Payment Premium in respect of such Principal amount, and all accrued and unpaid interest
and other amounts owing in respect of this Debenture to the date of acceleration, shall automatically become due and payable, in
each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company.
Furthermore, in addition to any other remedies,
4
the Holder shall have the right (but not the obligation) to convert, on one or more
occasions all or part of the Debenture in accordance with Section (3)(b) (and subject to the limitations set out in Section
(3)(c)(i) and Section (3)(c)(ii)) at the lower of the Fixed Price or the Variable Price at any time after an Event of Default has
occurred and is continuing until all amounts outstanding under this Debenture have been repaid in full. The Holder need not provide,
and the Company hereby waives, any presentment demand, protest or other notice of any kind (other than any required notice of
conversion), and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law. Such declaration may be rescinded and annulled by the Holder in writing at any time prior to
payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent
thereon.
(3)
CONVERSION
OF DEBENTURE
. This Debenture shall be convertible into Common Shares, on the terms and conditions set forth in this Section (3).
(a)
Conversion
Right
. Subject to the limitations of Section (3)(c), at any time or times on or after the Issuance Date, the Holder shall be entitled
to convert any portion of the outstanding and unpaid Conversion Amount into fully paid and nonassessable Common Shares in accordance with
Section (3)(b), at the Fixed Price.
(b)
Mechanics
of Conversion.
(i)
Optional
Conversion
. To convert any Conversion Amount into Common Shares on any date (a “
Conversion Date
”), the Holder
shall (A) transmit by email (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an
executed notice of conversion in the form attached hereto as
Exhibit I
(the “
Conversion Notice
”) to the Company
and (B) if required by Section (3)(b)(iii), surrender this Debenture to a nationally recognized overnight delivery service for delivery
to the Company (or an indemnification undertaking reasonably satisfactory to the Company with respect to this Debenture in the case of
its loss, theft or destruction). The number of Common Shares issuable upon
conversion of any Conversion Amount pursuant to
this Section (3)(a) shall be determined by dividing (x) such Conversion Amount by either (y) the Fixed Price, in respect of a conversion
pursuant to Section 3(a), or (z) the Variable Price, in respect of a conversion pursuant to Section 2(b). The Company shall not issue
any fraction of a Common Shares upon any conversion. All calculations under this Section (3) shall be rounded to the nearest $0.0001.
If the issuance would result in the issuance of a fraction of a Common Share, the Company shall round such fraction of a Common Share
up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to
the issuance and delivery of Common Shares upon conversion of any Conversion Amount. On or before the first (1st) Trading Day following
the date of receipt of a Conversion Notice (the “
Share Delivery Date
”), the Company shall (X) if legends are not required
to be placed on certificates or the book-entry position of the Common Shares and provided that the Transfer Agent is participating in
the Depository Trust Company’s (“
DTC
”) Fast Automated Securities Transfer Program, instruct such transfer agent
to credit such aggregate number of Common Shares to which the Holder shall be entitled to the Holder’s or its designee’s
balance account with DTC through its Deposit Withdrawal Agent Commission system or (Y) if the Transfer Agent is not participating in
the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate
or book-entry position, registered in the name of the Holder or its designee, for the number of Common Shares to which the Holder shall
be entitled which certificates shall not bear any restrictive legends unless required pursuant to rules and regulations of the Commission.
If this Debenture is physically surrendered for conversion and the outstanding Principal of this Debenture is greater than the Principal
portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than three (3)
Business Days after receipt of this Debenture and at its own expense, issue and deliver to the holder a new Debenture representing the
outstanding Principal not converted. The Person or Persons entitled to receive the Common Shares issuable upon a conversion of this Debenture
shall be treated for all purposes as the record holder or holders of such Common Shares upon the transmission of a Conversion Notice.
(ii)
Company’s
Failure to Timely Convert
. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery
Date to issue and deliver a certificate to the Holder or credit the Holder’s balance account with DTC for the number of Common Shares
to which the Holder is entitled upon such Holder’s conversion of any Conversion Amount (a “
Conversion Failure
”),
and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction
of a sale by the Holder of Common Shares issuable upon such conversion that the Holder anticipated receiving from the Company (a “
Buy-In
”),
5
then
the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other out of pocket
expenses, if any) for the Common Shares so purchased (the “
Buy-In Price
”), at which point the Company’s obligation
to deliver such certificate (and to issue such Common Shares) shall terminate, or (ii) promptly honor its obligation to deliver to the
Holder a certificate or certificates representing such Common Shares to which the Holder is entitled with respect to such Conversion
Notice and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of
Common Shares,
multiplied by
(B) the Closing Price on the Conversion Date.
(iii)
Book-Entry
.
Notwithstanding anything to the contrary set forth herein, upon conversion of any portion of this Debenture in accordance with the terms
hereof, the Holder shall not be required to physically surrender this Debenture to the Company unless (A) the full Conversion Amount represented
by this Debenture is being converted or (B) the Holder has provided the Company with prior written notice (which notice may be included
in a Conversion Notice) requesting reissuance of this Debenture upon physical surrender of this Debenture. The Holder and the Company
shall maintain records showing the Principal and Interest converted and the dates of such conversions or shall use such other method,
reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Debenture upon any conversion.
(c)
Limitations on Conversions.
(i)
Beneficial
Ownership
. The Holder shall not have the right to convert any portion of this Debenture to the extent that after giving effect to
such conversion, the Holder, together with any affiliate thereof, would beneficially own (as determined in accordance with Section 13(d)
of the Exchange Act and the rules promulgated thereunder) in excess of 4.99% of the number of Common Shares outstanding immediately after
giving effect to such conversion. Since the Holder will not be obligated to report to the Company the number of Common Shares it may hold
at the time of a conversion hereunder, unless the conversion at issue would result in the issuance of Common Shares in excess of 4.99%
of the then outstanding Common Shares without regard to any other shares which may be beneficially owned by the Holder or an affiliate
thereof, the Holder shall have the authority and obligation to determine whether the restriction contained in this Section will limit
any particular conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies,
the determination of which portion of the Principal amount of this Debenture is convertible shall be the responsibility and obligation
of the Holder. If the Holder has delivered a Conversion Notice for a Principal amount of this Debenture that, without regard to any other
shares that the Holder or its affiliates may beneficially own, would result in the issuance in excess of the permitted amount hereunder,
the Company shall notify the Holder of this fact and shall honor the conversion for the maximum Principal amount permitted to be converted
on such Conversion Date in accordance with Section (3)(a) and, any Principal amount tendered for conversion in excess of the permitted
amount hereunder shall remain outstanding under this Debenture. The provisions of this Section may be waived by a Holder (but only as
to itself and not to any other Holder) upon not less than 65 days prior notice to the Company. Other Holders shall be unaffected by any
such waiver.
(ii)
Principal
Market Limitation
. Notwithstanding anything in this Debenture to the contrary, the Company shall not issue any Common Shares upon
conversion of this Debenture, or otherwise, if the issuance of such Common Shares, together with any Common Shares issued in connection
with any other related transactions that may be considered part of the same series of transactions, would exceed the aggregate number
Common Shares that the Company may issue in a transaction in compliance with the Company’s obligations under the rules or regulations
of The Nasdaq Stock Market LLC (“
Nasdaq
”) and shall be referred to as the “
Exchange Cap,
” except
that such limitation shall not apply if the Company’s stockholders have approved such issuances on such terms in excess of the Exchange
Cap in accordance with the rules and regulations of Nasdaq.
(d)
Other Provisions.
(i)
All
calculations under this Section (3) shall be rounded to the nearest $0.0001 or whole share.
6
(ii)
So
long as this Debenture remains outstanding, the Company shall have reserved from its duly authorized share capital, and shall have instructed
the Transfer Agent to irrevocably reserve, the maximum number of Common Shares issuable upon conversion of this Debenture (assuming for
purposes hereof that (x) this Debenture is convertible at the Floor Price as of the date of determination, and (y) any such conversion
shall not take into account any limitations on the conversion of the Debenture set forth herein (the “
Required Reserve Amount
”)),
provided that at no time shall the number of Common Shares reserved pursuant to this Section (3)(d)(ii) be reduced other than pursuant
to the conversion of this Debenture in accordance with their terms, and/or cancellation, or reverse stock split. If at any time while
this Debenture remains outstanding, the Company does not have a sufficient number of authorized and unreserved Common Shares to satisfy
the obligation to reserve for the issuance the Required Reserve Amount, the Company will promptly take all corporate action necessary
to propose to a meeting of its shareholders an increase of its authorized share capital necessary to meet the Company’s obligations
pursuant to this Debenture, and cause its board of directors to recommend to the shareholders that they approve such proposal.
(iii)
Nothing
herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section (2) herein for the
Company’s failure to deliver certificates representing Common Shares upon conversion within the period specified herein and such
Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief, in each case without the need to post a bond or provide other security. The exercise of any such
rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
(iv)
Legal
Opinions
. The Company is obligated to cause its legal counsel to deliver legal opinions to the Company’s transfer agent in connection
with any legend removal upon the expiration of any holding period or other requirement for which the Underlying Shares may bear legends
restricting the transfer thereof. To the extent a legal opinion is not provided (either timely or at all), then, in addition to being
an Event of Default hereunder, the Company agrees to reimburse the Holder for all reasonable costs incurred by the Holder in connection
with any legal opinions paid for by the Holder in connection with the sale or transfer of the Underlying Shares. The Holder shall notify
the Company of any such costs and expenses it incurs that are referred to in this section from time to time and all amounts owed hereunder
shall be paid by the Company with reasonable promptness.
(e)
Adjustment
of Conversion Price upon Subdivision or Combination of Common Shares
. If the Company, at any time while this Debenture is
outstanding, shall (i) pay a stock dividend or otherwise make a distribution or distributions on its shares of Common Shares or any
other equity or equity equivalent securities payable in Common Shares, (ii) subdivide outstanding Common Shares into a larger number
of shares, (iii) combine (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or
(iv) issue by
reclassification of Common Shares any shares of capital stock of the Company, then each of the Fixed Price and
the Floor Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury
shares, if any) outstanding before such event and of which the denominator shall be the number of Common Shares outstanding after
such event. Any adjustment made pursuant to this Section shall become effective, in the case of a dividend distribution, immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution or, in the case of a
subdivision, combination or re- classification, and shall become effective immediately after the effective date of such subdivision,
combination or re-classification.
(f)
Adjustment
of Conversion Price upon Issuance of Common Shares
. If the Company, at any time while this Debenture is outstanding, issues or sells
any Common Shares or Convertible Securities (other than shares issued or sold by the Company in connection with any Excluded Securities),
for a consideration per share (the “
New Issuance Price
”) less than a price equal to the Fixed Price in effect immediately
prior to such issue or sale (such price the “
Applicable Price
”) (the foregoing a “
Dilutive Issuance
”),
then immediately after such Dilutive Issuance the Fixed Price then in effect shall be reduced to an amount equal to the New Issuance Price.
For the purposes hereof, if the Company in any manner issues or sells any Convertible Securities (other than shares issued or sold by
the Company in connection with any Excluded Securities) and the lowest price per share for which one Common Share is issuable upon such
conversion or exchange or exercise thereof is less than the Applicable Price, then such Common Share shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per
share. No further adjustment of the Fixed Price shall be made upon the actual issuance of such Common Share upon conversion or exchange
or exercise of such Convertible Securities.
7
(g)
Other
Corporate Events
. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental
Transaction pursuant to which holders of Common Shares are entitled to receive securities or other assets with respect to or in exchange
for Common Shares (a “
Corporate Event
”), the Company shall make appropriate provision to ensure that the Holder will
thereafter have the right to receive upon a conversion of this Debenture, at the Holder’s option, (i) in addition to the Common
Shares receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect to such
Common Shares had such Common Shares been held by the Holder upon the consummation of such Corporate Event (without taking into account
any limitations or restrictions on the convertibility of this Debenture) or (ii) in lieu of the Common Shares otherwise receivable upon
such conversion, such securities or other assets received by the holders of Common Shares in connection with the consummation of such
Corporate Event in such amounts as the Holder would have been entitled to receive had this Debenture initially been issued with conversion
rights for the form of such consideration (as opposed to Common Shares) at a conversion rate for such consideration commensurate with
the conversion price of this Debenture. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory
to the Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be
applied without regard to any limitations on the conversion or redemption of this Debenture.
(h)
Whenever
the Fixed Price of this Debenture is adjusted, the Company shall promptly provide the Holder with a written notice setting forth the Fixed
Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
(i)
In
case of any (1) merger or consolidation of the Company or any Subsidiary of the Company with or into another Person, or (2) sale by the
Company or any Subsidiary of the Company of more than one-half of the assets of the Company in one or a series of related transactions,
a Holder shall have the right to (A) exercise any rights under Section (3)(g),
(B)
convert
the aggregate amount of this Debenture then outstanding into the shares of stock and other securities, cash and property receivable upon
or deemed to be held by holders of Common Shares following such merger, consolidation or sale, and such Holder shall be entitled upon
such event or series of related events to receive such amount of securities, cash and property as the Common Shares into which such aggregate
Principal amount of this Debenture could have been converted immediately prior to such merger, consolidation or sales would have been
entitled, or
(C)
in
the case of a merger or consolidation, require the surviving entity to issue to the Holder a convertible debenture with a Principal amount
equal to the aggregate Principal amount of this Debenture then held by such Holder, plus all accrued and unpaid Interest and other amounts
owing thereon, which such newly issued convertible debenture shall have terms identical (including with respect to conversion) to the
terms of this Debenture, and shall be entitled to all of the rights and privileges of the Holder of this Debenture set forth herein and
the agreements pursuant to which this Debenture was issued. In the case of clause (C), the conversion price applicable for the newly issued
shares of convertible preferred stock or convertible debentures shall be based upon the amount of securities, cash and property that each
Common Share would receive in such transaction and the conversion price in effect immediately prior to the effectiveness or closing date
for such transaction. The terms of any such merger, sale or consolidation shall include such terms so as to continue to give the Holder
the right to receive the securities, cash and property set forth in this Section upon any conversion or redemption following such event.
This provision shall similarly apply to successive such events.
(4)
REISSUANCE
OF THIS DEBENTURE.
(a)
Transfer
.
If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Debenture (in accordance with Section (4)(d)), registered in the name of the registered
transferee or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued and unpaid Interest
thereof) and, if less than the entire outstanding Principal is being transferred, a new Debenture (in accordance with Section (4)(d))
to the Holder representing the outstanding Principal not being transferred. The Holder and any assignee, by acceptance of this Debenture,
acknowledge and agree that, by reason of the provisions of Section (3)(b)(iii) following conversion or redemption of any portion of this
Debenture, the outstanding Principal represented by this Debenture may be less than the Principal stated on the face of this Debenture.
8
(b)
Lost,
Stolen or Mutilated Debenture
. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the Holder to the Company in customary form and substance and, in the case of mutilation, upon
surrender and
cancellation of this Debenture, the Company shall execute and deliver to the Holder a new Debenture (in accordance with Section
(4)(d)) representing the outstanding Principal.
(c)
Debenture
Exchangeable for Different Denominations
. This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Debenture or Debentures (in accordance with Section (4)(d)) representing in the aggregate the outstanding
Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as is designated by
the Holder at the time of such surrender.
(d)
Issuance
of New Debentures
. Whenever the Company is required to issue a new Debenture pursuant to the terms of this Debenture, such new Debenture
(i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture, the Principal remaining
outstanding (or in the case of a new Debenture being issued pursuant to Section (4)(a) or Section (4)(c), the Principal designated by
the Holder which, when added to the Principal represented by the other new Debentures issued in connection with such issuance, does not
exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance of new Debentures), (iii) shall have
an issuance date, as indicated on the face of such new Debenture, which is the same as the Issuance Date of this Debenture, (iv) shall
have the same rights and conditions as this Debenture, and (v) shall represent accrued and unpaid Interest from the Issuance Date.
(5)
NOTICES
.
Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing by
letter or electronic mail (“e-mail”) and will be deemed to have been delivered (i) upon receipt, when delivered personally,
(ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, as applicable or (iii) receipt,
when sent by e-mail, and, in each case of the foregoing clauses (i), (ii) and (iii), properly addressed to the party to receive the same.
The addresses and e-mail addresses for such communications shall be:
If to the Company, to:
VisionWave Holdings, Inc.
300 Delaware Ave., Suite 210 # 310
Wilmington, DE 19801
Attn: Doug Davis
Telephone:
Email: ddavis@vwav.inc.
with a copy (which shall not constitute notice) to:
Fleming PLLC
30 Wall Street, 8th Floor
New York, NY 10005
Attention: Stephen M. Fleming
Telephone: (516) 902-6567
Email: smf@flemingpllc.com
If to the Holder:
YA II PN, Ltd
c/o Yorkville Advisors Global, LLC
1012 Springfield
Avenue
Mountainside, NJ 07092
Attention: Mark Angelo
Telephone: 201-985-8300
Email: Legal@yorkvilleglobal.com
9
or at such other address and/or e-mail
address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party
in accordance with this Section at least three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt
(a) given by the recipient of such notice, consent, waiver or other communication, (b) electronically generated by the sender’s
email service provider containing the time, date, recipient email address or (c) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt from a nationally recognized overnight delivery service or receipt
by e-mail in accordance with clause (i), (ii) or (iii) above, respectively.
(6)
Except
as expressly provided herein, no provision of this Debenture shall alter or impair the obligations of the Company, which are absolute
and unconditional, to pay the Principal of, and Interest and other charges (if any) on, this Debenture at the time, place, and rate, and
in the currency, herein prescribed. This Debenture is a direct obligation of the Company. As long as this Debenture is outstanding, the
Company shall not and shall cause each of its subsidiaries not to, without the consent of the Holder, (i) amend its certificate of incorporation,
bylaws or other charter documents so as to adversely affect any rights of the Holder; (ii) repay, repurchase or offer to repay, repurchase
or otherwise acquire shares of its Common Shares or other equity securities (other than repurchases or deemed repurchases of Common Shares
from current or former employees, officers, directors or consultants upon termination of service, or in connection with tax withholding
or net or cashless exercise, in each case pursuant to an Approved Stock Plan); (iii) enter into any agreement with respect to any of the
foregoing; or (iv) enter into any agreement, arrangement or transaction in or of which the terms thereof would restrict, materially delay,
conflict with or impair the ability of the Company to perform its obligations under the this Debenture, including, without limitation,
the obligation of the Company to make cash payments hereunder.
(7)
This
Debenture shall not entitle the Holder to any of the rights of a stockholder of the Company, including without limitation, the right to
vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of stockholders or any other proceedings
of the Company, unless and to the extent converted into Common Shares in accordance with the terms hereof.
(8)
CHOICE
OF LAW; VENUE; WAIVER OF JURY TRIAL
(a)
Governing
Law
. This Debenture and the rights and obligations of the Parties hereunder shall, in all respects, be governed by, and construed
in accordance with, the laws (excluding the principles of conflict of laws) of the State of New York (the “
Governing
Jurisdiction
”)
(including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction,
validity and performance.
(b)
Jurisdiction;
Venue; Service.
(i)
The
Company hereby irrevocably consents to the non- exclusive personal jurisdiction of the state courts of the Governing Jurisdiction and,
if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Governing
Jurisdiction.
(ii)
The
Company agrees that venue shall be proper in any court of the Governing Jurisdiction selected by the Holder or, if a basis for federal
jurisdiction exists, in any United States District Court in the Governing Jurisdiction selected by the Holder. The Company waives any
right to object to the maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or
equity, whether in contract or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis
of improper venue or inconvenience of forum.
(iii)
Any
suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise,
brought by the Company against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any
other Transaction Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company
shall not file any counterclaim against the Holder in any suit, claim,
10
action, litigation or proceeding brought by the Holder against
the Company in a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Holder brought such
suit, claim, action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless
filed as a counterclaim in the suit, claim, action, litigation or proceeding instituted by the Holder against the Company. The Company
agrees that any forum outside the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding
brought by the Company against the Holder in any court outside the Governing Jurisdiction should be dismissed or transferred to a court
located in the Governing Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence
any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort
or otherwise, against the Holder arising out of or based upon this Debenture or any matter relating to this Debenture, or any other Transaction
Document, or any contemplated transaction, in any forum other than the courts of the State of New York sitting in New York County, and
the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties
hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit,
claim, action, litigation or proceeding may be heard and determined in such New York State Court or, to the fullest extent permitted by
applicable law, in such federal court. The Company and the Holder agree that a final judgment in any such suit, claim, action, litigation
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law.
(iv)
The
Company and the Holder irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim,
action, litigation or proceeding by e-mail or the mailing of copies thereof by registered or certified mail postage prepaid, to it at
the e-mail address or physical address, as applicable, provided for notices in this Debenture, such service to become effective thirty
(30) days after the date of such e-mail or mailing, as applicable. The Company and the Holder each irrevocably waive any defense it may
have on the grounds of insufficient or improper service with respect to service of process effected in accordance with this Section (8)(b)(iv).
(v)
Nothing
herein shall affect the right of the Holder to serve process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c)
THE
PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS DEBENTURE OR ANY MATTER
RELATING TO THIS DEBENTURE, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A
WAIVER OF A LEGAL RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR
RESPECTIVE CHOICE. THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
(d)
The
Company expressly acknowledges and agrees that this Debenture constitutes an instrument for the payment of money only within the meaning
of section 3213 of the New York Civil Practice Law and Rules (“
CPLR §3213
”), and that upon any default under or
breach of the terms of this Debenture, the Holder may immediately commence an action by motion for summary judgment in lieu of complaint
without any further notice or demand. The Company irrevocably waives (i) any right to require the Holder to commence any action by summons
and complaint, (ii) any right to assert defenses, setoffs, counterclaims or delays in any CPLR §3213 proceeding (other than the defense
of full payment of any amount that the Holder seeks to recover), and (iii) any right to object to the sufficiency of this Debenture as
an instrument for the payment of money only within the meaning of CPLR §3213 and agrees not to assert that this Debenture is not
such an instrument. The Company agrees that all amounts due under this Debenture shall be deemed liquidated, unconditional and immediately
due and payable for purposes of CPLR §3213.
(9)
If
the Company fails to strictly comply with the terms of this Debenture, then the Company shall reimburse the Holder promptly for all fees,
costs and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action in connection
with this Debenture, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in connection with
the rendering of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any sums which become due to
the Holder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation
or enforcement of any rights or remedies of the Holder.
11
(10)
Any
waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this Debenture. The failure of the Holder to insist upon strict adherence
to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of this Debenture. No provision of this Debenture may be waived or amended
other than by a written agreement signed by the parties to this Debenture. No custom or practice of the parties at variance with the terms
hereof shall constitute a waiver by any party of its right to exercise any right, power or remedy available to it hereunder or any other
right, power or remedy or to demand strict compliance with the terms of this Debenture.
(11)
If
any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.
If it shall be found that any Interest or other amount deemed Interest due hereunder shall violate applicable laws governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of Interest. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the Principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this Debenture, and the Company (to the extent it may lawfully do so)
hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such power
as though no such law has been enacted.
(12)
CERTAIN
DEFINITIONS.
For purposes of this Debenture, the following terms shall have the following meanings:
(a)
“
Applicable
Price
” shall have the meaning set forth in Section (3)(f).
(b)
“
Approved
Stock Plan
” means any employee benefit plan or share incentive plan which has been approved by the Board of Directors of the
Company, pursuant to which the Company’s securities may be issued to any employee, officer or director for services provided to
the Company.
(c)
“
Bloomberg
”
means Bloomberg Financial Markets (or if not available, a similar service provider of national recognized standing).
(d)
“
Business
Day
” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day
on which banking institutions in the State of New York are authorized or required by law or other government action to close.
(e)
“
Buy-In
”
shall have the meaning set forth in Section (3)(b)(ii).
(f)
“
Buy-In
Price
” shall have the meaning set forth in Section (3)(b)(ii).
(g)
“
Change
of Control Transaction
” means the occurrence of (a) an acquisition after the date hereof by an individual or legal entity or
“group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal
or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of fifty percent (50%) of the voting power
of the Company (except that the acquisition of voting securities by the Holder or any other current holder of convertible securities of
the Company shall not constitute a Change of Control Transaction for purposes hereof), (b) a replacement at one time or over time of more
than one-half of the members of the board of directors of the Company (other than as due to the death or disability of a member of the
board of directors) which is not approved by a majority of those individuals who are members of the board of directors on the date hereof
(or by those individuals who are serving as members of the board of directors on any date whose nomination to the board of directors was
approved by a majority of the members of the board of directors who are members on the date hereof), (c) the merger, consolidation or
sale of fifty percent (50%) or more of the assets of the Company or any Subsidiary of the Company in one or a series of related transactions
with or into another entity, or (d) the execution by the Company of an agreement to which the Company is a party or by which it is bound,
providing for any of the events set forth above in (a), (b) or (c). No transfer to a wholly-owned Subsidiary shall be deemed a Change
of Control Transaction under this provision.
12
(h)
“
Closing
Price
” means the price per share in the last reported trade of the Common Shares on a Principal Market or on the exchange which
the Common Shares is then listed as quoted by Bloomberg.
(i)
“
Commission
”
means the Securities and Exchange Commission.
(j)
“
Common
Shares
” means the shares of common stock, par value
$0.01, of the Company and stock of any other class into which such
shares may hereafter be changed or reclassified.
(k)
“
Conversion
Amount
” means the portion of the Principal, Interest, or other amounts outstanding under this Debenture to be converted, redeemed
or otherwise with respect to which this determination is being made.
(l)
“
Conversion
Date
” shall have the meaning set forth in Section
(3)(b)(i).
(m)
“
Conversion Failure
” shall have the meaning set forth in Section
(3)(b)(ii).
(n)
“
Conversion Notice
” shall have the meaning set forth in Section
(3)(b)(i).
(o)
“
Convertible Securities
” means any stock or securities (other than
Options) directly or indirectly convertible into or exercisable
or exchangeable for Common Shares.
(p)
“
Dilutive
Issuance
” shall have the meaning set forth in Section
(3)(f).
(q)
“
Exchange Act
” means the Securities Exchange Act
of 1934, as
amended.
(r)
“
Excluded Securities
” means any Common Shares issued or
issuable or deemed to be issued by the
Company: (i) under any Approved Stock Plan, (ii) upon conversion of any of the Debentures issued pursuant to the Securities Purchase Agreement
(including the Debentures and Other Debentures and the Common Shares issued in connection with this Debenture and any of the Other Debentures
and the Warrants and the Common Shares in connection with the exercise of the Warrants); (iii) upon conversion, exercise or exchange of
any Options or Convertible Securities which are outstanding on the day immediately preceding the date of the Securities Purchase Agreement;
provided, that such issuance of Common Shares upon exercise of such Options or Convertible Securities is made pursuant to the terms of
such Options or Convertible Securities in effect on such date and such Options or Convertible Securities are not amended, modified or
changed on or after such date, (iv) upon a stock split, reverse stock split, distribution of bonus shares, combination or other recapitalization
events, (v) pursuant to or in connection with the SEPA, or (vi) as all or part of the consideration in, or otherwise in connection with,
any acquisition by the Company or any Subsidiary of assets, property, technology, intellectual property, a business, a division or product
line, or equity interests of another Person, or any merger, consolidation, share exchange, license, joint venture, partnership or similar
strategic transaction, in each case approved by the Board of Directors of the Company and not undertaken primarily for the purpose of
raising capital, or (vii) upon exercise of the Warrant to Purchase Common Shares dated February 26, 2026 issued by the Company to the
Holder and designated as Warrant No. VWAV-1 (the “February Warrant”), or in connection with any amendment, replacement, reissuance
or repricing of the February Warrant, including the reduction of the exercise price thereunder to $1.50 per Common Share pursuant to the
letter agreement between the Company and the Holder dated as of September 10, 2026.
13
(s)
“
Fixed
Price
” means $5.00 per Common Share.
(t)
“
Floor
Price
” solely with respect to the Variable Price, shall mean
$0.702 per Common Share.
(u)
“
Fundamental
Transaction
”
means any of the following: (1) the Company effects any merger or consolidation of the Company with or into
another Person and the Company is the non-surviving company (other than a merger or consolidation with a wholly owned Subsidiary of the
Company for the purpose of redomiciling the Company), (2) the Company effects any sale of all or substantially all of its assets in one
or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Shares are permitted to tender or exchange their shares for other securities, cash or property, or (4) the
Company effects any reclassification of the Common Shares or any compulsory share exchange pursuant to which the Common Shares is effectively
converted into or exchanged for other securities, cash or property.
(v)
“
Installment
Amount
” shall have the meaning set forth in Section
(1)(c).
(w)
“
Installment
Date
” shall have the meaning set forth in Section (1)(c).
(x)
“
Installment
Principal Amount
” shall have the meaning set forth in
Section (1)(c).
(y)
“
New
Issuance Price
” shall have the meaning set forth in Section
(3)(f)
(z)
“
Optional
Redemption
” shall have the meaning set forth in Section
(1)(d).
(aa) “
Options
” means any rights, warrants or options
to subscribe for or
purchase Common Shares or Convertible Securities.
(bb) “
Other
Debentures
” means any other debentures issued pursuant to the Securities Purchase Agreement and any other debentures, notes,
or other instruments issued in exchange, replacement, or modification of the foregoing.
(cc) “
Payment Premium
” means 2% of
the Principal amount being paid.
(dd) “
Periodic Reports
” shall mean all of the Company’s reports required
to be filed by the Company with the Commission under applicable
laws and regulations (including,
without limitation, Regulation S-K), including
annual reports (on Form 10-K), quarterly reports (on Form 10-Q), and current reports (on Form 8-K), for so long as any amounts are outstanding
under this Debenture;
provided
that all such Periodic Reports shall include, when filed, all information, financial statements,
audit reports (when applicable) and other information required to be included in such Periodic Reports in compliance with all applicable
laws and regulations.
(ee) “
Person
”
means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof
or a governmental agency.
14
(ff) “
Principal
Market
” means the Nasdaq Global Market; provided however, that in the event the Company’s Common Shares are ever listed
or traded on any of the New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, or the Nasdaq Global Select Market, or
such successor thereto, the “Principal Market” shall mean that market on which the Common Shares are then listed or traded
(gg) “
Redemption Amount
” shall have the
meaning set forth in Section
(1)(d).
(hh) “
Redemption Notice
” shall have the meaning
set forth in Section
(1)(d).
(ii) “
Redemption Premium
” means 5% of
the Principal amount being paid.
(jj) “
Registration Rights Agreement
” has
the meaning given such term in the Securities Purchase Agreement.
(kk) “
Registration
Statement
” means a registration statement meeting the requirements set forth in the Registration Rights Agreement, covering
among other things the resale of the Underlying Shares and naming the Holder as a “selling stockholder” thereunder.
(ll) “
Securities
Act
” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(mm) “
SEPA
”
means the Standby Equity Purchase Agreement, dated July 25, 2025 (as amended by Amendment No. 1 dated January 19, 2026, and as may be
further amended, restated, supplemented or otherwise modified from time to time), between the Company and the YA II PN, Ltd., as the Investor.
(nn) “
Share Delivery Date
” shall have the
meaning set forth in Section
(3)(b)(i).
(oo) “
Subsidiary
”
shall mean any Person in which the Company, directly
or indirectly, (x) owns a majority of
the outstanding capital stock or holds a majority of the equity or similar interest of such Person or (y) controls or operates all or
substantially all of the business, operations or administration of such Person, and the foregoing are collectively referred to herein
as “
Subsidiaries
.”
(pp) “
Trading
Day
” means a day on which the Common Shares are quoted or traded on a Principal Market on which the Common Shares are then quoted
or listed; provided, that in the event that the Common Shares are not listed or quoted, then Trading Day shall mean a Business Day.
(qq) “
Transaction
Document
” has the meaning given such term in the Securities Purchase Agreement.
(rr) “
Underlying
Shares
” means the Common Shares issuable upon conversion of this Debenture in accordance with the terms hereof.
(ss) “
Variable
Price
” mean 90% of the lowest daily VWAP during the 10 consecutive Trading Days immediately preceding the Conversion Date, but
which Variable Price shall not be lower than the Floor Price.
(tt) “
VWAP
”
shall mean for any Trading Day, the volume weighted average price of the Common Shares on the Principal Market, for such Trading Day as
reported by Bloomberg L.P. through its “HP” function.
[Signature Page Follows]
15
IN WITNESS WHEREOF
, the Company has caused
this Convertible Debenture to be duly executed by a duly authorized officer as of the date set forth above.
COMPANY:
VISIONWAVE
HOLDINGS, INC.
By:
Name: Douglas Davis
Title: Chief Executive Officer
COMPANY:
VISIONWAVE
HOLDINGS, INC.
By:
/s/ Douglas Davis
Name: Douglas Davis
Title: Chief Executive Officer
16
EXHIBIT
I
CONVERSION NOTICE
(To be executed by the Holder in order to Convert the Debenture)
TO: VISIONWAVE HOLDINGS, INC.
Via Email:
The undersigned hereby
irrevocably elects to convert a portion of the outstanding and unpaid Conversion Amount of Debenture No.
VWAV-5
into Common Shares
of
VISIONWAVE HOLDINGS, INC.
, according to the conditions stated therein, as of the Conversion Date written below.
Conversion Date:
Principal Amount to be Converted: Accrued Interest
to be Converted:
Total Conversion Amount to be converted: Fixed Price
or Variable Price (if applicable): Number of Common Shares to be issued:
Please issue the Common Shares in the following name
and deliver them to the following account: Issue to:
Broker DTC Participant Code: Account Number:
Authorized Signature: _______________________________________
Name: _______________________________________
Title: _______________________________________