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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): December 26, 2023
SPECTRAL AI, INC.
(Exact
Name of Registrant as Specified in Charter)
Delaware |
|
001-40058 |
|
85-3987148 |
(State
or Other Jurisdiction
of Incorporation) |
|
(Commission File Number) |
|
(I.R.S.
Employer
Identification Number) |
2515 McKinney Avenue, Suite 1000
Dallas,
Texas |
|
75201 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(972)
499-4934
(Registrant’s
telephone number, including area code)
Not
Applicable
(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, $0.0001 par value per share |
|
MDAI |
|
The Nasdaq Stock Market LLC |
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock, at an exercise price of $11.50 per share |
|
MDAIW |
|
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 (17 CFR §230.405)
or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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.
On December 26, 2023, Spectral
AI, Inc. (the “Company”) entered into a Common Stock Purchase Agreement (the “Purchase Agreement”)
and a related Registration Rights Agreement (the “Registration Rights Agreement”), each dated as of December 26, 2023,
with B. Riley Principal Capital II, LLC (“B. Riley Principal Capital II”). Upon the terms and subject to the satisfaction
of the conditions set forth in the Purchase Agreement, the Company will have the right, in its sole discretion, to sell to B. Riley Principal
Capital II up to $10,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock, par value $0.0001
per share (the “Common Stock”), subject to certain limitations contained in the Purchase Agreement, from time to time
during the term of the Purchase Agreement. Sales of Common Stock by the Company to B. Riley Principal Capital II pursuant to the Purchase
Agreement, and the timing of any such sales, are solely at the option of the Company, and the Company is under no obligation to sell any
securities to B. Riley Principal Capital II under the Purchase Agreement.
Upon the initial satisfaction
of each of the conditions to B. Riley Principal Capital II’s purchase obligation set forth in the Purchase Agreement (the initial
satisfaction of such conditions, the “Commencement”, and the date on which the Commencement occurs, the “Commencement
Date”), including that a registration statement registering under the Securities Act of 1933, as amended (the “Securities
Act”), the resale by B. Riley Principal Capital II of shares of Common Stock issued to it by the Company under the Purchase
Agreement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the
Registration Rights Agreement, is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC, the Company
will have the right, but not the obligation, from time to time at its sole discretion over a period of up to 24 months beginning on the
Commencement Date, to direct B. Riley Principal Capital II to purchase a specified number of shares of Common Stock, not to exceed certain
limitations as set forth in the Purchase Agreement (each, a “Purchase”), by timely delivering an irrevocable written
notice of such Purchase (each, a “Purchase Notice”) to B. Riley Principal Capital II prior to the commencement of trading
of the Common Stock on The Nasdaq Capital Market (“Nasdaq”) on any trading day (each, a “Purchase Date”),
so long as (i) the closing sale price of the Common Stock on Nasdaq on the trading day immediately prior to such Purchase Date is not
less than a specified threshold price set forth in the Purchase Agreement (the “Threshold Price”) and (ii) all shares
of Common Stock subject to all prior Purchases and all prior Intraday Purchases (defined below) effected by the Company under the Purchase
Agreement (as applicable) have been received by B. Riley Principal Capital II in the manner set forth in the Purchase Agreement prior
to the Company’s delivery of the applicable Purchase Notice to B. Riley Principal Capital II.
The
per share purchase price that B. Riley Principal Capital II is required to pay for shares of Common Stock in a Purchase effected by the
Company pursuant to the Purchase Agreement, if any, will be determined by reference to the volume weighted average price of the Common
Stock (“VWAP”), calculated in accordance with the Purchase Agreement, for the period (the “Purchase Valuation
Period”) beginning at the official open (or “commencement”) of the regular trading session on Nasdaq on the applicable
Purchase Date for such Purchase, and ending at the earliest to occur of (i) such time of official close of the regular trading session,
(ii) such time during such regular trading hour period, the trading volume threshold calculated in accordance with the Purchase Agreement
is reached, and (iii) if the Company further specifies in the applicable purchase notice for such Purchase that a “limit order
discontinue election” shall apply to such purchase, such time the trading price of the Common Stock on Nasdaq during such Purchase
Valuation Period falls below the applicable minimum price threshold determined in accordance with the Purchase Agreement, less a fixed
3.5% discount to the VWAP for such Purchase Valuation Period. The calculations of the VWAP and the volume of shares traded for purposes
of determining whether such volume threshold is reached will exclude the opening and closing trades in the Common Stock during regular
trading hours on the applicable Purchase Date, to the extent they occur during the applicable Purchase Valuation Period and if the Company
specifies a limit order discontinue election, any trades in the Common Stock during the applicable Purchase Valuation Period at a price
below the applicable minimum price threshold determined in accordance with the Purchase Agreement.
From and after the Commencement
Date, in addition to Purchases described above for which the applicable Purchase Valuation Periods begin at the official open of the Nasdaq
regular trading session on the applicable Purchase Dates therefor (each hereinafter referred to as a “Market Open Purchase”),
the Company will also have the right, but not the obligation (subject to the continued satisfaction of the purchase conditions contained
in the Purchase Agreement), to direct B. Riley Principal Capital II to purchase, on any trading day that would qualify as a Purchase Date
on which the Company may elect to effect a Market Open Purchase, whether or not a Market Open Purchase is effected on such trading day,
a specified number of shares of Common Stock, not to exceed certain limitations set forth in the Purchase Agreement similar to those applicable
to a Market Open Purchase (each, an “Intraday Purchase”), by timely delivering an irrevocable written notice of such
Intraday Purchase to B. Riley Principal Capital II after 10:00 a.m., New York City time (and after the Purchase Valuation Period
for any earlier Market Open Purchase and the Intraday Purchase Valuation Period (defined below) for the most recent prior Intraday Purchase
effected on the same Purchase Date, if applicable, have ended), and prior to 3:30 p.m., New York City time, on such Purchase Date
(each, an “Intraday Purchase Notice”), so long as (i) the closing sale price of the Common Stock on Nasdaq on the trading
day immediately prior to such Purchase Date is not less than the Threshold Price and (ii) all shares of Common Stock subject to all prior
Market Open Purchases and all prior Intraday Purchases effected by the Company under the Purchase Agreement (as applicable) have been
received by B. Riley Principal Capital II in the manner set forth in the Purchase Agreement prior to the Company’s delivery of the
applicable Intraday Purchase Notice to B. Riley Principal Capital II.
The per share purchase price
for the shares of Common Stock that the Company elects to sell to B. Riley Principal Capital II in an Intraday Purchase pursuant to the
Purchase Agreement, if any, will be calculated in the same manner as in the case of a Market Open Purchase (including the same fixed percentage
discounts to the applicable VWAP used to calculate the per share purchase price for a Market Open Purchase, as described above), provided
that the VWAP for each Intraday Purchase effected on a Purchase Date will be calculated over different Purchase Valuation Periods during
the regular trading session on Nasdaq on such Purchase Date, each of which will commence and end at different times on such Purchase Date
(the “Intraday Purchase Valuation Period”).
There is no upper limit on
the price per share that B. Riley Principal Capital II could be obligated to pay for the Common Stock the Company may elect to sell to
it in any Market Open Purchase or any Intraday Purchase under the Purchase Agreement. In the case of Market Open Purchases and Intraday
Purchases effected by the Company under the Purchase Agreement, if any, all share and dollar amounts used in determining the purchase
price per share of Common Stock to be purchased by B. Riley Principal Capital II in a Market Open Purchase or an Intraday Purchase (as
applicable), or in determining the applicable maximum purchase share amounts or applicable volume or price threshold amounts in connection
with any such Market Open Purchase or Intraday Purchase (as applicable), in each case, will be equitably adjusted as set forth in the
Purchase Agreement for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction
occurring during any period used to calculate such per share purchase price, maximum purchase share amounts or applicable volume or price
threshold amounts.
The
Company will control the timing and amount of any sales of Common Stock to B. Riley Principal Capital II that it may elect, in its sole
discretion, to effect from time to time from and after the Commencement Date and during the term of the Purchase Agreement. Actual sales
of shares of Common Stock to B. Riley Principal Capital II under the Purchase Agreement will depend on a variety of factors to be determined
by the Company from time to time, including, among other things, market conditions, the trading price of the Common Stock and determinations
by the Company as to the appropriate sources of funding for the Company and its operations.
Under the applicable Nasdaq rules, in no event may the Company issue
to B. Riley Principal Capital II under the Purchase Agreement more than 3,249,360 shares of Common Stock, which number of shares is equal
to 19.99% of the shares of Common Stock outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange
Cap”), unless (i) the Company obtains stockholder approval to issue shares of Common Stock in excess of the Exchange Cap in
accordance with applicable Nasdaq rules, or (ii) the average price per share paid by B. Riley Principal Capital II for all of the shares
of Common Stock that the Company directs B. Riley Principal Capital II to purchase from the Company pursuant to the Purchase Agreement,
if any, equals or exceeds $2.55 per share (representing the lower of (a) the official closing price of the Common Stock on Nasdaq immediately
preceding the execution of the Purchase Agreement and (b) the average official closing price of the Common Stock on Nasdaq for the five
consecutive trading days immediately preceding the execution of the Purchase Agreement, adjusted as required by Nasdaq) so that the Exchange
Cap limitation will not apply to issuances and sales of Common Stock pursuant to the Purchase Agreement). Moreover, the Company may not
issue or sell any shares of Common Stock to B. Riley Principal Capital II under the Purchase Agreement which, when aggregated with all
other shares of Common Stock then beneficially owned by B. Riley Principal Capital II and its affiliates (as calculated pursuant to Section
13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 13d-3 thereunder), would result
in B. Riley Principal Capital II beneficially owning more than 4.99% of the outstanding shares of Common Stock.
The
net proceeds from sales of Common Stock by the Company to B. Riley Principal Capital II under the Purchase Agreement, if any, will depend
on the frequency and prices at which the Company sells shares of Common Stock to B. Riley Principal Capital II under the Purchase Agreement.
To the extent the Company elects to sell shares of Common Stock to B. Riley Principal Capital II under the Purchase Agreement from and
after the Commencement Date, the Company currently plans to use any net proceeds therefrom for working capital and general corporate
purposes.
There are no restrictions
on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration
Rights Agreement, other than a prohibition (with certain limited exceptions) on entering into certain
types of “dilutive” equity transactions during the period beginning on the trading day immediately prior to the applicable
Purchase Date for a Market Open Purchase or Intraday Purchase (as applicable), and ending on the third trading day after the full settlement
thereof under the Purchase Agreement, and a prohibition on effecting or entering into an agreement to effect an “equity line
of credit,” “committed equity facility” “at the market offering” or other substantially similar continuous
offering with a third party (other than with the Investor or an Affiliate of the Investor), in which the Company may offer, issue or sell
Common Stock or any securities exercisable, exchangeable or convertible into Common Stock at a future determined price.
B. Riley Principal Capital
II has agreed that none of B. Riley Principal Capital II, its sole member, any of their respective officers, or any entity managed or
controlled by the Investor or its sole member will engage in or effect, directly or indirectly, for its own account or for the account
of any other of such persons or entities, any short sales of the Common Stock or hedging transaction that establishes a net short position
in the Common Stock during the term of the Purchase Agreement. Furthermore, B. Riley Principal Capital II covenants and agrees that, with
respect to each brokerage account in which shares of Common Stock beneficially owned by B. Riley Principal Capital II are held or to be
held, it shall provide written instructions to the applicable broker that it does not wish to participate in, and expressly opts out of,
any “fully paid lending program” or similar program with respect to such brokerage account so that shares of Common Stock
beneficially owned that are, or to be held in, such brokerage account will not be made available by the broker for lending to any third
person in connection with, to effect or otherwise to facilitate any short sale of Common Stock by any person.
The
Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification
obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for the purposes
of such agreements, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the
contracting parties.
The Purchase Agreement will automatically terminate on the earliest
to occur of (i) the first day of the month next following the 24-month anniversary of the Commencement Date, (ii) the date on which B.
Riley Principal Capital II shall have purchased from the Company under the Purchase Agreement shares of Common Stock for an aggregate
gross purchase price of $10,000,000, (iii) the date on which the Common Stock shall have failed to be listed or quoted on Nasdaq or another
U.S. national securities exchange identified as an “eligible market” in the Purchase Agreement, (iv) the 30th trading day
after the date on which a voluntary or involuntary bankruptcy proceeding involving the Company has been commenced that is not discharged
or dismissed prior to such trading day, and (v) the date on which a bankruptcy custodian is appointed for all or substantially all of
the Company’s property or the Company makes a general assignment for the benefit of its creditors. The Company has the right to
terminate the Purchase Agreement at any time after Commencement, at no cost or penalty to the Company, upon 10 trading days’ prior
written notice to B. Riley Principal Capital II. The Company and B. Riley Principal Capital II may also agree to terminate the Purchase
Agreement by mutual written consent, provided that no termination of the Purchase Agreement will be effective during the pendency of any
Market Open Purchase or any Intraday Purchase that has not then fully settled in accordance with the Purchase Agreement. Neither the Company
nor B. Riley Principal Capital II may assign or transfer their respective rights and obligations under the Purchase Agreement or the Registration
Rights Agreement, and no provision of the Purchase Agreement or the Registration Rights Agreement may be modified or waived by the Company
or B. Riley Principal Capital II.
As consideration for B. Riley
Principal Capital II’s commitment to purchase shares of Common Stock at the Company’s direction upon the terms and subject
to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, the Company (i) issued 40,000 shares
of Common stock to B. Riley Principal Capital II (the “Commitment Shares”), which Commitment Shares have a total aggregate
value equal to 1.00% of B. Riley Principal Capital II’s $10,000,000 total aggregate purchase commitment under the Purchase Agreement
(each Commitment Share valued at $2.50 per share, representing the official closing price of the Common Stock on Nasdaq immediately preceding
the execution of the Purchase Agreement) and (ii) agreed to pay $75,000 in cash (the “Cash Commitment Fee”) to B. Riley
Principal Capital II upon the settlement of the first purchase (whether such first purchase is a Market Open Purchase or Intraday Purchase),
if any, that the Company directs B. Riley Principal Capital II to make under the Purchase Agreement. If the Company does not direct B.
Riley Principal Capital II to make any Market Open Purchase or Intraday Purchase under the Purchase Agreement, or if the Commencement
does not occur, then the Company has agreed to pay the $75,000 Cash Commitment Fee to B. Riley Principal Capital II within three trading
days following the termination of the Purchase Agreement in accordance with its terms. Under the terms of the Purchase Agreement, in certain
circumstances set forth in the Purchase Agreement, the Company may be required to pay B. Riley Principal Capital II up to $100,000, in
cash, as a “make-whole” payment to the extent the aggregate amount of cash proceeds, if any, received by B. Riley Principal
Capital II from their resale of the Commitment Shares that they received from the Company upon execution of the Purchase Agreement, prior
to certain times set forth in the Purchase Agreement, is less than $100,000, in exchange for B. Riley Principal Capital II returning to
the Company for cancelation all of the Commitment Shares they received upon execution of the Purchase Agreement and have not resold prior
to such specified times set forth in the Purchase Agreement. The Company is not required to pay any cash “make-whole” payment
to B. Riley Principal Capital II under the Purchase Agreement if the aggregate net proceeds received by B. Riley Principal Capital II
from the resale of all or any portion of the Commitment Shares issued to B. Riley Principal Capital II upon execution of the Purchase
Agreement equals or exceeds $100,000, at or prior to certain times set forth in the Purchase Agreement.
In
addition, we have agreed to reimburse B. Riley Principal Capital II for the reasonable legal fees and disbursements of B. Riley Principal
Capital II’s legal counsel in an amount not to exceed (i) $75,000 upon our execution of the Purchase Agreement and Registration
Rights Agreement and (ii) $5,000 per fiscal quarter, in each case in connection with the transactions contemplated by the Purchase Agreement
and the Registration Rights Agreement.
Under the Purchase Agreement,
if a “qualified independent underwriter” (“QIU”) is required to participate in the transactions contemplated
by the Purchase Agreement and the Registration Rights Agreement in order for such transactions to be in full compliance with the applicable
rules and regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”), including FINRA Rule 5121, the
Company has agreed to pay up to $55,000 of the fees and expenses of such QIU upon the filing of the initial resale registration statement
with the SEC pursuant to the Registration Rights Agreement. B. Riley Principal Capital II has agreed to reimburse the Company (or cause
one of its affiliates to reimburse the Company), on the Commencement Date, for all of the fees and expenses of such QIU paid by the Company
to such QIU prior to the Commencement Date.
The
foregoing descriptions of the Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to
the full text of such agreements, copies of which are attached hereto as Exhibit 10.1 and 10.2, respectively, and each of which is incorporated
herein in its entirety by reference.
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 by reference into this Item 3.02 in its entirety.
The securities that have been or may be issued under the Purchase Agreement are being offered and sold by the Company in a transaction
exempt from registration under the Securities Act, in reliance on Section 4(a)(2) thereof. B. Riley Principal Capital II represented
to the Company in the Purchase Agreement that it is an “accredited investor,” as defined in Regulation D, and is acquiring
the securities under the Purchase Agreement for its own account, for investment purposes and not with a view towards, or for resale in
connection with, the public distribution thereof in violation of the Securities Act or any applicable state securities or “Blue
Sky” laws. Accordingly, the offer and sale by the Company of the securities that have been or may be issued to B. Riley Principal
Capital II under the Purchase Agreement is not being registered under the Securities Act or any applicable state securities or “Blue
Sky” laws and, therefore, such securities may not be offered or sold in the United States absent registration or an exemption from
registration under the Securities Act and any applicable state securities or “Blue Sky” laws.
This
Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company,
nor shall there be any sale of any securities of the Company in any state or other jurisdiction in which such an offer, solicitation
or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
* |
Certain portions of this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(6) and 601(b)(10) promulgated
under the Exchange Act. The Registrant agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. |
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.
|
Spectral AI, Inc. |
|
|
|
Date: December 27, 2023 |
By: |
/s/ Wensheng Fan |
|
|
Wensheng Fan |
|
|
Chief Executive Officer |
Exhibit 10.1
CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT PURSUANT
TO ITEM 601(B)(10) OF REGULATION S-K, BECAUSE IT IS BOTH NOT MATERIAL AND THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
IN ADDITION, CERTAIN PERSONALLY IDENTIFIABLE INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT PURSUANT TO ITEM 601(A)(6) OF REGULATION S-K.
[***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
COMMON STOCK PURCHASE AGREEMENT
Dated as of December 26, 2023
by and between
SPECTRAL AI, INC.
and
B. RILEY PRINCIPAL CAPITAL II, LLC
Table
of Contents
|
Page |
|
|
Article I DEFINITIONS |
2 |
|
|
Article II PURCHASE AND SALE OF COMMON STOCK |
2 |
Section 2.1. |
Purchase and Sale of Stock |
2 |
Section 2.2. |
Closing Date; Settlement Dates |
2 |
Section 2.3. |
Initial Public Announcements and Required Filings |
2 |
|
|
|
Article III PURCHASE TERMS |
3 |
Section 3.1. |
VWAP Purchases |
3 |
Section 3.2. |
Intraday VWAP Purchases |
3 |
Section 3.3. |
Settlement |
4 |
Section 3.4. |
Compliance with Rules of Trading Market |
5 |
Section 3.5. |
Beneficial Ownership Limitation |
6 |
|
|
|
Article IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR |
6 |
Section 4.1. |
Organization and Standing of the Investor |
6 |
Section 4.2. |
Authorization and Power |
6 |
Section 4.3. |
No Conflicts |
7 |
Section 4.4. |
Investment Purpose |
7 |
Section 4.5. |
Accredited Investor Status |
7 |
Section 4.6. |
Reliance on Exemptions |
7 |
Section 4.7. |
Information |
8 |
Section 4.8. |
No Governmental Review |
8 |
Section 4.9. |
No General Solicitation |
8 |
Section 4.10. |
Not an Affiliate |
8 |
Section 4.11. |
No Prior Short Sales |
9 |
Section 4.12. |
Statutory Underwriter Status |
9 |
Section 4.13. |
Resales of Securities |
9 |
|
|
|
Article V REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY |
9 |
Section 5.1. |
Organization, Good Standing and Power |
9 |
Section 5.2. |
Authorization, Enforcement |
9 |
Section 5.3. |
Capitalization |
10 |
Section 5.4. |
Issuance of Securities |
10 |
Section 5.5. |
No Conflicts |
11 |
Section 5.6. |
Commission Documents, Financial Statements; Disclosure Controls and Procedures; Internal Controls Over Financial Reporting; Accountants |
11 |
Section 5.7. |
Subsidiaries |
13 |
Section 5.8. |
No Material Adverse Effect or Material Adverse Change |
13 |
Section 5.9. |
No Undisclosed Liabilities |
13 |
Section 5.10. |
No Material Defaults on Indebtedness |
13 |
Section 5.11. |
Solvency |
14 |
Section 5.12. |
Title to Real and Personal Property |
14 |
Section 5.13. |
Litigation |
14 |
Section 5.14. |
Compliance With Laws |
14 |
Section 5.15. |
Certain Fees |
15 |
Section 5.16. |
Disclosure |
15 |
Section 5.17. |
Material Permits |
15 |
Section 5.18. |
Environmental Matters |
16 |
Section 5.19. |
Intellectual Property Rights |
16 |
Section 5.20. |
Material Contracts |
17 |
Section 5.21. |
Transactions With Affiliates |
17 |
Section 5.22. |
Labor Relations |
17 |
Section 5.23. |
Use of Proceeds |
18 |
Section 5.24. |
Investment Company Act Status |
18 |
Section 5.25. |
Tax Matters |
18 |
Section 5.26. |
Insurance |
18 |
Section 5.27. |
Exemption from Registration |
18 |
Section 5.28. |
No General Solicitation or Advertising |
19 |
Section 5.29. |
No Integrated Offering |
19 |
Section 5.30. |
Dilutive Effect |
19 |
Section 5.31. |
Manipulation of Price |
19 |
Section 5.32. |
Securities Act |
19 |
Section 5.33. |
Listing and Maintenance Requirements; DTC Eligibility |
20 |
Section 5.34. |
Application of Takeover Protections |
20 |
Section 5.35. |
Foreign Corrupt Practices |
20 |
Section 5.36. |
Office of Foreign Assets Control |
21 |
Section 5.37. |
Money Laundering |
21 |
Section 5.38. |
ERISA |
21 |
Section 5.39. |
IT Systems |
22 |
Section 5.40. |
Privacy Laws |
22 |
Section 5.41. |
U.S. Real Property Holding Corporation |
23 |
Section 5.42. |
Margin Rules |
23 |
Section 5.43. |
Emerging Growth Company Status |
23 |
Section 5.44. |
Smaller Reporting Company Status |
23 |
Section 5.45. |
[Reserved] |
23 |
Section 5.46. |
[Reserved] |
23 |
Section 5.47. |
Regulatory Compliance |
23 |
Section 5.48. |
Broker/Dealer Relationships; FINRA Information |
25 |
Section 5.49. |
Acknowledgement Regarding Relationship with Investor and BRS |
26 |
Section 5.50. |
Acknowledgement Regarding Investor’s Affiliate Relationships |
26 |
|
|
|
Article VI ADDITIONAL COVENANTS |
27 |
Section 6.1. |
Securities Compliance |
27 |
Section 6.2. |
Reservation of Common Stock |
27 |
Section 6.3. |
Registration and Listing |
28 |
Section 6.4. |
Compliance with Laws |
28 |
Section 6.5. |
Keeping of Records and Books of Account; Due Diligence |
29 |
Section 6.6. |
No Frustration; No Dilutive Issuances; No Other Similar Transactions |
29 |
Section 6.7. |
Corporate Existence |
31 |
Section 6.8. |
Fundamental Transaction |
31 |
Section 6.9. |
Selling Restrictions |
31 |
Section 6.10. |
Effective Registration Statement |
32 |
Section 6.11. |
Blue Sky |
32 |
Section 6.12. |
Non-Public Information |
33 |
Section 6.13. |
Broker-Dealer |
33 |
Section 6.14. |
FINRA Filing |
33 |
Section 6.15. |
QIU |
34 |
Section 6.16. |
Disclosure Schedule |
34 |
Section 6.17. |
Delivery of Compliance Certificates, Bring-Down Negative Assurance Letters, Bring-Down CFO Certificates and Bring-Down Comfort Letters Upon Occurrence of Certain Events |
35 |
|
|
|
Article VII CONDITIONS TO CLOSING, COMMENCEMENT AND PURCHASES |
36 |
Section 7.1. |
Conditions Precedent to Closing |
36 |
Section 7.2. |
Conditions Precedent to Commencement |
37 |
Section 7.3. |
Conditions Precedent to Purchases after Commencement Date |
41 |
|
|
|
Article VIII TERMINATION |
46 |
Section 8.1. |
Automatic Termination |
46 |
Section 8.2. |
Other Termination |
46 |
Section 8.3. |
Effect of Termination |
47 |
|
|
|
Article IX INDEMNIFICATION |
48 |
Section 9.1. |
Indemnification of Investor |
48 |
Section 9.2. |
Indemnification Procedures |
49 |
|
|
|
Article X MISCELLANEOUS |
49 |
Section 10.1. |
Certain Fees and Expenses; Commitment Fee; Commencement Irrevocable Transfer Agent Instructions. |
49 |
Section 10.2. |
Specific Enforcement, Consent to Jurisdiction, Waiver of Jury Trial |
53 |
Section 10.3. |
Entire Agreement |
54 |
Section 10.4. |
Notices |
55 |
Section 10.5. |
Waivers |
56 |
Section 10.6. |
Amendments |
56 |
Section 10.7. |
Headings |
56 |
Section 10.8. |
Construction |
56 |
Section 10.9. |
Binding Effect |
56 |
Section 10.10. |
No Third Party Beneficiaries |
56 |
Section 10.11. |
Governing Law |
57 |
Section 10.12. |
Survival |
57 |
Section 10.13. |
Counterparts |
57 |
Section 10.14. |
Publicity |
57 |
Section 10.15. |
Severability |
57 |
Section 10.16. |
Further Assurances |
57 |
Annex I. Definitions
COMMON STOCK PURCHASE
AGREEMENT
This COMMON STOCK PURCHASE
AGREEMENT is made and entered into as of December 26, 2023 (this “Agreement”), by and between B. Riley Principal
Capital II, LLC, a Delaware limited liability company (the “Investor”), and Spectral AI, Inc., a Delaware corporation
(the “Company”).
RECiTALS
WHEREAS, the parties
desire that, upon the terms and subject to the conditions and limitations set forth herein, the Company may issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase from the Company, up to the lesser of (i) $10,000,000 in aggregate
gross purchase price of newly issued shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common
Stock”), and (ii) the Exchange Cap (to the extent applicable under Section 3.4);
WHEREAS, such sales
of Common Stock by the Company to the Investor will be made in reliance upon the provisions of Section 4(a)(2) of the Securities Act (“Section
4(a)(2)”), and upon such other exemption from the registration requirements of the Securities Act as may be available with
respect to any or all of the sales of Common Stock to the Investor to be made hereunder;
WHEREAS, the parties
hereto are concurrently entering into a Registration Rights Agreement in the form attached as Exhibit A hereto (the “Registration
Rights Agreement”), pursuant to which the Company shall register under the Securities Act the resale of the Registrable
Securities (as defined in the Registration Rights Agreement) by the Investor, upon the terms and subject to the conditions set forth therein;
WHEREAS, in consideration
for the Investor’s execution and delivery of this Agreement, the Company shall pay the Commitment Fee to the Investor in such manner,
at such time(s) and otherwise pursuant to and in accordance with Section 10.1(ii) and, in connection therewith, the Company is causing
its transfer agent to issue to the Investor the Commitment Shares concurrently with the execution and delivery of this Agreement by the
parties hereto on the date hereof, pursuant to and in accordance with Section 10.1(ii)(a), and the Company shall pay the Cash Commitment
Fee to the Investor in such manner, at such time and otherwise pursuant to and in accordance with Section 10.1(ii)(b); and
WHEREAS, the Company
acknowledges that the Investor is an Affiliate of the B. Riley group of entities, and its Affiliate, B. Riley Securities, Inc. (“BRS”),
is acting as the Investor’s representative in connection with the transactions contemplated by the Transaction Documents.
NOW, THEREFORE,
the parties hereto, intending to be legally bound, hereby agree as follows:
Article
I
DEFINITIONS
Capitalized terms used in
this Agreement shall have the meanings ascribed to such terms in Annex I hereto, and hereby made a part hereof, or as otherwise
set forth in this Agreement.
Article
II
PURCHASE AND SALE OF COMMON STOCK
Section 2.1. Purchase
and Sale of Stock. Upon the terms and subject to the conditions of this Agreement, during the Investment Period, the
Company, in its sole discretion, shall have the right, but not the obligation, to issue and sell to the Investor, and the Investor
shall purchase from the Company, up to the lesser of (i) $10,000,000 (the “Total Commitment”) in aggregate
gross purchase price of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock and (ii) the Exchange
Cap, to the extent applicable under Section 3.4 (such lesser amount of shares of Common Stock, the “Aggregate
Limit”), by the delivery to the Investor of VWAP Purchase Notices and Intraday VWAP Purchase Notices as provided in
Article III.
Section 2.2. Closing
Date; Settlement Dates. This Agreement shall become effective and binding (the “Closing”) upon (a)
the delivery of counterpart signature pages of this Agreement and the Registration Rights Agreement executed by each of the parties hereto
and thereto, and (b) the delivery of all other documents, instruments and writings required to be delivered at the Closing, in each case
as provided in Section 7.1(iv), to the offices of Duane Morris LLP, at 1540 Broadway, New York, NY 10036, at 3:45 p.m., New York City
time, on the Closing Date. In consideration of and in express reliance upon the representations, warranties and covenants contained in,
and upon the terms and subject to the conditions of, this Agreement, during the Investment Period, the Company, at its sole option and
discretion, may issue and sell to the Investor, and, if the Company elects to so issue and sell, the Investor shall purchase from the
Company, the Shares in respect of each VWAP Purchase and each Intraday VWAP Purchase (as applicable). The delivery of Shares in respect
of each VWAP Purchase and each Intraday VWAP Purchase, and the payment for such Shares, shall occur in accordance with Section 3.3.
Section 2.3. Initial
Public Announcements and Required Filings. The Company shall, not later than 9:00 a.m., New York City time, on the Trading
Day immediately after the date of this Agreement, file with the Commission a Current Report on Form 8-K disclosing the execution
of this Agreement and the Registration Rights Agreement by the Company and the Investor and describing the material terms thereof,
including, without limitation, the Commitment Fee payable by the Company to the Investor pursuant to Section 10.1(ii) of this
Agreement, and attaching as exhibits thereto copies of each of this Agreement and the Registration Rights Agreement and, if
applicable, any press release issued by the Company disclosing the execution of this Agreement and the Registration Rights Agreement
by the Company (including all exhibits thereto, the “Current Report”). The Company shall provide the
Investor a reasonable opportunity to comment on a draft of the Current Report prior to filing the Current Report with the Commission
and shall give due consideration to all such comments. From and after the filing of the Current Report with the Commission, the
Company shall have publicly disclosed all material, nonpublic information delivered to the Investor (or the Investor’s
representatives or agents) by the Company, or any of their respective officers, directors, employees, agents or representatives (if
any) in connection with the transactions contemplated by the Transaction Documents. The Investor covenants that until such time as
the transactions contemplated by this Agreement and the Registration Rights Agreement are publicly disclosed by the Company as
described in this Section 2.3, the Investor shall maintain the confidentiality of all disclosures made to it in connection with the
transactions contemplated by the Transaction Documents (including the existence and terms of the transactions contemplated thereby),
except that the Investor may disclose the terms of such transactions to its financial, accounting, legal and other advisors
(provided that the Investor directs such Persons to maintain the confidentiality of such information). The Company shall use its
commercially reasonable efforts to prepare and, as soon as practicable, but in no event later than the applicable Filing Deadline,
file with the Commission the Initial Registration Statement and any New Registration Statement covering only the resale by the
Investor of the Registrable Securities in accordance with the Securities Act and the Registration Rights Agreement. On or before the
second (2nd) Trading Day immediately following the Effective Date of the Initial Registration Statement and any New
Registration Statement (or any post-effective amendment thereto), the Company shall file with the Commission in accordance with Rule
424(b) under the Securities Act the final Prospectus to be used in connection with resales of the Registrable Securities by the
Investor pursuant to such Registration Statement (or post-effective amendment thereto).
Article
III
PURCHASE TERMS
Subject to the satisfaction
of the conditions set forth in Article VII, the parties agree as follows:
Section 3.1. VWAP
Purchases. Upon the initial satisfaction of all of the conditions set forth in Section 7.2 (the
“Commencement” and the date of initial satisfaction of all of such conditions, the
“Commencement Date”) and from time to time thereafter, subject to the satisfaction of all of the
conditions set forth in Section 7.3, the Company shall have the right, but not the obligation, to direct the Investor, by its timely
delivery to the Investor of a VWAP Purchase Notice for a VWAP Purchase (each, a “VWAP Purchase”),
specifying in such VWAP Purchase Notice (a) the VWAP Purchase Percentage for such VWAP Purchase and (b) whether a Limit Order
Continue Election or a Limit Order Discontinue Election shall apply to such VWAP Purchase, on the applicable Purchase Date therefor,
to purchase a specified VWAP Purchase Share Amount, which shall not exceed the applicable VWAP Purchase Maximum Amount, at the
applicable VWAP Purchase Price therefor on such Purchase Date in accordance with this Agreement. The Company may timely deliver to
the Investor a VWAP Purchase Notice for a VWAP Purchase on any Trading Day selected by the Company as the Purchase Date for such
VWAP Purchase, so long as (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding such Purchase Date
is not less than the Threshold Price, and (ii) all Shares subject to all prior VWAP Purchases and Intraday VWAP Purchases (as
applicable) pursuant to this Agreement have been received by the Investor as DWAC Shares prior to the Company’s delivery to
the Investor of such VWAP Purchase Notice for such VWAP Purchase on such Purchase Date. The Investor is obligated to accept each
VWAP Purchase Notice prepared and delivered by the Company in accordance with the terms of and subject to the satisfaction of the
conditions contained in this Agreement. If the Company delivers any VWAP Purchase Notice directing the Investor to purchase a VWAP
Purchase Share Amount in excess of the applicable VWAP Purchase Maximum Amount that the Company is then permitted to include in such
VWAP Purchase Notice (taking into account the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase
Notice for such VWAP Purchase), such VWAP Purchase Notice shall be void ab initio to the extent of the amount by which the
VWAP Purchase Share Amount set forth in such VWAP Purchase Notice exceeds such applicable VWAP Purchase Maximum Amount, and the
Investor shall have no obligation to purchase, and shall not purchase, such excess Shares pursuant to such VWAP Purchase Notice; provided, however,
that the Investor shall remain obligated to purchase the applicable VWAP Purchase Maximum Amount pursuant to such VWAP Purchase. At
or prior to 5:30 p.m., New York City time, on the Purchase Date for each VWAP Purchase, the Investor shall provide to the Company,
by email correspondence to each of the individual notice recipients of the Company set forth in the applicable VWAP Purchase Notice,
a written confirmation for such VWAP Purchase, setting forth the applicable VWAP Purchase Price per Share to be paid by the Investor
for the Shares purchased by the Investor in such VWAP Purchase, and the total aggregate VWAP Purchase Price to be paid by the
Investor for the total VWAP Purchase Share Amount purchased by the Investor in such VWAP Purchase. Notwithstanding the foregoing,
the Company shall not deliver any VWAP Purchase Notices to the Investor during the PEA Period, any Allowable Grace Period or any MPA
Period.
Section 3.2. Intraday
VWAP Purchases. Upon the initial satisfaction of all of the conditions set forth in Section 7.2 on the Commencement Date and
from time to time thereafter, subject to the satisfaction of all of the conditions set forth in Section 7.3, in addition to VWAP
Purchases as described in Section 3.1, the Company shall also have the right, but not the obligation, to direct the Investor, by its
timely delivery to the Investor of an Intraday VWAP Purchase Notice for an Intraday VWAP Purchase (each, an “Intraday
VWAP Purchase”), specifying in such Intraday VWAP Purchase Notice (a) the Intraday VWAP Purchase Percentage for such
Intraday VWAP Purchase and (b) whether a Limit Order Continue Election or a Limit Order Discontinue Election shall apply to such
Intraday VWAP Purchase, on the applicable Purchase Date therefor, to purchase a specified Intraday VWAP Purchase Share Amount, which
shall not exceed the applicable Intraday VWAP Purchase Maximum Amount, at the applicable Intraday VWAP Purchase Price therefor on
such Purchase Date in accordance with this Agreement. The Company may timely deliver to the Investor an Intraday VWAP Purchase
Notice for an Intraday VWAP Purchase on any Trading Day selected by the Company as the Purchase Date for such Intraday VWAP
Purchase, so long as (i) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding such Purchase Date is
not less than the Threshold Price, and (ii) all Shares subject to all prior VWAP Purchases and Intraday VWAP Purchases (as
applicable) have been received by the Investor as DWAC Shares prior to the Company’s delivery to the Investor of such Intraday
VWAP Purchase Notice for such Intraday VWAP Purchase on such Purchase Date. The Investor is obligated to accept each Intraday VWAP
Purchase Notice prepared and delivered by the Company in accordance with the terms of and subject to the satisfaction of the
conditions contained in this Agreement. If the Company delivers any Intraday VWAP Purchase Notice directing the Investor to purchase
an Intraday VWAP Purchase Share Amount in excess of the applicable Intraday VWAP Purchase Maximum Amount that the Company is then
permitted to include in such Intraday VWAP Purchase Notice (taking into account the Intraday VWAP Purchase Percentage specified by
the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase), such Intraday VWAP Purchase Notice
shall be void ab initio to the extent of the amount by which the Intraday VWAP Purchase Share Amount set forth in such
Intraday VWAP Purchase Notice exceeds such applicable Intraday VWAP Purchase Maximum Amount, and the Investor shall have no
obligation to purchase, and shall not purchase, such excess Shares pursuant to such Intraday VWAP Purchase Notice; provided, however,
that the Investor shall remain obligated to purchase the applicable Intraday VWAP Purchase Maximum Amount pursuant to such Intraday
VWAP Purchase. At or prior to 5:30 p.m., New York City time, on the Purchase Date on which one or more Intraday VWAP Purchases shall
have occurred, the Investor shall provide to the Company, by email correspondence to each of the individual notice recipients of the
Company set forth in the applicable Intraday VWAP Purchase Notice, a written confirmation for each such Intraday VWAP Purchase,
setting forth the applicable Intraday VWAP Purchase Price per Share to be paid by the Investor for the Shares purchased by the
Investor in such Intraday VWAP Purchase, and the total aggregate Intraday VWAP Purchase Price to be paid by the Investor for the
total Intraday VWAP Purchase Share Amount purchased by the Investor in such Intraday VWAP Purchase. Notwithstanding the foregoing,
the Company shall not deliver any Intraday VWAP Purchase Notices to the Investor during the PEA Period, any Allowable Grace Period
or any MPA Period.
Section 3.3. Settlement.
The Shares constituting the applicable VWAP Purchase Share Amount purchased by the Investor in each VWAP Purchase, and the Shares
constituting the applicable Intraday VWAP Purchase Share Amount purchased by the Investor in each Intraday VWAP Purchase (as
applicable), in each case shall be delivered to the Investor as DWAC Shares not later than 10:00 a.m., New York City time, on the
Trading Day immediately following the Purchase Date for such VWAP Purchase and for each such Intraday VWAP Purchase (as applicable)
(the “Purchase Share Delivery Date”). For (a) each VWAP Purchase, the Investor shall pay to the Company an
amount in cash equal to the product of (1) the total number of Shares purchased by the Investor in such VWAP Purchase and (2) the
applicable VWAP Purchase Price for such Shares, as full payment for such Shares purchased by the Investor in such VWAP Purchase, and
(b) each Intraday VWAP Purchase, the Investor shall pay to the Company an amount in cash equal to the product of (1) the total
number of Shares purchased by the Investor in such Intraday VWAP Purchase and (2) the applicable Intraday VWAP Purchase Price for
such Shares, as full payment for such Shares purchased by the Investor in such Intraday VWAP Purchase, in each case via wire
transfer of immediately available funds, not later than 5:00 p.m., New York City time, on the Trading Day immediately following the
applicable Purchase Share Delivery Date for such VWAP Purchase and for each such Intraday VWAP Purchase (as applicable), provided
the Investor shall have timely received, as DWAC Shares, all of such Shares purchased by the Investor in such VWAP Purchase and such
Intraday VWAP Purchase(s) (as applicable) on such Purchase Share Delivery Date in accordance with the first sentence of this Section
3.3, or, if any of such Shares are received by the Investor after 1:00 p.m., New York City time, then the Company’s receipt of
such funds in its designated account may occur on the Trading Day next following the Trading Day on which the Investor shall have
received all of such Shares as DWAC Shares, but not later than 5:00 p.m., New York City time, on such next Trading Day. The Company
and the Investor acknowledge and agree that the Investor shall withhold an amount in cash equal to the Cash Commitment Fee from the
total aggregate VWAP Purchase Price payable by the Investor to the Company in connection with the first VWAP Purchase effected by
the Company pursuant to this Agreement, or, if the Company effects an Intraday VWAP Purchase prior to the first VWAP Purchase
effected pursuant to this Agreement, then the Investor shall withhold an amount in cash equal to the Cash Commitment Fee from the
total aggregate Intraday VWAP Purchase Price payable by the Investor to the Company in connection with the first Intraday VWAP
Purchase effected by the Company pursuant to this Agreement, without duplication, as payment by the Company to the Investor of the
Cash Commitment Fee pursuant to and in accordance with Section 10.1(ii)(b), and upon
such withholding by the Investor of such cash amount equal to the Cash Commitment Fee from such total aggregate VWAP Purchase Price
or from such total aggregate Intraday VWAP Purchase Price, as applicable, payable by the Investor to the Company pursuant to this
Agreement, the Investor shall not withhold any additional cash amounts from the total aggregate purchase prices payable by the
Investor to the Company in connection with any VWAP Purchase or Intraday VWAP Purchase effected pursuant to this Agreement. For the
avoidance of doubt, (x) the Cash Commitment Fee shall be fully earned by the Investor as of the Closing Date and shall be
non-refundable when withheld by the Investor (or when paid by the Company to the Investor, as applicable) in accordance with this
Section 3.3 and Section 10.1(ii)(b), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are effected by
the Company or settled hereunder or any subsequent termination of this Agreement, and (y) in the event that the Commencement shall
not occur under this Agreement or, if the Commencement shall occur, in the event that no VWAP Purchase or Intraday VWAP Purchase is
effected pursuant to this Agreement prior to the termination of this Agreement pursuant to Article VIII, then, in either case, upon
the termination of this Agreement pursuant to Article VIII, the Company shall pay the Cash Commitment Fee to the Investor, by wire
transfer of immediately available funds to an account designated by the Investor, not later than 5:00 p.m., New York City time, on
the third (3rd) the Trading Day immediately following the date of termination of this Agreement pursuant to Article VIII.
If the Company or its transfer agent shall fail for any reason to deliver to the Investor, as DWAC Shares, any Shares purchased by
the Investor in a VWAP Purchase or an Intraday VWAP Purchase prior to 10:00 a.m., New York City time, on the Trading Day immediately
following the applicable Purchase Share Delivery Date for such VWAP Purchase and for each such Intraday VWAP Purchase (as
applicable), and if on or after such Trading Day the Investor purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Investor of such Shares that the Investor anticipated receiving from the
Company on such Purchase Share Delivery Date in respect of such VWAP Purchase or such Intraday VWAP Purchase (as applicable), then
the Company shall, within one (1) Trading Day after the Investor’s request, either (i) pay cash to the Investor in an amount
equal to the Investor’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Cover Price”), at which point the Company’s obligation to deliver such Shares as
DWAC Shares shall terminate, or (ii) promptly honor its obligation to deliver to the Investor such Shares as DWAC Shares and pay
cash to the Investor in an amount equal to the excess (if any) of the Cover Price over the total purchase price paid by the Investor
pursuant to this Agreement for all of the Shares purchased by the Investor in such VWAP Purchase or such Intraday VWAP Purchase (as
applicable). The Company shall not issue any fraction of a share of Common Stock to the Investor in connection with any VWAP
Purchase or Intraday VWAP Purchase effected pursuant to this Agreement. If the issuance would result in the issuance of a fraction
of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up or down to the nearest whole share.
All payments to be made by the Investor pursuant to this Agreement shall be made by wire transfer of immediately available funds to
such account as the Company may from time to time designate by written notice to the Investor in accordance with the provisions of
this Agreement.
Section 3.4. Compliance with Rules of Trading
Market.
(a) Exchange
Cap. Subject to Section 3.4(b), the Company shall not issue or sell any shares of Common Stock pursuant to this Agreement,
and the Investor shall not purchase or acquire any shares of Common Stock pursuant to this Agreement, to the extent that after
giving effect thereto, the aggregate number of shares of Common Stock that would be issued pursuant to this Agreement and the
transactions contemplated hereby (including the Commitment Shares) would exceed 3,249,360 shares of Common Stock (such number of
shares equal to approximately 19.99% of the aggregate number of shares of Common Stock issued
and outstanding immediately prior to the execution of this Agreement), which number of shares shall be reduced, on a
share-for-share basis, by the number of shares of Common Stock issued or issuable pursuant to any transaction or series of
transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of the Trading
Market (such maximum number of shares of Common Stock, the “Exchange Cap”), unless the Company’s
stockholders have approved the issuance of Common Stock pursuant to this Agreement in excess of the Exchange Cap in accordance with
the applicable rules of the Trading Market. For the avoidance of doubt, the Company may, but shall be under no obligation to,
request its stockholders to approve the issuance of Common Stock pursuant to this Agreement; provided, that if such
stockholder approval is not obtained, the Exchange Cap shall be applicable for all purposes of this Agreement and the transactions
contemplated hereby at all times during the term of this Agreement (except as set forth in Section 3.4(b)).
(b) At-Market
Transaction. Notwithstanding Section 3.4(a) above, the Exchange Cap shall not be applicable for any purposes of this
Agreement and the transactions contemplated hereby, solely to the extent that (and only for so long as) the Average Price shall
equal or exceed the Base Price (it being hereby acknowledged and agreed that the Exchange Cap shall be applicable for all purposes
of this Agreement and the transactions contemplated hereby at all other times during the term of this Agreement, unless the
stockholder approval referred to in Section 3.4(a) is obtained). The parties acknowledge and agree that the Minimum Price used to
determine the Base Price hereunder represents the lower of (i) the Nasdaq official closing price of the Common Stock on the Trading
Market (as reflected on Nasdaq.com) on the Trading Day immediately prior to the date of this Agreement and (ii) the average Nasdaq
official closing price of the Common Stock on the Trading Market (as reflected on Nasdaq.com) for the five (5) consecutive Trading
Days ending on the Trading Day immediately prior to the date of this Agreement.
(c) General.
The Company shall not issue or sell any shares of Common Stock pursuant to this Agreement if such issuance or sale would reasonably
be expected to result in (A) a violation of the Securities Act or (B) a breach of the rules of the Trading Market. The provisions of
this Section 3.4 shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 3.4 only if
necessary to ensure compliance with the Securities Act and the applicable rules of the Trading Market.
Section 3.5. Beneficial
Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue
or sell, and the Investor shall not purchase or acquire, any shares of Common Stock under this Agreement which, when
aggregated with all other shares of Common Stock then beneficially owned by the Investor and its Affiliates (as calculated pursuant
to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by
the Investor of more than 4.99% of the outstanding shares of Common Stock (the “Beneficial Ownership
Limitation”). Upon the written request of the Investor, the Company shall promptly (but not later than the next
business day on which the Company’s transfer agent is open for business) confirm orally or in writing to the Investor the
number of shares of Common Stock then outstanding. The Investor and the Company shall each cooperate in good faith in the
determinations required under this Section 3.5 and the application of this Section 3.5. The Investor’s written certification
to the Company of the applicability of the Beneficial Ownership Limitation, and the resulting effect thereof hereunder at any time,
shall be conclusive with respect to the applicability thereof and such result absent manifest error. The provisions of this Section
3.5 shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3.5 to the
extent necessary to properly give effect to the limitations contained in this Section 3.5.
Article
IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR
The Investor hereby makes
the following representations, warranties and covenants to the Company:
Section 4.1. Organization
and Standing of the Investor. The Investor is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.
Section 4.2. Authorization
and Power. The Investor has the requisite limited liability company power and authority to enter into and perform its
obligations under this Agreement and the Registration Rights Agreement and to purchase or acquire the Securities in accordance with
the terms hereof. The execution, delivery and performance by the Investor of this Agreement and the Registration Rights Agreement
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary limited
liability company action, and no further consent or authorization of the Investor, its officers or its sole member is required. Each
of this Agreement and the Registration Rights Agreement has been duly executed and delivered by the Investor and constitutes a valid
and binding obligation of the Investor enforceable against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation, conservatorship, receivership, or similar
laws relating to, or affecting generally the enforcement of, creditor’s rights and remedies or by other equitable principles
of general application (including any limitation of equitable remedies).
Section 4.3. No
Conflicts. The execution, delivery and performance by the Investor of this Agreement and the Registration Rights Agreement
and the consummation by the Investor of the transactions contemplated hereby and thereby do not and shall not (i) result in a
violation of such Investor’s certificate of formation, limited liability company agreement or other applicable organizational
instruments, (ii) conflict with, constitute a default (or an event which, with notice or lapse of time or both, would become a
default) under, or give rise to any rights of termination, amendment, acceleration or cancellation of, any material agreement,
mortgage, deed of trust, indenture, note, bond, license, lease agreement, instrument or obligation to which the Investor is a party
or is bound, (iii) create or impose any lien, charge or encumbrance on any property of the Investor under any agreement or any
commitment to which the Investor is party or under which the Investor is bound or under which any of its properties or assets are
bound, or (iv) result in a violation of any federal, state, local or foreign statute, rule, or regulation, or any Order of any
Governmental Entity applicable to the Investor or by which any of its properties or assets are bound or affected, except, in the
case of clauses (ii), (iii) and (iv), for such conflicts, defaults, terminations, amendments, acceleration, cancellations and
violations as would not, individually or in the aggregate, prohibit or otherwise interfere with, in any material respect, the
ability of the Investor to enter into and perform its obligations under this Agreement and the Registration Rights Agreement. The
Investor is not required under any applicable federal, state or local law, rule or regulation to obtain any consent, authorization
or Order of, or make any filing or registration with, any Governmental Entity in order for it to execute, deliver or perform any of
its obligations under this Agreement and the Registration Rights Agreement or to purchase or acquire the Securities in accordance
with the terms hereof, other than as may be required by FINRA; provided, however, that for purposes of the
representation made in this sentence, the Investor is assuming and relying upon the accuracy of the relevant representations and
warranties and the compliance with the relevant covenants and agreements of the Company in the Transaction Documents to which it is
a party.
Section 4.4. Investment
Purpose. The Investor is acquiring the Securities for its own account, for investment purposes and not with a view towards,
or for resale in connection with, the public sale or distribution thereof, in violation of the Securities Act or any applicable
state securities laws; provided, however, that by making the representations herein, the Investor does not agree, or
make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with, or pursuant to, a Registration Statement filed pursuant to the
Registration Rights Agreement or an applicable exemption under the Securities Act. The Investor does not presently have any
agreement or understanding, directly or indirectly, with any Person to sell or distribute any of the Securities. The Investor is
acquiring the Securities hereunder in the ordinary course of its business.
Section 4.5. Accredited
Investor Status. The Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D.
Section 4.6. Reliance
on Exemptions. The Investor understands that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Investor’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Investor set forth herein in order to determine the availability of such exemptions and the eligibility of
the Investor to acquire the Securities.
Section 4.7. Information. All
materials relating to the business, financial condition, management and operations of the Company and materials relating to the
offer and sale of the Securities which have been requested by the Investor have been furnished or otherwise made available to the
Investor or its advisors, including, without limitation, the Commission Documents. The Investor understands that its investment in
the Securities involves a high degree of risk. The Investor is able to bear the economic risk of an investment in the Securities and
has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of a
proposed investment in the Securities. The Investor and its advisors have been afforded the opportunity to ask questions of and
receive answers from representatives of the Company concerning the financial condition and business of the Company and other matters
relating to an investment in the Securities. Neither such inquiries nor any other due diligence investigations conducted by the
Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the
Company’s representations and warranties contained in this Agreement or in any other Transaction Document to which the Company
is a party or the Investor’s right to rely on any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated hereby (including, without limitation, the opinions of the
Company’s counsel delivered pursuant to Sections 7.1(iv), 7.2(xvi) and 7.3(x)). The Investor has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the
Securities. The Investor understands that it (and not the Company) shall be responsible for its own tax liabilities that may arise
as a result of this investment or the transactions contemplated by this Agreement.
Section 4.8. No
Governmental Review. The Investor understands that no United States federal or state agency or any other government or
Governmental Entity has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of an
investment in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
Section 4.9. No
General Solicitation. The Investor is not purchasing or acquiring the Securities as a result of any form of general
solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities.
Section 4.10. Not
an Affiliate. The Investor is not an officer, director or an Affiliate of the Company. As of the date of this Agreement, the
Investor does not beneficially own any shares of Common Stock or securities exercisable for or convertible into shares of Common
Stock, other than the Commitment Shares. During the Investment Period, the Investor will not acquire for its own account any shares
of Common Stock or securities exercisable for or convertible into shares of Common Stock, other than pursuant to this Agreement; provided, however,
that nothing in this Agreement shall prohibit or be deemed to prohibit the Investor from purchasing, in an open market transaction
or otherwise, shares of Common Stock necessary to make delivery by the Investor in satisfaction of a sale by the Investor of Shares
that the Investor anticipated receiving from the Company in connection with the settlement of a VWAP Purchase or an Intraday VWAP
Purchase (as applicable) if the Company or its transfer agent shall have failed for any reason (other than a failure of the Investor
or its Broker-Dealer to set up a DWAC and required instructions) to electronically transfer all of the Shares subject to such VWAP
Purchase or such Intraday VWAP Purchase (as applicable) to the Investor on the applicable Purchase Share Delivery Date by crediting
the Investor’s or its designated Broker-Dealer’s account at DTC through its DWAC delivery system in compliance with
Section 3.3 of this Agreement. For the avoidance of doubt, the foregoing restriction does not apply to any Affiliate of the
Investor, provided that any such purchases do not cause the Investor to violate any applicable Exchange Act requirement, including
Regulation M.
Section 4.11. No Prior
Short Sales. At no time prior to the date of this Agreement has the Investor, its sole member, any of their respective officers,
or any entity managed or controlled by the Investor or its sole member, engaged in or effected, in any manner whatsoever, directly or
indirectly, for its own account or for the account of any of its Affiliates, any (i) “short sale” (as such term is defined
in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position
with respect to the Common Stock.
Section 4.12. Statutory
Underwriter Status. The Investor acknowledges that it will be disclosed as an “underwriter” and a “selling
stockholder” in each Registration Statement and in any Prospectus contained therein to the extent required by applicable law
and to the extent the Prospectus is related to the resale of Registrable Securities.
Section 4.13. Resales
of Securities. The Investor represents, warrants and covenants that it will resell Securities purchased or acquired by the
Investor from the Company pursuant to this Agreement only pursuant to the Registration Statement in which the resale of such
Securities is registered under the Securities Act and the Prospectus contained therein, in a manner described under the caption
“Plan of Distribution” in such Registration Statement and Prospectus, and in a manner in compliance with all applicable
U.S. federal and applicable state securities laws, rules and regulations.
Article
V
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
Except as set forth in the
disclosure schedule delivered by the Company to the Investor, if any (which is hereby incorporated by reference in, and constitutes an
integral part of, this Agreement) (the “Disclosure Schedule”), the Company hereby makes the following representations,
warranties, acknowledgments, and covenants to the Investor:
Section 5.1.
Organization, Good Standing and Power. The Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and authority to own, lease or operate its assets and properties and
to conduct its business as now being conducted in all material respects. The Company is duly licensed or qualified to do business and
in good standing (or equivalent status as applicable) in each jurisdiction in which the assets owned or leased by it or the character
of its activities require it to be licensed or qualified or in good standing (or equivalent status as applicable), except where the failure
to be so licensed or qualified, individually or in the aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect.
Section 5.2. Authorization,
Enforcement. The Company has the requisite corporate power and authority to enter into and perform its obligations under
each of the Transaction Documents to which it is a party and to issue the Securities in accordance with the terms hereof and
thereof. Except for approvals of the Company’s Board of Directors or a committee thereof as may be required in connection with
any issuance and sale of Shares to the Investor hereunder (which approvals shall be obtained prior to the delivery of any VWAP
Purchase Notice and any Intraday VWAP Purchase Notice), the execution, delivery and performance by the Company of each of the
Transaction Documents to which it is a party and the consummation by it of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action, and no further consent or authorization of the Company, its
Board of Directors or its stockholders is required. Each of the Transaction Documents to which the Company is a party has been duly
executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation, conservatorship, receivership or similar laws relating to, or affecting generally the enforcement of,
creditor’s rights and remedies or by other equitable principles of general application (including any limitation of equitable
remedies).
Section 5.3. Capitalization. The
authorized capital stock of the Company and the shares thereof issued and outstanding were as set forth in the Commission Documents
as of the dates reflected therein. All of the outstanding shares of Common Stock have been duly authorized and validly issued, and
are fully paid and non-assessable. Except as set forth in the Commission Documents, this Agreement and the Registration Rights
Agreement, there are no agreements or arrangements under which the Company is obligated to register the sale of any securities under
the Securities Act. Except as set forth in the Commission Documents, no shares of Common Stock are entitled to preemptive rights and
there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Company is or
may become bound to issue additional shares of the capital stock of the Company or options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, any
shares of capital stock of the Company other than those issued or granted in the ordinary course of business pursuant to the
Company’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained in
agreements entered into by the Company to sell restricted securities or as set forth in the Commission Documents, the Company is not
a party to, and it has no Knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock of the
Company. Except as set forth in the Commission Documents, there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by this Agreement, the Registration Rights Agreement or any of the other Transaction Documents, or
the consummation of the transactions described herein or therein. The Company has filed with the Commission true and correct copies
of the Company’s Second Amended and Restated Certificate of Incorporation as in effect on the Closing Date (the
“Charter”), and the Company’s Amended and Restated Bylaws as in effect on the Closing Date (the
“Bylaws”).
Section 5.4. Issuance
of Securities. Payment of the Commitment Fee by the Company to the Investor in such manner, at such time(s) and otherwise
pursuant to and in accordance with Section 10.1(ii) of this Agreement, including the issuance of the Commitment Shares to the
Investor pursuant to and in accordance with Section 10.1(ii)(a) of this Agreement and the payment of the Cash Commitment Fee to the
Investor pursuant to and in accordance with Section 10.1(ii)(b) of this Agreement, and including the payment of any Cash Make-Whole
Payment to the Investor as may be required pursuant to and in accordance with Section 10.1(ii)(c) of this Agreement, in each case
have been, and the Total Commitment worth of Shares available for issuance by the Company to the Investor under this Agreement have
been, or with respect to the amount of Shares to be purchased by the Investor pursuant to a particular VWAP Purchase Notice or
pursuant to a particular Intraday VWAP Purchase Notice (as applicable) will be, prior to the delivery to the Investor hereunder of
such VWAP Purchase Notice and prior to the delivery to the Investor hereunder of such Intraday VWAP Purchase Notice (as applicable),
in each case duly authorized by all necessary corporate action on the part of the Company. The Commitment Shares, when issued to the
Investor in accordance with this Agreement, and the Shares, when issued and sold against payment therefor in accordance with this
Agreement, shall be validly issued and outstanding, fully paid and non-assessable and free from all liens, charges, taxes, security
interests, encumbrances, rights of first refusal, preemptive or similar rights and other encumbrances with respect to the issue
thereof, and the Investor shall be entitled to all rights accorded to a holder of Common Stock. An aggregate of 3,209,360 shares of
Common Stock have been duly authorized and reserved by the Company for issuance and sale to the Investor as Shares pursuant to VWAP
Purchases and Intraday VWAP Purchases under this Agreement.
Section 5.5. No
Conflicts. The execution, delivery and performance by the Company of each of the Transaction Documents to which it is a
party and the consummation by the Company of the transactions contemplated hereby and thereby do not and shall not (i) result in a
violation of any provision of the Company’s Charter or Bylaws, (ii) result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or
give rise to any rights of termination, amendment, acceleration or cancellation of, any material agreement, mortgage, deed of trust,
indenture, note, bond, license, lease agreement, instrument or obligation to which the Company is a party or is bound, (iii) create
or impose a lien, charge or encumbrance on any property or assets of the Company under any agreement or any commitment to which the
Company is a party or by which the Company is bound or to which any of its properties or assets is subject, or (iv) result in a
violation of any federal, state, local or foreign statute, rule, regulation or Order applicable to the Company or by which any
property or asset of the Company is bound or affected (including federal and state securities laws and regulations and the rules and
regulations of the Trading Market or applicable Eligible Market), except, in the case of clauses (ii), (iii) and (iv), for such
conflicts, defaults, terminations, amendments, acceleration, cancellations, liens, charges, encumbrances and violations as would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as specifically contemplated
by this Agreement or the Registration Rights Agreement and as required under the Securities Act and any applicable state securities
laws, the Company is not required under any federal, state, local or foreign law, rule or regulation to obtain any consent,
authorization or Order of, or make any filing or registration with, any Governmental Entity (including, without limitation, the
Trading Market) in order for it to execute, deliver or perform any of its obligations under the Transaction Documents to which it is
a party (except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect), or to
issue the Securities to the Investor in accordance with the terms hereof and thereof (other than such consents, authorizations,
Orders, filings or registrations as have been obtained or made prior to the Closing Date); provided, however, that,
for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the
representations and warranties of the Investor in this Agreement and the compliance by it with its covenants and agreements
contained in this Agreement and the Registration Rights Agreement.
Section 5.6. Commission
Documents, Financial Statements; Disclosure Controls and Procedures; Internal Controls Over Financial Reporting;
Accountants.
(a) Since September 11, 2023
(the “Business Combination Date”), the Company has timely filed (giving effect to permissible extensions in
accordance with Rule 12b-25 under the Exchange Act) all Commission Documents required to be filed with or furnished to the Commission
by the Company under the Securities Act or the Exchange Act, including those required to be filed with or furnished to the Commission
under Section 13(a) or Section 15(d) of the Exchange Act. As of its filing date (or, if amended or superseded by a filing prior to the
Closing Date, as of the date of such amended or superseded filing), each Commission Document filed with or furnished to the Commission
since the Business Combination Date and prior to the Closing Date complied in all material respects with the requirements of the Securities
Act or the Exchange Act, as applicable. Each Registration Statement, on the date it is filed with the Commission, on the date it is declared
effective by the Commission and on each Purchase Date, shall comply in all material respects with the requirements of the Securities
Act (including, without limitation, Rule 415 under the Securities Act) and shall not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, except
that this representation and warranty shall not apply to statements in or omissions from such Registration Statement made in reliance
upon and in conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor
expressly for use therein. The Prospectus and each Prospectus Supplement required to be filed pursuant to this Agreement or the Registration
Rights Agreement after the Closing Date, when taken together, on its date and on each Purchase Date, shall comply in all material respects
with the requirements of the Securities Act (including, without limitation, Rule 424(b) under the Securities Act) and shall not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading, except that this representation and
warranty shall not apply to statements in or omissions from the Prospectus or any Prospectus Supplement made in reliance upon and in
conformity with information relating to the Investor furnished to the Company in writing by or on behalf of the Investor expressly for
use therein. Each Commission Document (other than the Initial Registration Statement or any New Registration Statement, or the Prospectus
included therein or any Prospectus Supplement thereto) to be filed with or furnished to the Commission after the Closing Date and filed
as part of or incorporated by reference in the Initial Registration Statement or any New Registration Statement, or the Prospectus included
therein or any Prospectus Supplement thereto required to be filed pursuant to this Agreement or the Registration Rights Agreement (including,
without limitation, the Current Report), when such document is filed with or furnished to the Commission and, if applicable, when such
document becomes effective, as the case may be, shall comply in all material respects with the requirements of the Securities Act or
the Exchange Act, as applicable. The Company has delivered or made available to the Investor via EDGAR or otherwise true and complete
copies of all comment letters and substantive correspondence received by the Company from the Commission relating to the Commission Documents
filed with or furnished to the Commission as of the Closing Date, together with all written responses of the Company thereto in the form
such responses were filed via EDGAR. Except as disclosed in the Commission Documents, there are no outstanding or unresolved comments
or undertakings in such comment letters received by the Company from the Commission. The Commission has not issued any stop order or
other Order suspending the effectiveness of any registration statement filed by the Company under the Securities Act or the Exchange
Act.
(b) The financial
statements of the Company included or incorporated by reference in the Commission Documents filed with the Commission since the
Business Combination Date, together with the related notes and schedules, present fairly, in all material respects, the financial
position of the Company as of the dates indicated and the consolidated results of operations, cash flows and changes in
stockholders’ equity of the Company for the periods specified (subject, in the case of unaudited statements, to normal
year-end audit adjustments which will not be material, either individually or in the aggregate) and have been prepared in compliance
with the published requirements of the Securities Act and the Exchange Act, as applicable, and in conformity with generally accepted
accounting principles in the United States (“GAAP”) applied on a consistent basis (except (i) for such
adjustments to accounting standards and practices as are noted therein and (ii) in the case of unaudited interim statements, to the
extent they may exclude footnotes or may be condensed or summary statements) during the periods involved. The pro forma financial
statements or data included or incorporated by reference in the Commission Documents filed with the Commision since the Business
Combination Date, if any, comply in all material respects with the applicable requirements of Regulation S-X of the Securities Act,
including, without limitation, Article 11 thereof, and the assumptions used in the preparation of such pro forma financial
statements and data are reasonable, the pro forma adjustments used therein are appropriate to give effect to the circumstances
referred to therein and the pro forma adjustments have been properly applied to the historical amounts in the compilation of those
statements and data. The other financial and statistical data with respect to the Company contained or incorporated by reference in
the Commission Documents filed with the Commission since the Business Combination Date, if any, are accurately and fairly presented
in all material respects and prepared on a basis consistent with the financial statements and books and records of the Company.
There are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the
Commission Documents filed with the Commission since the Business Combination Date that are not included or incorporated by
reference as required. All disclosures contained or incorporated by reference in the Commission Documents filed with the Commission
since the Business Combination Date, if any, regarding “non-GAAP financial measures” (as such term is defined by the
rules and regulations of the Commission) comply in all material respects with Regulation G of the Exchange Act and Item 10 of
Regulation S-K under the Securities Act, to the extent applicable.
(c) Except as set forth in
the Commission Documents filed with the Commission since the Business Combination Date, the Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as set
forth in the Commission Documents filed with the Commission since the Business Combination Date, the Company is not aware of any
material weaknesses in its internal control over financial reporting. Except as set forth in the Commission Documents filed with the
Commission since the Business Combination Date, since the date of the latest audited financial statements of the Company included in
the Commission Documents filed with the Commission since the Business Combination Date, there has been no change in the
Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal control over financial reporting. Except as set forth in the Commission Documents filed with
the Commission since the Business Combination Date, the Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15 and 15d-15) that comply with the requirements of the Exchange Act. The Company has presented in its
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 the conclusions of the certifying officers about the
effectiveness of the disclosure controls and procedures based on their evaluations as of September 30, 2023 and, except as set forth
in the Company’s most recent Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 or any Commission
Document filed with the Commission for a period subsequent to September 30, 2023, the Company’s “disclosure controls and
procedures” are effective. Since September 30, 2023, there have been no internal investigations regarding accounting or
revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial
officer, the Company’s board of directors or any committee thereof.
(d)
KPMG LLP (the “Accountant”), whose report on the financial statements of the Company was filed with the
Commission as part of the Merger Form 8-K and is to be filed with the Commission as a part of the Initial Registration Statement, are
and, during the periods covered by their report, were independent public accountants within the meaning of the Securities Act and the
Public Company Accounting Oversight Board (United States). To the Company’s Knowledge, the Accountant is not in violation of the
auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) with respect
to the Company.
(e)
Since the Business Combination Date, the Company has timely filed all certifications and statements the Company is required to
file under (i) Rule 13a-14 or Rule 15d-14 under the Exchange Act or (ii) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley
Act) with respect to all Commission Documents with respect to which the Company is required to file such certifications and statements
thereunder.
Section 5.7. Subsidiaries.
Except as set forth on Schedule 5.7, Company does not have any Subsidiaries as of the Closing Date, nor does it own a controlling
interest in any entity. All Subsidiaries of the Company are duly organized and in good standing under the laws of the place of
organization or incorporation, and each Subsidiary is in good standing in each jurisdiction in which its ownership or lease of
property or the conduct of business requires such qualification, except where the failure to qualify would not have a Material
Adverse Effect.
Section 5.8. No
Material Adverse Effect or Material Adverse Change. Except as otherwise disclosed in any Commission Documents, and filed
with the Commission since the Business Combination Date: (i) the Company has not experienced or suffered any Material Adverse
Effect, and there exists no current state of facts, condition or event which would reasonably be expected to have a Material Adverse
Effect; (ii) the Company has conducted its business consistent with past practice in all material respects.
Section 5.9. No
Undisclosed Liabilities. The Company does not have any material liabilities or obligations, direct or contingent (including
any off-balance sheet obligations or any “variable interest entities” as that term is used in Accounting Standards
Codification Paragraph 810-10-25-20), not described in Commission Documents filed with the Commission since the Business Combination
Date, which are required to be described in such Commission Documents.
Section 5.10. No
Material Defaults on Indebtedness. Except as set forth in the Commission Documents, the
Company is not (i) in violation of its charter or bylaws or similar organizational documents or (ii) in
default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, promissory note,
or loan agreement or other instrument relating to Indebtedness to which the Company is a party or by which the Company is bound or
to which any of the property or assets of the Company is subject, except, in the case of clause (ii) above, for any such
default that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.11. Solvency.
The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy
Law, nor does the Company have any Knowledge that its creditors intend to initiate involuntary bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings for relief under any Bankruptcy Law. Except as set forth in the
Commission Documents, the Company is financially solvent and is generally able to pay its debts as they become due.
Section 5.12. Title
to Real and Personal Property. The Company has good and valid title to all items of
real property and good and valid title to all personal property described in the Commission Documents filed with the
Commission since the Business Combination Date as being owned by the Company that are material
to the business of the Company, in each case, free and clear of all liens, encumbrances and claims, except those that (i) do not
materially interfere with the use made and proposed to be made of such property by the Company, (ii) would reasonably be expected to
not, individually or in the aggregate, have a Material Adverse Effect or (iii) are disclosed in the Commission Documents
filed with the Commission since the Business Combination Date. Any real property described in
the Commission Documents filed with the Commission since the Business Combination Date as
being leased by the Company is held by the Company under valid, existing and enforceable leases, except those that (i) do not
materially interfere with the use made or proposed to be made of such property by the Company or the Subsidiaries or (ii) would not
be reasonably be expected, individually or in the aggregate, have a Material Adverse Effect.
Section 5.13. Litigation.
Except as disclosed in the Commission Documents, there is no Proceeding pending or, to the Company’s Knowledge, threatened in
writing against the Company that, if adversely decided or resolved, would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. Except as disclosed in the Commission Documents, neither the Company, nor any director or officer
of the Company, is or has been the subject of any Proceeding involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty, which would reasonably expected to result in a judgment, decree or order
having a Material Adverse Effect. Except as disclosed in the Commission Documents, there has not been, and to the Knowledge of the
Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former
director or officer of the Company, which would reasonably expected to result in a judgment, decree or order having a Material
Adverse Effect.
Section 5.14. Compliance
With Laws. Except as disclosed in the Commission Documents, the business of the Company has been and is presently being
conducted in compliance with all applicable Laws, except for such non-compliance which, individually or in the aggregate, would not
have a Material Adverse Effect. Except as disclosed in the Commission Documents, neither the Company nor any of its Subsidiaries is
in violation of any Order applicable to the Company, except in all cases for any such violations which could not, individually or in
the aggregate, have a Material Adverse Effect.
Section 5.15. Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Investor shall have no obligation with respect to any fees or with respect to any
claims made by or on behalf of other Persons for fees of a type contemplated in this Section 5.15 incurred by the Company that may
be due or payable in connection with the transactions contemplated by the Transaction Documents.
Section 5.16. Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided the Investor or any of its agents,
advisors or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic
information concerning the Company that has not been publicly disclosed by the Company in a Commission Document filed by the Company
with the Commission, other than the existence of the transactions contemplated by the Transaction Documents. The Company understands
and confirms that the Investor will rely on the foregoing representations in effecting resales of Securities under the Registration
Statement. All disclosure provided to Investor regarding the Company, its business and the transactions contemplated by the
Transaction Documents (including, without limitation, the representations and warranties of the Company contained in the Transaction
Documents to which it is a party (as modified by the Disclosure Schedule)) furnished in writing by or on behalf of the Company for
purposes of or in connection with the Transaction Documents, taken together, is true and correct in all material respects on the
date on which such information is dated or certified, and does not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were
made, not misleading at such time. Each press release issued by the Company since the Business Combination Date did not at the time
of release (or, if amended or superseded by a later dated press release issued by the Company prior to the Closing Date or by a
later dated Commission Document filed with or furnished to the Commission by the Company prior to the Closing Date, at the time of
issuance of such later dated press release or filing or furnishing of such Commission Document, as applicable) contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they are made, not misleading.
Section 5.17. Material
Permits. Except as disclosed in the Commission Documents, the Company has all Permits that are required to own, lease or
operate its properties and assets and to conduct its business as currently conducted, except for such Permits that are not,
individually or in the aggregate, material to the Company (the “Material Permits”). Except as disclosed in
the Commission Documents or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect, (i) each Material Permit is in full force and effect in accordance with its terms, (ii) no written notice of
revocation, cancellation or termination of any Material Permit has been received by the Company and (iii) there are, and have
been, no Proceedings pending or, to the Company’s Knowledge, threatened relating to the suspension, revocation or material and
adverse modification of any of such Material Permit. This Section 5.17 does not relate to environmental matters, such items being
the subject of Section 5.18.
Section 5.18. Environmental
Matters. Since the Business Combination Date, the Company and its subsidiaries (i) are in compliance with all federal,
state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered,
promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or
other approvals required of it under applicable Environmental Laws to conduct its business; and (iii) are in compliance with all
terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply
could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has not received any
written notice from any Governmental Entity or any third party alleging any material violation thereof or liability thereunder
(including, without limitation, liability for costs of investigating or remediating sites containing hazardous substances and/or
damages to natural resources). Except as disclosed in the Commission Documents, there has been no storage, generation,
transportation, use, handling, treatment, Release or threat of Release (as defined below) of Hazardous Materials by or caused by the
Company (or, to the knowledge of the Company, any other Person (including any predecessor of the Company) for whose acts or
omissions the Company is or could reasonably be expected to be liable) at, on, under or from any property or facility now or
previously owned, operated or leased by the Company, or at, on, under or from any other property or facility, in violation of any
Environmental Laws or in a manner or amount or to a location that would reasonably be expected to result in any liability under any
Environmental Law, except for any violation or liability which would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. “Release” means any spilling, leaking, seepage, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, or migrating in, into or
through the environment, or in, into from or through any building or structure.
Section 5.19. Intellectual
Property Rights. Except as disclosed in the Commission Documents, the Company or one of its the Subsidiaries has, or has
rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or required for use in
connection with its business as conducted by the Company and the Subsidiaries immediately prior to the Closing and which the failure
to so have would, individually or in the aggregate, reasonably expected to have a Material Adverse Effect (collectively, the
“Intellectual Property Rights”), provided that the foregoing shall not be interpreted as a representation
or warranty of non-infringement. Except as disclosed in the Commission Documents, none of, and the Company or any of its
Subsidiaries has not received any written notice that any of, the Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except
for such expiration, termination or abandonment that would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Except as disclosed in the Commission Documents, neither the Company nor any of its Subsidiaries has
received a written notice of a claim or otherwise has any Knowledge that the Intellectual Property Rights violate or infringe upon
the rights of any Person, except for such violation or infringement that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. To the Knowledge of the Company, except as disclosed in the Commission Documents, all
such Intellectual Property Rights that are owned or controlled by the Company are enforceable and there is no existing infringement
by another Person of any such Intellectual Property rights. Except as disclosed in the Commission Documents, the Company or any of
its Subsidiaries has taken reasonable security measures to protect the secrecy, confidentiality and value of all of its intellectual
properties, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section
5.20. Material Contracts. Except as set forth in the Commission Documents
filed with the Commission the Business Combination Date, the descriptions in such Commission Documents of the material Contracts
therein described present fairly in all material respects the information required to be shown, and there are no material Contracts of
a character required to be described in such Commission Documents or to be filed as exhibits thereto which are not described or filed
as required; all material Contracts between the Company and third parties expressly referenced in such Commission Documents are
legal, valid and binding obligations of the Company and, to the Knowledge of the Company, each other contracting party thereto, enforceable
in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general equitable principles, and except where
the failure of any such Contract to be enforceable in accordance with its terms would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
Section 5.21. Transactions
With Affiliates. Except as set forth in the Commission Documents, there are no loans, leases, agreements, contracts, royalty
agreements, management contracts, service arrangements or other continuing transactions exceeding $120,000 between (a) the Company,
on the one hand, and (b) any person or entity who would be covered by Item 404(a) of Regulation S-K, on the other hand, for the time
period as required under Item 404(a) thereof. Except as disclosed in the Commission Documents, there are no outstanding amounts
payable to or receivable from, or advances by the Company to, and the Company is not otherwise a creditor of or debtor to, any
beneficial owner of more than 5% of the outstanding shares of Common Stock, or any director, employee or affiliate of the Company,
other than (i) reimbursement for reasonable expenses incurred on behalf of the Company or (ii) as part of the normal and customary
terms of such person’s employment or service as a director with the Company.
Section 5.22. Labor
Relations. Except as disclosed in the Commission Documents, no material labor dispute exists or, to the Knowledge of the
Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material
Adverse Effect. Except as disclosed in the Commission Documents, the Company is in compliance with all Laws relating to employment
and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.23. Use
of Proceeds. The proceeds from the sale of the Shares by the Company to
Investor shall be used by the Company in the manner as will be set forth in the Prospectus included in any Registration Statement (and
any post-effective amendment thereto) and any Prospectus Supplement thereto filed pursuant to the Registration Rights Agreement.
Section 5.24. Investment
Company Act Status. The Company is not, and as a result of the consummation of the transactions contemplated by the
Transaction Documents and the application of the proceeds from the sale of the Shares as will be set forth in the Prospectus
included in any Registration Statement (and any post-effective amendment thereto) and any Prospectus Supplement thereto filed
pursuant to the Registration Rights Agreement the Company will not be required to register as an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.
Section 5.25. Tax
Matters. Except as otherwise disclosed in the Commission Documents and except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company or any of its Subsidiaries
(i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns,
reports and declarations required by any jurisdiction to which it is subject as and when due subject to any applicable extensions,
(ii) has paid all taxes and other governmental assessments and charges that are material in amount, whether or not shown or
determined to be due on such returns, reports and declarations, and (iii) has set aside on its books provision reasonably
adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations
apply. Except as otherwise disclosed in the Commission Documents and except for matters that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, there are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the Company has no Knowledge of any basis for any such claim.
Section 5.26. Insurance.
The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as, to
the Company’s knowledge, are adequate for the conduct of its business, and to the Company’s knowledge is prudent and
customary in the business in which the Company is engaged, including, but not limited to, directors and officers insurance coverage,
except where the failure to be so insured, would reasonably be expected to not, individually or in the aggregate, have a Material
Adverse Effect. As of the date of this Agreement, no written notice of cancellation has been received by the Company, non-renewal
disallowance or reduction in coverage or claim or termination has been received by the Company, other than in connection with
ordinary renewals.
Section 5.27. Exemption
from Registration. Subject to, and in reliance on, the representations, warranties and covenants made herein by the
Investor, the offer and sale of the Securities by the Company to the Investor in accordance with the terms and conditions of this
Agreement is exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2); provided, however,
that at the request of and with the express agreement of the Investor (including, without limitation, the representations,
warranties and covenants of Investor set forth in Sections 4.10 through 4.13), the Securities to be issued from and after
Commencement to or for the benefit of the Investor pursuant to this Agreement shall be issued to the Investor or its designee only
as DWAC Shares and will not bear legends noting restrictions as to resale of such securities under federal or state securities laws,
nor will any such securities be subject to stop transfer instructions.
Section 5.28. No
General Solicitation or Advertising. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection
with the offer or sale of the Securities.
Section 5.29. No
Integrated Offering. None of the Company or any of its Affiliates, nor any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would
require registration of the offer, issuance and sale by the Company to the Investor of any of the Securities under the Securities
Act, whether through integration with prior offerings or otherwise, or cause this offering of the Securities to require approval of
stockholders of the Company under any applicable stockholder approval provisions, including, without limitation, under the rules and
regulations of the Trading Market. None of the Company, its Affiliates nor any Person acting on their behalf will take any action or
steps referred to in the preceding sentence that would require registration of the offer, issuance and sale by the Company to the
Investor of any of the Securities under the Securities Act or cause the offering of any of the Securities to be integrated with any
other offering of securities of the Company.
Section 5.30. Dilutive
Effect. The Company is aware and acknowledges that issuance of the Securities could cause dilution to existing stockholders
and could significantly increase the number of outstanding shares of Common Stock. The Company further acknowledges that its
obligation to issue the Commitment Shares and to issue the Shares pursuant to the terms of a VWAP Purchase Notice and pursuant to
the terms of an Intraday VWAP Purchase Notice (as applicable) in accordance with this Agreement is, in each case, absolute and
unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the
Company.
Section 5.31. Manipulation
of Price. Neither the Company nor any of its officers, directors or to the Knowledge of the Company, its Affiliates has,
and, to the Knowledge of the Company, no Person acting on their behalf has, (i) taken, directly or indirectly, any action designed
or intended to cause or to result in the stabilization or manipulation of the price of any security of the Company, or which caused
or resulted in, or which would in the future reasonably be expected to cause or result in, the stabilization or manipulation of the
price of any security of the Company, in each case to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person
any compensation for soliciting another to purchase any other securities of the Company. Neither the Company nor any of its
officers, directors or to the Knowledge of the Company, its Affiliates will during the term of this Agreement, and, to the Knowledge
of the Company, no Person acting on their behalf will during the term of this Agreement, take any of the actions referred to in the
immediately preceding sentence.
Section 5.32. Securities
Act. The Company has complied and shall comply with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Securities hereunder, including, without limitation, the applicable requirements of the Securities
Act. Each Registration Statement, upon filing with the Commission and at the time it is declared effective by the Commission, shall
satisfy all of the requirements of the Securities Act to register the resale of the Registrable Securities included therein by the
Investor in accordance with the Registration Rights Agreement on a delayed or continuous basis under Rule 415 under the Securities
Act at then-prevailing market prices, and not fixed prices. The Company is not currently, and has not been since the Business
Combination Date, an issuer identified in, or subject to, Rule 144(i)(1).The Company has filed current “Form 10
information” (as defined in Rule 144(i)(3) under the Securities Act) with the Commission on September 15, 2023 reflecting its
status as an entity that is not a shell company.
Section 5.33. Listing
and Maintenance Requirements; DTC Eligibility. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act,
and the Company has taken no action designed to, or which to its Knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act, nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not received written notice from the Trading Market (or, if the Common
Stock is then listed on an Eligible Market, from such Eligible Market) to the effect that the Company is not in compliance with the
listing or maintenance requirements of the Trading Market (or of such Eligible Market, as applicable). Except as disclosed in the
Commission Documents filed with the Commission since the Business Combination Date, the Company is in compliance with all applicable
listing and maintenance requirements of the Trading Market. The Common Stock may be issued and transferred electronically to third
parties via DTC through its Deposit/Withdrawal at Custodian (“DWAC”) delivery system. The Company has not
received written notice from DTC to the effect that a suspension of, or restriction on, accepting additional deposits of the Common
Stock, electronic trading or book-entry services by DTC with respect to the Common Stock is being imposed or is contemplated.
Section 5.34. Application
of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Charter or the Delaware General Corporation Law, as amended, that
is or could become applicable to the Investor as a result of the Investor and the Company fulfilling their respective obligations or
exercising their respective rights under the Transaction Documents (as applicable), including, without limitation, as a result of
the Company’s issuance of the Securities and the Investor’s ownership of the Securities.
Section 5.35. Foreign
Corrupt Practices. Neither the Company, nor, to the Knowledge of the Company, any director, officer, agent or employee of
the Company has, directly or indirectly, (1) made any unlawful contribution to any federal, state, local and foreign candidate
for public office, or failed to disclose fully any contribution in violation of law, (2) made any payment to any federal,
state, local and foreign governmental officer or official, or other person charged with similar public or quasi-public duties, other
than payments required or permitted by the laws of the United States or any jurisdiction thereof, (3) violated or is in
violation of any provisions of the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), or
(4) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
Section 5.36. Office
of Foreign Assets Control. Neither the Company nor, to the Knowledge of
the Company, any director, officer, agent or employee of the Company is currently subject to any U.S. sanctions (the “Sanctions
Regulations”) administered by the Office of Foreign Assets Control of
the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the net proceeds from the sale
of the Shares, or lend, contribute or otherwise make available such net proceeds to any subsidiary, joint venture partner or other Person,
for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC or listed on the
OFAC Specially Designated Nationals and Blocked Persons List. Neither the Company nor, to the Knowledge of the Company, any director,
officer, agent or employee of the Company, is named on any denied party or entity list administered by the Bureau of Industry and Security
of the U.S. Department of Commerce pursuant to the Export Administration Regulations (“EAR”); and the Company will not, directly
or indirectly, use the proceeds of the sale of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to
any Person, for the purpose of financing the activities of any person currently subject to any Sanctions Regulations or to support activities
in or with countries sanctioned by said authorities, or for engaging in transactions that violate the EAR.
Section 5.37. Money
Laundering. To the Company’s Knowledge, the operations of the Company is and has been conducted at all times in the
last five (5) years in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced
by any Governmental Entity (collectively, the “Money Laundering Laws”) and no material action, suit or
proceeding by or before any Governmental Entity involving the Company with respect to the Money Laundering Laws is pending or, to
the Knowledge of the Company, threatened.
Section 5.38. ERISA.
Except as disclosed in the Commission Documents and except as would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, each material employee benefit plan, within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and all stock purchase, stock
option, stock-based severance, employment, change-in-control, medical, disability, fringe benefit, bonus, incentive, deferred
compensation, employee loan and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or
not subject to ERISA, that is maintained, administered or contributed to by the Company or any of its Affiliates for employees or
former employees, directors or independent contractors of the Company, or under which the Company has had or has any present or
future obligation or liability, has been maintained in material compliance with its terms and the requirements of any applicable
federal, state, local and foreign Laws, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the
“Code”); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975
of the Code, has occurred which would result in a material liability to the Company with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption; no event has occurred (including a “reportable
event” as such term is defined in Section 4043 of ERISA) and no condition exists that would subject the Company to any
material tax, fine, lien, penalty, or liability imposed by ERISA, the Code or other applicable Law; and for each such plan that is
subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of
the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all
benefits accrued under such plan determined using reasonable actuarial assumptions.
Section 5.39. IT
Systems. To the Knowledge of the Company and except as otherwise described in the
Commission Documents, and except as would not, individually or in the aggregate, result in a Material Adverse Effect, (i) there has
been no security breach or attack or other compromise of or relating to any of the Company’s information technology and
computer systems, networks, hardware, software, data (including the data of its customers, employees, suppliers, vendors and any
third party data maintained by or on its behalf), equipment or technology (“IT Systems and Data”),
(ii) the Company has not been notified of any event or condition that would reasonably be expected to result in any security
breach, attack or compromise to its IT Systems and Data, (iii) the Company has complied in all material respects, and is
presently in material compliance with, all applicable Laws of any Governmental Entity and all industry guidelines, standards,
internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of
such IT Systems and Data from unauthorized use, access, misappropriation or modification and (iv) the Company has implemented
backup and disaster recovery technology consistent with industry standards and practice.
Section 5.40. Privacy
Laws. Except as otherwise described in the Commission Documents, and except as would
not, individually or in the aggregate, result in a Material Adverse Effect, the Company is, and at all prior times was, in
compliance with all applicable data privacy and security Laws; and the Company has taken all necessary actions to comply in all
respects with the European Union General Data Protection Regulation (“GDPR”) (EU 2016/679) (collectively,
“Privacy Laws”). The Company has in place, complies with, and takes appropriate steps reasonably
designed to ensure compliance in all material respects with its policies and procedures relating to data privacy and security and
the collection, storage, use, disclosure, handling and analysis of Personal Data (the
“Policies”). The Company provides accurate notice of its Policies to its customers, employees, third
party vendors and representatives. The Policies provide accurate and sufficient notice of the Company’s then-current
privacy practices relating to its subject matter and such Policies do not contain any material omissions of the Company’s
then-current privacy practices. “Personal Data” means (i) a natural persons’ name, street
address, telephone number, email address, photograph, social security number, bank information, or customer or account number;
(ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission
Act, as amended; (iii) “personal data” as defined by GDPR; and (iv) any other piece of information that allows the
identification of such natural person, or his or her family, or permits the collection or analysis of any data related to an
identified person’s health or sexual orientation. Except as would not, individually or in the aggregate, result in a
Material Adverse Effect, none of such disclosures made or contained in any of the Policies have been inaccurate, misleading,
deceptive or in violation of any Privacy Laws or Policies. The execution, delivery and performance of this Agreement, the
Registration Rights Agreement or any of the other Transaction Documents will not result in a breach of any Privacy Laws or
Policies. Except as would not, individually or in the aggregate, result in a Material Adverse Effect, the Company (i) has
not received written notice of any actual or potential liability under or relating to, or actual or potential violation of, any of
the Privacy Laws, and has no Knowledge of any event or condition that would reasonably be expected to result in any such notice;
(ii) is not currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective
action pursuant to any Privacy Law; or (iii) is not a party to any Order or agreement that imposed any obligation or liability
under any Privacy Law.
Section 5.41. U.S.
Real Property Holding Corporation. Except as disclosed in the Commission Documents, to the Company’s Knowledge, the
Company is not, has not been at any time during the five (5)-year period ending on the date of this Agreement, a U.S. real property
holding corporation within the meaning of Section 897 of the Code.
Section 5.42. Margin
Rules. Neither the issuance, sale and delivery of the Securities nor the application of the proceeds thereof by the Company
as described in the Commission Documents filed with the Commission since the Business Combination Date will violate Regulation T, U
or X of the Board of Governors of the Federal Reserve System or any other regulation of such Board of Governors.
Section 5.43. Emerging
Growth Company Status. As of the Closing Date, the Company was, and as of the Commencement Date the Company will be, an
“emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our
Business Startups Act of 2012.
Section 5.44. Smaller
Reporting Company Status. As of the Closing Date, the Company was, and as of the Commencement Date the Company will be, a
“smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.
Section 5.45. [Reserved].
Section 5.46. [Reserved].
Section 5.47. Regulatory
Compliance. Except as disclosed in the Commission Documents filed with the Commission since the Business Combination Date or
as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:
(a)
The Company has obtained all required Regulatory Permits and the Company and the Products are in compliance in all material respects
with all Regulatory Permits. To the Knowledge of the Company, (i) no Governmental Entity is considering limiting, suspending or revoking
any Regulatory Permit and (ii) each third party that is a manufacturer, contractor or agent for the Company is in compliance in all material
respects with all Regulatory Permits required by all applicable Healthcare Laws insofar as they reasonably pertain to the Products.
(b) Neither
the Company nor, to the Company’s Knowledge, any Representatives acting for or on behalf of the Company has received any
written notice that the FDA or any other Governmental Entity responsible for oversight or enforcement of any applicable Healthcare
Law, or any institutional review board (or similar body responsible for oversight of human subjects research) or institutional
animal care and use committees (or similar body responsible for oversight of animal research), has initiated, or threatened in
writing to initiate, any Proceeding to restrict or suspend nonclinical research on or clinical study of any Product, or to recall or
request a recall of any Product, or to suspend or otherwise restrict the manufacture of any Product, or in which the
Governmental Entity alleges or asserts a failure to comply, with applicable Healthcare Laws.
(c)
There are no Proceedings pending or, to the Company’s Knowledge, threatened, with respect to any alleged violation by the
Company or, to the Company’s Knowledge, any Representatives acting for or on behalf of the Company, of the FDCA or any other applicable
Healthcare Law, and neither the Company nor, to the Company’s Knowledge, any Representatives acting for or on behalf of the Company,
is party to or subject to any corporate integrity agreement, monitoring agreement, consent decree, deferred prosecution agreement, settlement
Orders or similar Contract with or imposed by any Governmental Entity related to any applicable Healthcare Law.
(d)
To the Knowledge of the Company, all Products are being and have been developed, tested,
investigated, manufactured, packaged, imported, exported, labeled and distributed in compliance in all material respects with applicable
Healthcare Laws. All manufacture of Products, including all clinical supplies used in clinical trials, by or on behalf of the Company
has been conducted in compliance with the applicable specifications and requirements of Good Manufacturing Practices and all other applicable
Laws. To the Knowledge of the Company, no manufacturing site used for the manufacture of Product is subject to a Governmental Entity shutdown
or import or export prohibitions or has received any Form FDA 483, notice of violation, warning letter, untitled letter or similar correspondence
or notice from FDA or other Governmental Entity alleging noncompliance with any applicable Law, in each case, that have not been complied
with or closed to the satisfaction of the relevant Governmental Entity, and to the Knowledge of the Company, neither the FDA or any other
Governmental Entity is considering such action.
(e)
Neither the Company nor, to the Company’s Knowledge, has any Person engaged by the
Company for contract research, contract manufacturing, consulting, or other collaboration services with respect to any Product made an
untrue statement of a material fact or a fraudulent statement to the FDA or any other Governmental Entity responsible for enforcement
or oversight with respect to applicable Healthcare Laws, or failed to disclose a material fact required to be disclosed to the FDA or
such other Governmental Entity that, at the time such disclosure was made, would reasonably be expected to provide a basis for the FDA
to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in
56 Fed. Reg. 46191 (September 10, 1991), or for any other Governmental Entity to invoke a similar policy.
(f)
To the Knowledge of the Company, all preclinical studies and clinical trials conducted or
being conducted with respect to all Products by or at the direction of the Company are being and have been conducted in material compliance
with accepted professional scientific standards and all applicable Laws, including (i) all applicable Healthcare Laws, including
the applicable requirements of Good Clinical Practices and applicable foreign Laws in the jurisdictions where clinical trials were or
are being conducted; and (ii) applicable Law governing the privacy of patient medical records and other personal information and
data.
(g) None of the Company or
any of its directors, officers or employees, and, to the Company’s Knowledge, none of the Company’s individual
independent contractors or other service providers, including clinical trial investigators, coordinators, or monitors, have been or
are currently (i) disqualified, excluded or debarred under or, to the Company’s Knowledge, currently subject to a Proceeding
that would reasonably be expected to result in disqualification, exclusion or debarment, the assessment of civil monetary penalties
for violation of any health care programs of any Governmental Entity under, or (ii) convicted of any crime regarding health care
products or services, or engaged in any conduct that would reasonably be expected to result in any such debarment, exclusion,
disqualification, or ineligibility under applicable Healthcare Laws.
(h)
None of the Company or any of its current or former directors, officers or employees, and, to the Company’s Knowledge, none
of the Company’s individual independent contractors or other service providers, to the extent acting on behalf of the Company, have
been subject to any consent decree of, or criminal or civil fine or penalty imposed by, any Governmental Entity related to fraud, theft,
embezzlement, breach of fiduciary responsibility, financial misconduct, or obstruction of an investigation of controlled substances. None
of the Company or any of its current or former directors, officers or employees, and, to the Company’s Knowledge, none of the Company’s
individual independent contractors or other service providers, to the extent acting on behalf of the Company, have been subject to any
enforcement, regulatory or administrative proceedings against or affecting the Company or any of its Affiliates relating to material violations
of any Healthcare Law and no such enforcement, regulatory or administrative proceeding has been threatened in writing. None of the Company
or any of its directors, officers or employees, and, to the Company’s Knowledge, none of the Company’s individual independent
contractors or other service providers, to the extent acting on behalf of the Company, have received written notice from the FDA, any
other Governmental Entity or any health insurance institution with respect to debarment, disqualification or restriction.
(i)
All material reports, documents, claims, permits and notices required to be filed, maintained or furnished to the FDA or any similar
foreign Governmental Entity by the Company have been so filed, maintained or furnished. All such reports, documents, claims, permits and
notices were complete and accurate in all material respects on the date filed (or were corrected or supplemented by a subsequent filing).
(j)
Neither the Company nor any of its officers, directors or employees received written notice from the FDA or the Federal Trade Commission
or other Governmental Entity in connection with advertising or promotion of any Products.
Section 5.48. Broker/Dealer
Relationships; FINRA Information. The Company (i) is not required to register as a “broker” or
“dealer” in accordance with the provisions of the Exchange Act or (ii) does not, directly or indirectly through one or
more intermediaries, control or is a “person associated with a member” or “associated person of a member”
(within the meaning set forth in the FINRA Manual). All of the information provided to the Investor, BRS or to their counsel,
specifically for use by BRS in connection with the FINRA Filing (and related disclosure) with FINRA, by the Company, its counsel,
its officers and directors and the holders of any securities (debt or equity) or options to acquire any securities of the Company in
connection with the transactions contemplated by the Transaction Documents is true, complete, correct and compliant with
FINRA’s rules and any letters, filings or other supplemental information provided to FINRA pursuant to FINRA Rules.
Section
5.49. Acknowledgement Regarding Relationship with Investor and BRS. The Company acknowledges and agrees, to the
fullest extent permitted by Law, that the Investor is acting solely in the capacity of an arm’s-length purchaser with respect
to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents, and BRS is
acting as a representative of the Investor in connection with the transactions contemplated by the Transaction Documents, and of no
other party, including the Company. The Company further acknowledges that while the Investor will be deemed to be a statutory
“underwriter” with respect to certain of the transactions contemplated by the Transaction Documents in accordance with
interpretive positions of the Staff of the Commission, the Investor is a “trader” that is not required to register with
the Commission as a broker-dealer under Section 15(a) of the Securities Exchange Act of 1934. The Company further acknowledges that
the Investor and its representatives are not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement, the Registration Rights Agreement and the transactions contemplated by the Transaction Documents,
and any advice given by the Investor or any of its representatives (including BRS) or agents in connection therewith is merely
incidental to the Investor’s acquisition of the Securities. The Company understands and acknowledges that employees of BRS may
discuss market color, VWAP Purchase Notice and Intraday VWAP Purchase Notice timing and parameter considerations and other related
capital markets considerations with the Company in connection with the Transaction Documents and the transactions contemplated
thereby, in all cases on behalf of the Investor. The Company acknowledges and agrees that the Investor has not made and does not
make any representations or warranties with respect to the transactions contemplated by the Transaction Documents other than those
specifically set forth in Article IV.
Section
5.50. Acknowledgement Regarding Investor’s Affiliate Relationships. Affiliates of the Investor, including BRS,
engage in a wide range of activities for their own accounts and the accounts of customers, including corporate finance, mergers and
acquisitions, merchant banking, equity and fixed income sales, trading and research, derivatives, foreign exchange, futures, asset
management, custody, clearance and securities lending. In the course of their respective business, Affiliates of the Investor may,
directly or indirectly, hold long or short positions, trade and otherwise conduct such activities in or with respect to debt or
equity securities or bank debt of, or derivative products relating to, the Company. Any such position will be created, and
maintained, independently of the position the Investor takes in the Company. In addition, at any given time Affiliates of the
Investor, including BRS, may have been or in the future may be engaged by one or more entities that may be competitors with, or
otherwise adverse to, the Company in matters unrelated to the transactions contemplated by the Transaction Documents, and Affiliates
of the Investor, including BRS may have or may in the future provide investment banking or other services to the Company in matters
unrelated to the transactions contemplated by the Transaction Documents. Activities of any of the Investor’s Affiliates
performed on behalf of the Company may give rise to actual or apparent conflicts of interest given the Investor’s potentially
competing interests with those of the Company. The Company expressly acknowledges the benefits it receives from the Investor’s
participation in the transactions contemplated by the Transaction Documents, on the one hand, and the Investor’s
Affiliates’ activities, if any, on behalf of the Company unrelated to the transactions contemplated by the Transaction
Documents, on the other hand, and understands the conflict or potential conflict of interest that may arise in this regard, and has
consulted with such independent advisors as it deems appropriate in order to understand and assess the risks associated with these
potential conflicts of interest. Consistent with applicable legal and regulatory requirements, applicable Affiliates of the Investor
have adopted policies and procedures to establish and maintain the independence of their research departments and personnel from
their investment banking groups and the Investor. As a result, research analysts employed by Affiliates of the Investor may hold
views, make statements or investment recommendations or publish research reports with respect to the Company or the transactions
contemplated by the Transaction Documents that differ from the views of the Investor.
Article
VI
ADDITIONAL COVENANTS
The
Company covenants with the Investor, and the Investor covenants with the Company, as follows, which covenants of one party are for the
benefit of the other party, during the Investment Period (and with respect to the Company, for the period following the termination of
this Agreement specified in Section 8.3 pursuant to and in accordance with Section 8.3):
Section
6.1. Securities Compliance. The Company shall notify the Commission and the Trading Market, if and as applicable, in accordance
with their respective rules and regulations, of the transactions contemplated by the Transaction Documents, and shall take all necessary
action, undertake all proceedings and obtain all registrations, permits, consents and approvals for the legal and valid issuance of the
Securities to the Investor in accordance with the terms of the Transaction Documents, as applicable.
Section
6.2. Reservation of Common Stock. The Company has available and the Company shall reserve and keep available at all
times, free of preemptive and other similar rights of stockholders, the requisite aggregate number of authorized but unissued shares
of Common Stock to enable the Company to timely effect (i) the issuance and delivery of all Commitment Shares to be issued and
delivered to the Investor under Section 10.1(ii)(a) hereof within the time period specified in Section 10.1(ii)(a) hereof, (ii) the
issuance, sale and delivery of all Shares to be issued, sold and delivered in respect of each VWAP Purchase effected under this
Agreement, in the case of this clause (ii), at least prior to the delivery by the Company to the Investor of the applicable VWAP
Purchase Notice in connection with such VWAP Purchase, and (iii) the issuance, sale and delivery of all Shares to be issued, sold
and delivered in respect of each Intraday VWAP Purchase effected under this Agreement, in the case of this clause (iii), at least
prior to the delivery by the Company to the Investor of the applicable Intraday VWAP Purchase Notice in connection with such
Intraday VWAP Purchase. Without limiting the generality of the foregoing, (a) as of the date of this Agreement, the Company has
reserved, out of its authorized and unissued Common Stock, 40,000 shares of Common Stock solely for the purpose of issuing all of
the Commitment Shares under this Agreement to be issued and delivered to the Investor under Section 10.1(ii)(a) hereof within the
time period specified in Section 10.1(ii)(a) hereof, and (b) as of the date of this Agreement the Company has reserved, and as of
the Commencement Date shall have continued to reserve, out of its authorized and unissued Common Stock, 3,209,360 shares of Common
Stock solely for the purpose of issuing Shares pursuant to one or more VWAP Purchases and pursuant to one or more Intraday VWAP
Purchases (as applicable) that may be effected by the Company, in its sole discretion, from time to time from and after the
Commencement Date under this Agreement. The number of shares of Common Stock so reserved for the purpose of effecting issuances of
Shares pursuant to VWAP Purchases and pursuant to Intraday VWAP Purchases under this Agreement (as applicable) may be increased from
time to time by the Company from and after the Commencement Date, and such number of reserved shares may be reduced from and after
the Commencement Date only by the number of Shares actually issued, sold and delivered to the Investor pursuant to any VWAP Purchase
and any Intraday VWAP Purchase (as applicable) effected from and after the Commencement Date pursuant to this Agreement.
Section
6.3. Registration and Listing. The Company shall use its commercially reasonable efforts to cause the Common Stock to continue
to be registered as a class of securities under Sections 12(b) of the Exchange Act, and to comply with its reporting and filing obligations
under the Exchange Act, and shall not take any action or file any document (whether or not permitted by the Securities Act or the Exchange
Act) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act
or Securities Act, except as permitted herein. The Company shall use its commercially reasonable efforts to continue the listing and
trading of its Common Stock and the listing of the Securities purchased or acquired by the Investor hereunder on the Trading Market (or
another Eligible Market) and to comply with the Company’s reporting, filing and other obligations under the rules and regulations
of the Trading Market (or other Eligible Market, as applicable). The Company shall not take any action which could be reasonably expected
to result in the delisting or suspension of the Common Stock on the Trading Market (or other Eligible Market, as applicable). If the
Company receives any final and non-appealable notice that the listing or quotation of the Common Stock on the Trading Market (or other
Eligible Market, as applicable) shall be terminated on a date certain, the Company shall promptly (and in any case within 24 hours) notify
the Investor of such fact in writing and shall use its commercially reasonable efforts to cause the Common Stock to be listed or quoted
on another Eligible Market.
Section
6.4. Compliance with Laws.
(i)
During the Investment Period, the Company (a) shall comply, and cause each Subsidiary to comply, with all laws, rules, regulations and
Orders applicable to the business and operations of the Company, except as would not have a Material Adverse Effect and (b) with applicable
provisions of the Securities Act and the Exchange Act, including Regulation M thereunder, applicable state securities or “Blue
Sky” laws (but only to the extent set forth in Section 6.11), and applicable listing rules of the Trading Market (or Eligible Market,
as applicable), except as would not, individually or in the aggregate, prohibit or otherwise interfere with the ability of the Company
to enter into and perform its obligations under this Agreement in any material respect or for Investor to conduct resales of Securities
under the Registration Statement in any material respect. Without limiting the foregoing, neither the Company, nor any of its Subsidiaries,
nor to the Knowledge of the Company, any of their respective directors, officers, agents, employees or any other Persons acting on their
behalf shall, in connection with the operation of the Company’s and its Subsidiaries’ respective businesses, (1) use any
corporate funds for unlawful contributions, payments, gifts or entertainment or to make any unlawful expenditures relating to political
activity to government officials, candidates or members of political parties or organizations, (2) pay, accept or receive any unlawful
contributions, payments, expenditures or gifts, or (3) violate or operate in noncompliance with any export restrictions, anti-boycott
regulations, embargo regulations or other applicable domestic or foreign laws and regulations, including, without limitation, the FCPA
and Money Laundering Laws.
(ii)
The Investor shall comply with all laws, rules, regulations and Orders applicable to the performance by it of its obligations under this
Agreement and its investment in the Securities, except as would not, individually or in the aggregate, prohibit or otherwise interfere
with the ability of the Investor to enter into and perform its obligations under this Agreement in any material respect. Without limiting
the foregoing, the Investor shall comply with all applicable provisions of the Securities Act and the Exchange Act, including Regulation
M thereunder, the rules and regulations of FINRA, and all applicable state securities or “Blue Sky” laws.
Section
6.5. Keeping of Records and Books of Account; Due Diligence.
(i)
The Investor and the Company shall each maintain records showing the remaining Total Commitment, the remaining Aggregate Limit, the dates
and VWAP Purchase Share Amount for each VWAP Purchase, and the dates and Intraday VWAP Purchase Share Amount for each Intraday VWAP Purchase.
(ii)
Subject to the requirements of Section 6.12, from time to time from and after the Closing Date, the Company shall make available for
inspection and review by the Investor during normal business hours and after reasonable notice, customary documentation reasonably requested
by the Investor and/or its appointed counsel or advisors to conduct due diligence; provided, however, that after the Closing
Date, the Investor’s continued due diligence shall not be a condition precedent to the Commencement or to the Investor’s
obligation to accept each VWAP Purchase Notice and each Intraday VWAP Purchase Notice timely delivered by the Company to the Investor
in accordance with this Agreement.
Section
6.6. No Frustration; No Dilutive Issuances; No Other Similar Transactions.
(i)
No Frustration. The Company shall not enter into, announce or recommend to its shareholders any agreement, plan, arrangement
or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right of the
Company to perform its obligations under the Transaction Documents to which it is a party, including, without limitation, the obligation
of the Company to (i) deliver the Commitment Shares to the Investor not later than 4:00 p.m. (New York time) on the Trading Day immediately
following the Closing Date in accordance with Section 10.1(ii)(a), (ii) pay the Cash Commitment Fee to the Investor in such manner, at
such time and otherwise pursuant to and in accordance with Section 10.1(ii)(b), and (iii) deliver the Shares to the Investor in respect
of each VWAP Purchase and each Intraday VWAP Purchase effected by the Company pursuant to this Agreement, in each case not later than
the applicable Purchase Share Delivery Date with respect to such VWAP Purchase and such Intraday VWAP Purchase (as applicable) in accordance
with Section 3.3. For the avoidance of doubt, nothing in this Section 6.6(i) shall in any way limit the Company’s right to terminate
this Agreement in accordance with Section 8.2 (subject in all cases to Section 8.3).
(ii) No
Dilutive Issuances Before Settlement of a Pending VWAP Purchase or Pending Intraday VWAP Purchase. None of the Company or
any Subsidiary shall issue, sell or grant any right, option or warrant to purchase, or allot issue, sell or grant any right to
reprice (or reset the purchase price therefor), or otherwise dispose of for cash (or enter into any agreement, plan or arrangement
contemplating any of the foregoing, or seek to utilize any existing agreement, plan or arrangement to effect any of the foregoing),
or announce any offer, issuance, sale or grant of any option or warrant to purchase or other disposition for cash (or any agreement,
plan or arrangement therefor), at any time (i) during the period beginning on the Trading Day immediately preceding the Purchase
Date for a VWAP Purchase and ending on the third (3rd) Trading Day following the date of full settlement thereof and the issuance to
the Investor of all of the Shares that are issuable to the Investor pursuant to such VWAP Purchase, and (ii) during the period
beginning on the Trading Day immediately preceding the Purchase Date for an Intraday VWAP Purchase and ending on the third (3rd)
Trading Day following the date of full settlement thereof and the issuance to the Investor of all of the Shares that are issuable to
the Investor pursuant to such Intraday VWAP Purchase (each such period specified in clauses (i) and (ii) above, a
“Reference Period”), any shares of Common Stock or Common Stock Equivalents, at an effective price per
Share less than the applicable VWAP Purchase Price per Share for such VWAP Purchase, or the applicable Intraday VWAP Purchase Price
per Share for such Intraday VWAP Purchase, as the case may be (each such price, the “Reference Price”) to
be paid by the Investor in such VWAP Purchase or such Intraday VWAP Purchase, as the case may be, effected during such Reference
Period (each such issuance, a “Dilutive Issuance”), other than an Exempt Issuance (it being understood and
agreed that if the holder of Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or
rights per share which are issued in connection with such issuance, be entitled to receive Common Stock at an effective price per
Share that is less than the applicable Reference Price, such issuance shall be deemed to have occurred for less than the applicable
Reference Price on such date of the Dilutive Issuance at such effective price). If the Company enters into a Variable Rate
Transaction involving the issuance of Common Stock Equivalents having a conversion price, exercise price, exchange rate or other
price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial
issuance of such Common Stock Equivalents, the Company shall be deemed to have issued, as of the date the Common Stock Equivalents
were issued (whether or not such Common Stock Equivalents are then immediately exercisable or convertible), the Common Stock
underlying such Common Stock Equivalents at the lowest possible conversion or exercise price at which such Common Stock Equivalents
may be converted or exercised for Common Stock (and if such Common Stock Equivalents include a “floor price”
representing the lowest conversion or exercise price at which such Common Stock Equivalents may be converted or exercised, the
Company shall be deemed to have issued the Common Stock underlying such Common Stock Equivalents at a price equal to such floor
price). The Investor shall be entitled to seek injunctive relief against the Company, and any Subsidiary (as applicable) to preclude
any such Dilutive Issuance that does not constitute an Exempt Issuance, which remedy shall be in addition to any right to collect
damages, without the necessity of showing economic loss and without any bond or other security being required.
(iii) No
Other Similar Transactions. From and after the date of this Agreement until the earliest of (i) the date of automatic
termination of this Agreement pursuant to Section 8.1, (ii) the effective date of termination of this Agreement by the mutual
written consent of the parties hereto pursuant to Section 8.2, and (iii) the effective date of termination of this Agreement by the
Investor pursuant to Section 8.2, neither the Company nor any Subsidiary shall issue, sell or grant any, or otherwise dispose of or
issue (or enter into any agreement, plan or arrangement contemplating any of the foregoing, or seek to utilize any existing
agreement, plan or arrangement to effect any of the foregoing), or announce any offer, issuance, sale or grant or other disposition
or issuance (or any agreement, plan or arrangement therefor) any Common Stock or Common Stock Equivalents (or a combination of units
thereof) in any “equity line of credit” or “at the market offering” or other substantially similar
continuous offering in which the Company may offer, issue or sell Common Stock or Common Stock Equivalents (or any combination of
units thereof) at a future determined price, other than (a) Securities issued to the Investor pursuant to this Agreement and any of
the other Transaction Documents, or pursuant to any other agreement entered into by the Company, on the one hand, and the Investor
or any of its Affiliates, on the other hand, at any time after the date of termination of this Agreement or (b) any Exempt
Issuance.
Section
6.7. Corporate Existence. The Company shall take all steps necessary to preserve and continue the corporate existence of the
Company; provided, however, that, except as provided in Section 6.8, nothing in this Agreement shall be deemed to prohibit
the Company from engaging in any Fundamental Transaction with another Person. For the avoidance of doubt, nothing in this Section 6.7
shall in any way limit the Company’s right to terminate this Agreement in accordance with Section 8.2 (subject in all cases to
Section 8.3).
Section
6.8. Fundamental Transaction. If a VWAP Purchase Notice or an Intraday VWAP Purchase Notice has been delivered to the Investor
and the transactions contemplated therein have not yet been fully settled in accordance with Section 3.3 of this Agreement, the Company
shall not effect any Fundamental Transaction until the expiration of five (5) Trading Days following the date of full settlement thereof
and the issuance to the Investor of all of the Shares that are issuable to the Investor pursuant to the VWAP Purchase or Intraday VWAP
Purchase (as applicable) to which such VWAP Purchase Notice or Intraday VWAP Purchase Notice (as applicable) relates.
Section
6.9. Selling Restrictions.
(i)
Except as expressly set forth below, the Investor covenants that from and after the Closing Date through and including the Trading
Day next following the expiration or termination of this Agreement as provided in Article VIII (the “Restricted
Period”), none of the Investor, its sole member, any of their respective officers, or any entity managed or controlled
by the Investor or its sole member (collectively, the “Restricted Persons” and each of the foregoing is
referred to herein as a “Restricted Person”) shall, directly or indirectly, (i) engage in any Short Sales
of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock, with
respect to each of clauses (i) and (ii) hereof, either for its own account or for the account of any other Restricted Person.
Notwithstanding the foregoing, it is expressly understood and agreed that nothing contained herein shall (without implication
that the contrary would otherwise be true) prohibit any Restricted Person during the Restricted Period from: (1) selling
“long” (as defined under Rule 200 promulgated under Regulation SHO) the Securities; or (2) selling a number of
shares of Common Stock equal to the number of Shares that the Investor is unconditionally obligated to purchase under any
pending VWAP Purchase Notice or any pending Intraday VWAP Purchase Notice (as applicable), but has not yet received from the
Company or its transfer agent pursuant to this Agreement, so long as (X) the Investor (or its Broker-Dealer, as applicable) delivers
the Shares purchased pursuant to such pending VWAP Purchase Notice and the Shares purchased pursuant to such pending Intraday VWAP
Purchase Notice (as applicable) to the purchaser thereof promptly upon the Investor’s receipt of such Shares from the Company
in accordance with Section 3.3 of this Agreement and (Y) neither the Company or its transfer agent shall have failed for any reason
to deliver such Shares to the Investor or its Broker-Dealer so that such Shares are timely received by the Investor as DWAC Shares
on the applicable Purchase Share Delivery Date for such VWAP Purchase and on the applicable Purchase Share Delivery Date for such
Intraday VWAP Purchases (as applicable) in accordance with Section 3.3 of this Agreement.
(ii)
In addition to the foregoing, in connection with any sale of Securities (including any sale permitted by paragraph (i) above), the Investor
shall comply in all respects with all applicable laws, rules, regulations and Orders, including, without limitation, the requirements
of the Securities Act and the Exchange Act.
(iii)
The Investor covenants and agrees that during the Restricted Period, none of the Investor or any other Restricted Person shall, directly
or indirectly, allow any shares of Common Stock beneficially owned by the Investor to be borrowed against for any third Person to utilize
in any Short Sale of Common Stock. Without limiting the generality of the immediately preceding sentence, the Investor covenants and
agrees that, with respect to each brokerage account of the Investor and each other Restricted Person in which shares of Common Stock
beneficially owned by the Investor are held or to be held during the Restricted Period, the Investor and each other Restricted Person
(as applicable) shall provide written instructions to the applicable broker that the Investor or the Restricted Person (as applicable)
does not wish to participate in, and expressly opts out of, any “fully paid lending program” or similar program with respect
to such brokerage account so that shares of Common Stock beneficially owned by the Investor that are or to be held in such brokerage
account during the Restricted Period will not be made available by the broker for lending to any third Person in connection with, to
effect or otherwise to facilitate any Short Sale of Common Stock by any Person.
Section
6.10. Effective Registration Statement. During the Investment Period, the Company shall use its commercially reasonable efforts
to maintain the continuous effectiveness of the Initial Registration Statement and each New Registration Statement filed with the Commission
under the Securities Act for the applicable Registration Period pursuant to and in accordance with the Registration Rights Agreement.
Section
6.11. Blue Sky. The Company shall take such action, if any, as is necessary by the Company in order to obtain an exemption
for or to qualify the Securities for sale by the Company to the Investor pursuant to the Transaction Documents, and at the request of
the Investor, the subsequent resale of Registrable Securities by the Investor, in each case, under applicable state securities or “Blue
Sky” laws and shall provide evidence of any such action so taken to the Investor from time to time following the Closing Date;
provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify
to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 6.11, (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.
Section
6.12. Non-Public Information. Neither the Company, nor any of its directors, officers, employees or agents shall disclose
any material non-public information about the Company to the Investor, unless a simultaneous public announcement thereof is made by
the Company in the manner contemplated by Regulation FD. In the event of a breach of the foregoing covenant by the Company, or any
of its directors, officers, employees and agents (as determined in the reasonable good faith judgment of the Investor), (i) the
Investor shall promptly provide written notice of such breach to the Company and (ii) after such notice has been provided to the
Company and, provided that the Company shall have failed demonstrate to the Investor in writing within 48 hours that such
information does not constitute material, non-public information or the Company shall have failed to publicly disclose such
material, non-public information within 48 hours following demand therefor by the Investor, in addition to any other remedy provided
herein or in the other Transaction Documents, if the Investor is holding any Shares at the time of the disclosure of material,
non-public information, the Investor shall have the right to make a public disclosure, in the form of a press release, public
advertisement or otherwise, of such material, non-public information without the prior approval by the Company, or any of its
directors, officers, employees or agents. The Investor shall not have any liability to the Company, or any of its directors,
officers, employees, stockholders or agents, for any such disclosure.
Section
6.13. Broker-Dealer. The Investor shall use one or more broker-dealers (one of which is BRS, an Affiliate of the Investor)
to effectuate all sales, if any, of the Securities that it may purchase or otherwise acquire from the Company pursuant to the Transaction
Documents, as applicable, which (or whom) shall be a DTC participant (collectively, the “Broker-Dealer”). The
Investor shall, from time to time, provide the Company and the Company’s transfer agent with all information regarding the Broker-Dealer
reasonably requested by the Company. The Investor shall be solely responsible for all fees and commissions of the Broker-Dealer (if any),
which shall not exceed customary brokerage fees and commissions and shall be responsible for designating only a DTC participant eligible
to receive DWAC Shares.
Section
6.14. FINRA Filing. The Company shall assist the Investor and BRS with BRS’ preparation and filing with
FINRA’s Corporate Financing Department via the Public Offering System of all documents and information required to be filed
with FINRA pursuant to FINRA Rule 5110 with regard to the transactions contemplated by this Agreement (the “FINRA
Filing”). In connection therewith, on or prior to the date the FINRA Filing is first made by BRS with FINRA, the
Company shall pay to FINRA by wire transfer of immediately available funds the applicable filing fee with respect to the FINRA
Filing, and the Company shall be solely responsible for payment of such fee. The parties hereby agree to provide each other and
BRS all requisite information and otherwise to assist each other and BRS in a timely fashion in order for BRS to complete the
preparation and submission of the FINRA Filing in accordance with this Section 6.14 and to assist BRS in promptly responding to any
inquiries or requests from FINRA or its staff. Each party hereto shall (a) promptly notify the other party and BRS of any
communication to that party or its Affiliates from FINRA, including, without limitation, any request from FINRA or its staff for
amendments or supplements to or additional information in respect of the FINRA Filing and permit the other party and BRS to review
in advance any proposed written communication to FINRA and (b) furnish the other party and BRS with copies of all written
correspondence, filings and communications between them and their affiliates and their respective representatives and advisors, on
the one hand, and FINRA or members of its staff, on the other hand, with respect to this Agreement, the Registration Rights
Agreement or the transactions contemplated by the Transaction Documents. Each of the parties hereto agrees to use its commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the
other party and BRS in doing, all things necessary, proper or advisable in order for BRS to obtain as promptly as practicable
written confirmation from FINRA to the effect that FINRA’s Corporate Financing Department has determined not to raise any objection
with respect to the fairness and reasonableness of the terms of the transactions contemplated by the Transaction Documents.
Notwithstanding anything to the contrary contained in this Agreement, the Commencement Date shall not occur, unless and until BRS
shall have received written confirmation from FINRA to the effect that FINRA’s Corporate Financing Department has determined not to
raise any objection with respect to the fairness and reasonableness of the terms of the transactions contemplated by this
Agreement.
Section
6.15. QIU. If the Investor or any of its Affiliates, including BRS, reasonably determines that a Qualified Independent Underwriter
is required to participate in the transactions contemplated by the Transaction Documents in order for such transactions to be in full
compliance with the rules and regulations of FINRA, including, without limitation, FINRA Rule 5121, each of the parties hereto shall
have executed such documentation as may reasonably be required to engage a Qualified Independent Underwriter to participate in the transactions
contemplated by the Transaction Documents in accordance with the rules and regulations of FINRA, including, without limitation, FINRA
Rule 5121. The Company shall pay the fees and expenses of such Qualified Independent Underwriter pursuant to an engagement letter between
the Company and such Qualified Independent Underwriter at such time and otherwise as set forth in such engagement letter. On the Commencement
Date, the Investor shall reimburse (or shall cause one of its Affiliates to reimburse) the Company, by wire transfer of immediately available
funds to an account designated by the Company on or prior to the Commencement Date, an amount in cash equal to the full amount of the
fees and expenses of such Qualified Independent Underwriter that were paid by the Company to such Qualified Independent Underwriter prior
to the Commencement Date pursuant to the engagement letter between the Company and such Qualified Independent Underwriter.
Section
6.16. Disclosure Schedule.
(i)
The Company may, from time to time, update the Disclosure Schedule as may be required to satisfy the conditions set forth in Section
7.2(i) and Section 7.3(i) (to the extent such condition set forth in Section 7.3(i) relates to the condition in Section 7.2(i) as of
a specific Purchase Condition Satisfaction Time). For purposes of this Section 6.16, any disclosure made in a schedule to the Compliance
Certificate shall be deemed to be an update of the Disclosure Schedule. Notwithstanding anything in this Agreement to the contrary, no
update to the Disclosure Schedule pursuant to this Section 6.16 shall cure any breach of a representation or warranty of the Company
contained in this Agreement and made prior to the update and shall not affect any of the Investor’s rights or remedies with respect
thereto.
(ii)
Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information and disclosure
contained in any Schedule of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other
Schedule of the Disclosure Schedule as though fully set forth in such Schedule for which applicability of such information and
disclosure is readily apparent on its face. The fact that any item of information is disclosed in the Disclosure Schedule shall not
be construed to mean that such information is required to be disclosed by this Agreement. Except as expressly set forth in this
Agreement, such information and the thresholds (whether based on quantity, qualitative characterization, dollar amounts or
otherwise) set forth herein shall not be used as a basis for interpreting the terms “material” or “Material
Adverse Effect” or other similar terms in this Agreement.
Section
6.17. Delivery of Compliance Certificates, Bring-Down Negative Assurance Letters, Bring-Down CFO Certificates and Bring-Down
Comfort Letters Upon Occurrence of Certain Events. Within three (3) Trading Days immediately following: (i) each date on
which the Company files with the Commission (A) an annual report on Form 10-K under the Exchange Act, (B) a Form 10-K/A containing
amended (or restated) financial information or a material amendment to a previously filed annual report on Form 10-K, (C) a
quarterly report on Form 10-Q under the Exchange Act, or (D) a current report on Form 8-K containing amended (or restated) financial
information (other than information “furnished” pursuant to Items 2.02 or 7.01 of Form 8-K or to provide disclosure
pursuant to Item 8.01 of Form 8-K relating to the reclassification of certain properties as discontinued operations in accordance
with Statement of Financial Accounting Standards No. 144) under the Exchange Act; and (ii) the effective date of (A) each
post-effective amendment to the Initial Registration Statement, (B) each New Registration Statement and (C) each post-effective
amendment to each New Registration Statement, and in any case, not more than once per calendar quarter (each, a
“Representation Date”), the Company shall (I) deliver to the Investor a Compliance Certificate, dated the
date of delivery to the Investor, (II) cause to be furnished to the Investor an opinion and negative assurance letter
“bring-down” from outside counsel to the Company, dated the date of delivery to the Investor, substantially in the form
mutually agreed to by the Company and the Investor prior to the date of this Agreement, modified, as necessary, to relate to a New
Registration Statement or a post-effective amendment to the Initial Registration Statement or a New Registration Statement, and the
Prospectus contained in a Registration Statement or post-effective amendment as then amended or supplemented by any Prospectus
Supplement thereto as of the date of such letter, as applicable (each, a “Bring-Down Negative Assurance
Letter”) and (III) other than with respect to a Representation Date pursuant to clause (i)(C) above, cause to be
furnished to the Investor (A) a customary “comfort letter” provided by the Accountant or a successor independent
registered public accounting firm for the Company (as applicable), dated the date of delivery to the Investor, substantially in the
form, scope and substance as the information contained in the Initial Comfort Letter (to the extent such information is then
applicable), stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other
matters covered by the Initial Comfort Letter (to the extent such financial information or other matters are then applicable),
modified, as necessary, to address such new, amended or restated financial information contained in any of the Commission Documents
referred to in clause (i) above or to relate to a New Registration Statement or a post-effective amendment to the Initial
Registration Statement or a New Registration Statement, or the Prospectus contained in a Registration Statement or post-effective
amendment as then amended or supplemented by any Prospectus Supplement thereto as of the date of such letter, as applicable (each, a
“Bring-Down Comfort Letter”) and (B) a certificate of the Chief Financial Officer, dated the date of
delivery to the Investor, substantially in the form mutually agreed to by the Company and the Investor prior to the date of this
Agreement, modified, as necessary, to relate to a New Registration Statement or a post-effective amendment to the Initial
Registration Statement or a New Registration Statement, and the Prospectus contained in a Registration Statement or post-effective
amendment as then amended or supplemented by any Prospectus Supplement thereto as of the date of such letter, as applicable (each, a
“Bring-Down CFO Certificate”). The requirement to provide the documents identified in the previous
sentence shall be tolled with respect to any Representation Date, if (A) the Company has given written notice to the Investor (with
a copy to its counsel) in accordance with Section 10.4, not later than one (1) Trading Day prior to the applicable Representation
Date, of the Company’s decision to suspend delivery of VWAP Purchase Notices for future VWAP Purchases and delivery of
Intraday VWAP Purchase Notices for future Intraday VWAP Purchases (each, a “Future Purchase Suspension”)
(it being hereby acknowledged and agreed that no Future Purchase Suspension shall limit, alter, modify, change or otherwise affect
any of the Company’s or the Investor’s rights or obligations under the Transaction Documents with respect to any pending
VWAP Purchase and any pending Intraday VWAP Purchase (as applicable) that has not been fully settled in accordance with the terms
and conditions of this Agreement, and that the parties shall fully perform their respective obligations with respect to any such
pending VWAP Purchase and any pending Intraday VWAP Purchase under the Transaction Documents), and (B) such Representation Date does
not occur during the period beginning on the Trading Day immediately preceding the Purchase Date for a VWAP Purchase or an Intraday
VWAP Purchase (as applicable) and ending on the third (3rd) Trading Day following the date of full settlement thereof and
the issuance to the Investor of all of the Shares that are issuable to the Investor pursuant to such VWAP Purchase or such Intraday
VWAP Purchase (as applicable), which tolling shall continue until the Trading Day immediately preceding the Purchase Date for a VWAP
Purchase or an Intraday VWAP Purchase (as applicable), which for such calendar quarter shall be considered a Representation Date.
Notwithstanding the foregoing, if the Company subsequently decides to deliver a VWAP Purchase Notice or an Intraday VWAP Purchase
Notice following a Representation Date when a Future Purchase Suspension was in effect and did not provide the Investor with the
documents identified in clauses (I), (II) and (III) of the first sentence of this Section 6.17, then prior to the Company’s
delivery to the Investor of such VWAP Purchase Notice or such Intraday VWAP Purchase Notice (as applicable) on a Purchase Date, the
Company shall provide the Investor with the documents identified in clauses (I), (II) and (III) of the first sentence of this
Section 6.17, dated as of the applicable Purchase Date.
Article
VII
CONDITIONS TO CLOSING, COMMENCEMENT AND PURCHASES
Section
7.1. Conditions Precedent to Closing. The Closing is subject to the satisfaction of each of the conditions set forth in this
Section 7.1 on the Closing Date.
(i)
Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor contained
in this Agreement (a) that are not qualified by “materiality” shall be true and correct in all material respects as of the
Closing Date, except to the extent such representations and warranties are as of another date, in which case, such representations and
warranties shall be true and correct in all material respects as of such other date and (b) that are qualified by “materiality”
shall be true and correct as of the Closing Date, except to the extent such representations and warranties are as of another date, in
which case, such representations and warranties shall be true and correct as of such other date.
(ii) Accuracy
of the Company’s Representations and Warranties. The representations and warranties of the Company contained in this
Agreement (a) that are not qualified by “materiality” or “Material Adverse Effect” shall be true and correct
in all material respects as of the Closing Date, except to the extent such representations and warranties are as of another date, in
which case, such representations and warranties shall be true and correct in all material respects as of such other date and
(b) that are qualified by “materiality” or “Material Adverse Effect” shall be true and correct as of
the Closing Date, except to the extent such representations and warranties are as of another date, in which case, such
representations and warranties shall be true and correct as of such other date.
(iii)
Payment of Initial Investor Expense Reimbursement; Issuance of Commitment Shares. On or prior to the Closing Date, the
Company shall have paid by wire transfer of immediately available funds to an account designated by the Investor on or prior to the date
hereof, the Initial Investor Expense Reimbursement in accordance with Section 10.1(i), which shall be fully earned and non-refundable
as of the Closing Date, regardless of whether the Commencement occurs or whether any VWAP Purchases or Intraday VWAP Purchases are made
or settled hereunder or any subsequent termination of this Agreement. On the Closing Date, the Company shall deliver irrevocable instructions
to its transfer agent to issue to the Investor, not later than 4:00 p.m. (New York City time) on the second (2nd) Trading
Day immediately following the Closing Date, a book-entry statement representing the Commitment Shares in the name of the Investor or
its designee (in which case such designee name shall have been provided to the Company prior to the Closing Date), in consideration for
the Investor’s execution and delivery of this Agreement. Such book-entry statement shall be delivered to the Investor by email
at its address set forth in Section 10.4 hereof. For the avoidance of doubt, all of the Commitment Shares shall be fully earned as of
the Closing Date, regardless of whether the Commencement occurs or whether any VWAP Purchases or Intraday VWAP Purchases are made or
settled hereunder or any subsequent termination of this Agreement.
(iv)
Closing Deliverables. At the Closing, counterpart signature pages of this Agreement and the Registration Rights Agreement
executed by each of the parties hereto shall be delivered as provided in Section 2.2. Simultaneously with the execution and delivery
of this Agreement and the Registration Rights Agreement, the Investor’s counsel shall have received (a) the opinions of outside
counsel to the Company, dated the Closing Date, in the forms mutually agreed to by the Company and the Investor prior to the date of
this Agreement, (b) the closing certificate from the Company, dated the Closing Date, in the form of Exhibit B hereto, and (c)
a copy of the irrevocable instructions to the Company’s transfer agent regarding the issuance to the Investor or its designee of
the certificate(s) or book-entry statement(s) representing the Commitment Shares pursuant to and in accordance with Section 10.1(ii)(a)
hereof.
Section
7.2. Conditions Precedent to Commencement. The right of the Company to commence delivering VWAP Purchase Notices and Intraday
VWAP Purchase Notices under this Agreement, and the obligation of the Investor to accept VWAP Purchase Notices and Intraday VWAP Purchase
Notices timely delivered to the Investor by the Company under this Agreement, are subject to the initial satisfaction, at Commencement,
of each of the conditions set forth in this Section 7.2.
(i) Accuracy
of the Company’s Representations and Warranties. The representations and warranties of the Company contained in this
Agreement (a) that are not qualified by “materiality” or “Material Adverse Effect” shall have been true and
correct in all material respects when made and shall be true and correct in all material respects as of the Commencement Date with
the same force and effect as if made on such date, except to the extent such representations and warranties are as of another date,
in which case, such representations and warranties shall be true and correct in all material respects as of such other date and
(b) that are qualified by “materiality” or “Material Adverse Effect” shall have been true and correct
when made and shall be true and correct as of the Commencement Date with the same force and effect as if made on such date, except
to the extent such representations and warranties are as of another date, in which case, such representations and warranties shall
be true and correct as of such other date.
(ii)
Performance of the Company. The Company shall have performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied
with by the Company at or prior to the Commencement. The Company shall deliver to the Investor on the Commencement Date the compliance
certificate substantially in the form attached hereto as Exhibit C (the “Compliance Certificate”).
(iii)
Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the
Registrable Securities included therein required to be filed by the Company with the Commission pursuant to Section 2(a) of the Registration
Rights Agreement shall have been declared effective under the Securities Act by the Commission, and the Investor shall be permitted to
utilize the Prospectus therein to resell (i) all of the Commitment Shares and (ii) all of the Shares included in such Prospectus.
(iv)
No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by
the Commission or any other Governmental Entity for any additional information relating to the Initial Registration Statement, the Prospectus
contained therein or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement,
the Prospectus contained therein or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other Governmental Entity
of any stop order suspending the effectiveness of the Initial Registration Statement or prohibiting or suspending the use of the Prospectus
contained therein or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the
Securities for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose;
(c) the objection of FINRA to the terms of the transactions contemplated by the Transaction Documents or (d) the occurrence of any event
or the existence of any condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement,
the Prospectus contained therein or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes
to the statements then made in the Initial Registration Statement, the Prospectus contained therein or any Prospectus Supplement thereto
in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then
made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not
misleading, or which requires an amendment to the Initial Registration Statement or a supplement to the Prospectus contained therein
or any Prospectus Supplement thereto to comply with the Securities Act, or any other applicable law. The Company shall have no Knowledge
of any event that could reasonably be expected to have the effect of causing the suspension of the effectiveness of the Initial Registration
Statement or the prohibition or suspension of the use of the Prospectus contained therein or any Prospectus Supplement thereto in connection
with the resale of the Registrable Securities by the Investor.
(v)
Other Commission Filings. The Current Report shall have been filed with the Commission as required pursuant to Section
2.3. The final Prospectus included in the Initial Registration Statement shall have been filed with the Commission prior to Commencement
in accordance with Section 2.3 and the Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information
and other documents required to have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange
Act, including all material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, prior to Commencement
shall have been filed with the Commission.
(vi)
No Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended
by the Commission, the Trading Market or FINRA (except for any suspension of trading of limited duration agreed to by the Company, which
suspension shall be terminated prior to the Commencement Date), the Company shall not have received any final and non-appealable notice
that the listing or quotation of the Common Stock on the Trading Market shall be terminated on a date certain (unless, prior to such
date certain, the Common Stock is listed or quoted on any other Eligible Market), nor shall there have been imposed any suspension of,
or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to
the Common Stock that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or restriction
on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the Common Stock
is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company in writing
that DTC has determined not to impose any such suspension or restriction).
(vii)
Compliance with Laws. The Company shall have complied with all applicable federal, state and local governmental laws, rules,
regulations and ordinances in connection with the execution, delivery and performance of this Agreement and the other Transaction Documents
to which it is a party and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the Company
shall have obtained all permits and qualifications required by any applicable state securities or “Blue Sky” laws for the
offer and sale of the Securities by the Company to the Investor and the subsequent resale of the Registrable Securities by the Investor
(or shall have the availability of exemptions therefrom).
(viii)
No Injunction. No statute, regulation or Order shall have been enacted, entered, promulgated, threatened or endorsed by
any court or Governmental Entity of competent jurisdiction which prohibits the consummation of or which would materially modify or delay
any of the transactions contemplated by the Transaction Documents.
(ix)
No Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any court or Governmental Entity shall
have been commenced, and no inquiry or investigation by any Governmental Entity shall have been commenced, against the Company, or any
of the officers, directors or Affiliates of the Company, seeking to restrain, prevent or change the transactions contemplated by the
Transaction Documents, or seeking material damages in connection with such transactions.
(x)
Listing of Securities. All of the Securities that have been and may be issued pursuant to this Agreement shall have been
approved for listing or quotation on the Trading Market (or on an Eligible Market) as of the Commencement Date, subject only to notice
of issuance.
(xi)
No Material Adverse Effect. No condition, occurrence, state of facts or event constituting a Material Adverse Effect shall
have occurred and be continuing.
(xii)
No Bankruptcy Proceedings. No Person shall have commenced a proceeding against the Company pursuant to or within the meaning
of any Bankruptcy Law. The Company shall not have, pursuant to or within the meaning of any Bankruptcy Law, (a) commenced a voluntary
case, (b) consented to the entry of an Order for relief against it in an involuntary case, (c) consented to the appointment of a Custodian
of the Company or for all or substantially all of its property, or (d) made a general assignment for the benefit of its creditors. A
court of competent jurisdiction shall not have entered an Order or decree under any Bankruptcy Law that (I) is for relief against the
Company in an involuntary case, (II) appoints a Custodian of the Company or for all or substantially all of its property, or (III) orders
the liquidation of the Company.
(xiii)
Commitment Shares Issued as DWAC Shares. The Company shall have caused the Company’s transfer agent to credit the
Investor’s or its designee’s account at DTC as DWAC Shares such number of shares of Common Stock equal to the number of Commitment
Shares issued to the Investor pursuant to Section 10.1(ii)(a) hereof, in accordance with Section 10.1(iv) hereof.
(xiv)
Delivery of Commencement Irrevocable Transfer Agent Instructions and Notice of Effectiveness. The Commencement Irrevocable
Transfer Agent Instructions shall have been executed by the Company and delivered to acknowledged in writing by the Company’s transfer
agent, and the Notice of Effectiveness relating to the Initial Registration Statement shall have been executed by the Company’s
outside counsel and delivered to the Company’s transfer agent, in each case directing such transfer agent to issue to the Investor
or its designated Broker-Dealer all of the Commitment Shares and all of the Shares included in the Initial Registration Statement as
DWAC Shares in accordance with this Agreement and the Registration Rights Agreement.
(xv)
Reservation of Shares. As of the Commencement Date, the Company shall have reserved out of its authorized and unissued
Common Stock, 3,209,360 shares of Common Stock solely for the purpose of issuing Shares pursuant to VWAP Purchases and Intraday VWAP
Purchases that may be effected by the Company, in its sole discretion, from and after the Commencement Date under this Agreement.
(xvi)
Opinions and Negative Assurances of Company Counsel. On the Commencement Date, the Investor shall have received the opinions
and negative assurances from outside counsel to the Company, dated the Commencement Date, in the forms mutually agreed to by the Company
and the Investor prior to the date of this Agreement.
(xvii)
Initial Comfort Letter of Company Auditor. On the Commencement Date, the Investor shall have received from the Accountant,
or a successor independent registered public accounting firm for the Company (as applicable), a letter dated the Commencement Date and
addressed to the Investor, in substantially the form, scope and substance mutually agreed to by the Company and the Investor at least
one (1) Trading Day prior to the date on which the Initial Registration Statement is first filed with the Commission, stating the conclusions
and findings of such firm with respect to the audited and unaudited financial statements and certain financial information contained
or incorporated by reference in the Registration Statement and the Prospectus (as supplemented by any Prospectus Supplement filed with
the Commission on or prior to the Commencement Date), and certain other matters customarily covered by auditor “comfort letters”
(the “Initial Comfort Letter”).
(xviii)
CFO Certificate. On the Commencement Date, the Investor shall have received from the Company, a certificate of the
Chief Financial Officer dated the Commencement Date, in the form mutually agreed to by the Company and the Investor prior to the date
of this Agreement.
(xix)
FINRA No Objections. Prior to the Commencement Date, FINRA’s Corporate Financing Department shall have confirmed
in writing that it has determined not to raise any objection with respect to the fairness and reasonableness of the terms and arrangements
of the transactions contemplated by the Transaction Documents.
Section
7.3. Conditions Precedent to Purchases after Commencement Date. The right of the Company to deliver VWAP Purchase Notices
and Intraday VWAP Purchase Notices under this Agreement after the Commencement Date, and the obligation of the Investor to accept VWAP
Purchase Notices and Intraday VWAP Purchase Notices timely delivered to the Investor by the Company under this Agreement after the Commencement
Date, are subject to the satisfaction of each of the conditions set forth in this Section 7.3, (X) with respect to a VWAP Purchase Notice
for a VWAP Purchase that is timely delivered by the Company to the Investor in accordance with this Agreement, as of the VWAP Purchase
Commencement Time of the applicable VWAP Purchase Period for such VWAP Purchase to be effected pursuant to such VWAP Purchase Notice
and (Y) with respect to an Intraday VWAP Purchase Notice for an Intraday VWAP Purchase that is timely delivered by the Company to the
Investor in accordance with this Agreement, as of the Intraday VWAP Purchase Commencement Time of the applicable Intraday VWAP Purchase
Period for such Intraday VWAP Purchase to be effected pursuant to such Intraday VWAP Purchase Notice (each such VWAP Purchase Commencement
Time (with respect to a VWAP Purchase Notice) and each such Intraday VWAP Purchase Commencement Time (with respect to an Intraday VWAP
Purchase Notice), at which time all such conditions must be satisfied, a “Purchase Condition Satisfaction Time”).
(i)
Satisfaction of Certain Prior Conditions. Each of the conditions set forth in subsections (i), (ii), and (vii) through
(xiv) set forth in Section 7.2 shall be satisfied at the applicable Purchase Condition Satisfaction Time after the Commencement Date
(with the terms “Commencement” and “Commencement Date” in the conditions set forth in subsections (i) and (ii)
of Section 7.2 replaced with “applicable Purchase Condition Satisfaction Time”); provided, however, that the
Company shall not be required to deliver the Compliance Certificate after the Commencement Date, except as provided in Section 6.17 and
Section 7.3(x).
(ii)
Initial Registration Statement Effective. The Initial Registration Statement covering the resale by the Investor of the
Registrable Securities included therein filed by the Company with the Commission pursuant to Section 2(a) of the Registration Rights
Agreement, and any post-effective amendment thereto required to be filed by the Company with the Commission after the Commencement Date
and prior to the applicable Purchase Date pursuant to the Registration Rights Agreement, in each case shall have been declared effective
under the Securities Act by the Commission and shall remain effective for the applicable Registration Period, and the Investor shall
be permitted to utilize the Prospectus therein, and any Prospectus Supplement thereto, to resell (a) all of the Commitment Shares, (b)
all of the Shares included in the Initial Registration Statement, and any post-effective amendment thereto, that have been issued and
sold to the Investor hereunder pursuant to all VWAP Purchase Notices and Intraday VWAP Purchase Notices (as applicable) delivered by
the Company to the Investor prior to such applicable Purchase Date and (c) all of the Shares included in the Initial Registration Statement,
and any post-effective amendment thereto, that are issuable pursuant to the applicable VWAP Purchase Notice or Intraday VWAP Purchase
Notice (as applicable) delivered by the Company to the Investor with respect to a VWAP Purchase or an Intraday VWAP Purchase (as applicable)
to be effected hereunder on such applicable Purchase Date.
(iii)
Any Required New Registration Statement Effective. Any New Registration Statement covering the resale by the Investor of
the Registrable Securities included therein, and any post-effective amendment thereto, required to be filed by the Company with the Commission
pursuant to the Registration Rights Agreement after the Commencement Date and prior to the applicable Purchase Date for such VWAP Purchase
or Intraday VWAP Purchase (as applicable), in each case shall have been declared effective under the Securities Act by the Commission
and shall remain effective for the applicable Registration Period, and the Investor shall be permitted to utilize the Prospectus therein,
and any Prospectus Supplement thereto, to resell (a) all of the Commitment Shares (if any) included in such New Registration Statement,
and any post-effective amendment thereto, (b) all of the Shares included in such New Registration Statement, and any post-effective amendment
thereto, that have been issued and sold to the Investor hereunder pursuant to all VWAP Purchase Notices and Intraday VWAP Purchase Notices
(as applicable) delivered by the Company to the Investor prior to such applicable Purchase Date and (c) all of the Shares included in
such new Registration Statement, and any post-effective amendment thereto, that are issuable pursuant to the applicable VWAP Purchase
Notice or Intraday VWAP Purchase Notice (as applicable) delivered by the Company to the Investor with respect to a VWAP Purchase or an
Intraday VWAP Purchase (as applicable) to be effected hereunder on such applicable Purchase Date.
(iv) Delivery
of Subsequent Irrevocable Transfer Agent Instructions and Notice of Effectiveness. With respect to any post-effective
amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New
Registration Statement, in each case declared effective by the Commission after the Commencement Date, the Company shall have
delivered or caused to be delivered to the Company’s transfer agent (a) irrevocable instructions in the form substantially
similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and acknowledged in writing by its
transfer agent and (b) the Notice of Effectiveness, in each case modified as necessary to refer to such Registration Statement or
post-effective amendment and the Registrable Securities included therein, to issue the Registrable Securities included therein as
DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement.
(v)
No Material Notices. None of the following events shall have occurred and be continuing: (a) receipt of any request by
the Commission or any other Governmental Entity for any additional information relating to the Initial Registration Statement or any
post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained
in any of the foregoing or any Prospectus Supplement thereto, or for any amendment of or supplement to the Initial Registration Statement
or any post-effective amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained
in any of the foregoing or any Prospectus Supplement thereto; (b) the issuance by the Commission or any other Governmental Entity of
any stop order suspending the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration
Statement or any post-effective amendment thereto, or prohibiting or suspending the use of the Prospectus contained in any of the foregoing
or any Prospectus Supplement thereto, or of the suspension of qualification or exemption from qualification of the Securities for offering
or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (c) the objection of FINRA
to the terms of the transactions contemplated by the Transaction Documents or (d) the occurrence of any event or the existence of any
condition or state of facts, which makes any statement of a material fact made in the Initial Registration Statement or any post-effective
amendment thereto, any New Registration Statement or any post-effective amendment thereto, or the Prospectus contained in any of the
foregoing or any Prospectus Supplement thereto untrue or which requires the making of any additions to or changes to the statements then
made in the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective
amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto in order to state a material
fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case
of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading, or which requires
an amendment to the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or any post-effective
amendment thereto, or the Prospectus contained in any of the foregoing or any Prospectus Supplement thereto to comply with the Securities
Act, or any other applicable law (other than the transactions contemplated by the applicable VWAP Purchase Notice delivered by the Company
to the Investor with respect to a VWAP Purchase, or the applicable Intraday VWAP Purchase Notice delivered by the Company to the Investor
with respect to an Intraday VWAP Purchase (as applicable) to be effected hereunder on such applicable Purchase Date and the settlement
thereof). The Company shall have no Knowledge of any event that could reasonably be expected to have the effect of causing the suspension
of the effectiveness of the Initial Registration Statement or any post-effective amendment thereto, any New Registration Statement or
any post-effective amendment thereto, or the prohibition or suspension of the use of the Prospectus contained in any of the foregoing
or any Prospectus Supplement thereto in connection with the resale of the Registrable Securities by the Investor.
(vi) Other
Commission Filings. The final Prospectus included in any post-effective amendment to the Initial Registration Statement, and
any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and the
Registration Rights Agreement after the Commencement Date and prior to the applicable Purchase Date for such VWAP Purchase or such
Intraday VWAP Purchase (as applicable), shall have been filed with the Commission in accordance with Section 2.3 and the
Registration Rights Agreement. The final Prospectus included in any New Registration Statement and in any post-effective amendment
thereto, and any Prospectus Supplement thereto, required to be filed by the Company with the Commission pursuant to Section 2.3 and
the Registration Rights Agreement after the Commencement Date and prior to the applicable Purchase Date for such VWAP Purchase or
such Intraday VWAP Purchase (as applicable), shall have been filed with the Commission in accordance with Section 2.3 and the
Registration Rights Agreement. All reports, schedules, registrations, forms, statements, information and other documents required to
have been filed by the Company with the Commission pursuant to the reporting requirements of the Exchange Act, including all
material required to have been filed pursuant to Section 13(a) or 15(d) of the Exchange Act, after the Commencement Date and prior
to the applicable Purchase Date for such VWAP Purchase or such Intraday VWAP Purchase (as applicable), shall have been filed with
the Commission and, if any Registrable Securities are covered by a Registration Statement on Form S-3, such filings shall have been
made within the applicable time period prescribed for such filing under the Exchange Act.
(vii)
No Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended
by the Commission, the Trading Market (or Eligible Market, as applicable) or FINRA (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the applicable Purchase Date for such VWAP Purchase or such Intraday
VWAP Purchase (as applicable)), the Company shall not have received any final and non-appealable notice that the listing or quotation
of the Common Stock on the Trading Market (or Eligible Market, as applicable) shall be terminated on a date certain (unless, prior to
such date certain, the Common Stock is listed or quoted on any other Eligible Market), nor shall there have been imposed any suspension
of, or restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect
to the Common Stock that is continuing, the Company shall not have received any notice from DTC to the effect that a suspension of, or
restriction on, accepting additional deposits of the Common Stock, electronic trading or book-entry services by DTC with respect to the
Common Stock is being imposed or is contemplated (unless, prior to such suspension or restriction, DTC shall have notified the Company
in writing that DTC has determined not to impose any such suspension or restriction).
(viii) Certain
Limitations. The issuance and sale of the Shares issuable pursuant to the applicable VWAP Purchase Notice or the applicable
Intraday VWAP Purchase Notice (as applicable) shall not (a) exceed, in the case of a VWAP Purchase Notice, the VWAP Purchase Maximum
Amount applicable to such VWAP Purchase Notice or, in the case of an Intraday VWAP Purchase Notice, the Intraday VWAP Purchase
Maximum Amount applicable to such Intraday VWAP Purchase Notice, (b) cause the aggregate number of shares of Common Stock issued
pursuant to this Agreement to exceed the Aggregate Limit, (c) cause the Investor to beneficially own (under Section 13(d) of the
Exchange Act and Rule 13d-3 promulgated thereunder) shares of Common Stock in excess of the Beneficial Ownership Limitation, or (d)
if and to the extent the Exchange Cap is then applicable under Section 3.4, cause the aggregate number of shares of Common Stock
issued pursuant to this Agreement to exceed the Exchange Cap, unless in the case of this clause (d), the Company’s
stockholders have theretofore approved the issuance of such shares of Common Stock in excess of the Exchange Cap in accordance with
the applicable rules of the Trading Market.
(ix)
Shares Authorized and Delivered. All of the Shares issuable pursuant to the applicable VWAP Purchase Notice or Intraday
VWAP Purchase Notice (as applicable) shall have been duly authorized by all necessary corporate action of the Company. All Shares relating
to all prior VWAP Purchase Notices and all prior Intraday VWAP Purchase Notices required to have been received by the Investor as DWAC
Shares under this Agreement prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday
VWAP Purchase (as applicable) shall have been delivered to the Investor as DWAC Shares in accordance with this Agreement.
(x)
Bring-Down Negative Assurance Letters; Bring-Down Comfort Letters; Bring-Down CFO Certificates; and Compliance Certificates.
The Investor shall have received (a) all Bring-Down Negative Assurance Letters from outside counsel to the Company, which the Company
was obligated to instruct its outside counsel to deliver to the Investor prior to the applicable Purchase Condition Satisfaction Time
for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable), (b) all Bring-Down Comfort Letters from the Accountant, or
a successor independent registered public accounting firm for the Company (as applicable), which the Company was obligated to instruct
such firm to deliver to the Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or
Intraday VWAP Purchase (as applicable), (c) all Bring-Down CFO Certificates from the Company, which the Company was obligated to deliver
to the Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase
(as applicable), and (d) all Compliance Certificates from the Company that the Company was obligated to deliver to the Investor prior
to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable), in
each case in accordance with Section 6.17.
(xi) Payment
of Cash Make-Whole Payment, Additional Investor Expense Reimbursement and Cash Commitment Fee. The Company shall have paid,
by wire transfer of immediately available funds to an account designated by the Investor, (a) all or such portion of the Cash
Make-Whole Payment (as applicable and required pursuant to Section 10.1(ii)(c)) that the Company was obligated to pay to the
Investor prior to the applicable Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as
applicable) in accordance with Section 10.1(ii)(c), which Cash Make-Whole Payment shall be fully earned and non-refundable as of the
date such Cash Make-Whole Payment is made by the Company to the Investor (as applicable), regardless of whether any additional VWAP
Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement, and (b) all
Additional Investor Expense Reimbursement payments that the Company was obligated to pay to the Investor prior to the applicable
Purchase Condition Satisfaction Time for the applicable VWAP Purchase or Intraday VWAP Purchase (as applicable) in accordance with
Section 10.1(i), each of which Additional Investor Expense Reimbursement payments shall be fully earned and non-refundable as of the
date such payments are made by the Company to the Investor, regardless of whether any additional VWAP Purchases or Intraday VWAP
Purchases are made or settled hereunder or any subsequent termination of this Agreement. Prior to the applicable Purchase Condition
Satisfaction Time for any VWAP Purchase or any Intraday VWAP Purchase occurring after the date on which the first VWAP Purchase
effected by the Company pursuant to this Agreement is fully settled in accordance with Section 3.3 (or, if the Company effects an
Intraday VWAP Purchase prior to the first VWAP Purchase effected pursuant to this Agreement, the date on which the first Intraday
VWAP Purchase effected by the Company pursuant to this Agreement is fully settled in accordance with Section 3.3), the Cash
Commitment Fee shall have been paid to the Investor in the manner, at such time and otherwise pursuant to and in accordance with
Section 10.1(ii)(b). For the avoidance of doubt, the Cash Commitment Fee shall be fully earned by the Investor as of the Closing
Date and shall be non-refundable as of the date such Cash Commitment Fee is paid to the Investor as set forth in Section
10.1(ii)(b), regardless of whether any additional VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any
subsequent termination of this Agreement.
Article
VIII
TERMINATION
Section
8.1. Automatic Termination. Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically
on the earliest to occur of (i) the first day of the month next following the 24-month anniversary of the Commencement Date, (ii) the
date on which the Investor shall have purchased from the Company, pursuant to all VWAP Purchases and Intraday VWAP Purchases that have
occurred and fully settled pursuant to this Agreement, an aggregate number of Shares for a total aggregate gross purchase price to the
Company equal to the Total Commitment, (iii) the date on which the Common Stock shall have failed to be listed or quoted on the Trading
Market or any Eligible Market for a period of one (1) Trading Day, (iv) the thirtieth (30th) Trading Day next following the
date on which, pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences
a proceeding against the Company, in each case that is not discharged or dismissed prior to such thirtieth (30th) Trading
Day, and (v) the date on which, pursuant to or within the meaning of any Bankruptcy Law, a Custodian is appointed for the Company or
for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors.
Section
8.2. Other Termination. Subject to Section 8.3, the Company may terminate this Agreement after the Commencement Date
effective upon ten (10) Trading Days’ prior written notice to the Investor in accordance with Section 10.4; provided, however,
that (i) the Company shall have (A) issued all of the Commitment Shares required to be issued to the Investor, paid the Cash
Commitment Fee required to be paid to the Investor (to the extent the full amount of the Cash Commitment Fee shall not theretofore
have been withheld by the Investor from the total aggregate VWAP Purchase Price payable by the Investor to the Company in connection
with the first VWAP Purchase (or the first Intraday VWAP Purchase, as applicable) effected by the Company pursuant to this
Agreement), and paid all or such portion of the Cash Make-Whole Payment required to be paid to the Investor (as applicable), in each
case pursuant to Section 10.1(ii) of this Agreement, and (B) paid the Initial Investor Expense Reimbursement and all Additional
Investor Expense Reimbursement payments required to be paid to the Investor pursuant to Section 10.1(i) of this Agreement, in each
case in this clause (i) prior to such termination, and (ii) prior to issuing any press release, or making any public statement or
announcement, with respect to such termination, the Company shall consult with the Investor and its counsel on the form and
substance of such press release or other disclosure. Subject to Section 8.3, this Agreement may be terminated at any time by the
mutual written consent of the parties, effective as of the date of such mutual written consent unless otherwise provided in such
written consent. Subject to Section 8.3, the Investor shall have the right to terminate this Agreement effective upon ten (10)
Trading Days’ prior written notice to the Company in accordance with Section 10.4, if: (a) any condition, occurrence, state of
facts or event constituting a Material Adverse Effect has occurred and is continuing; (b) a Fundamental Transaction shall have
occurred; (c) the Initial Registration Statement and any New Registration Statement is not filed by the applicable Filing Deadline
therefor or declared effective by the Commission by the applicable Effectiveness Deadline (as defined in the Registration Rights
Agreement) therefor, or the Company is otherwise in breach or default in any material respect under any of the other provisions of
the Registration Rights Agreement, and, if such failure, breach or default is capable of being cured, such failure, breach or
default is not cured within ten (10) Trading Days after notice of such failure, breach or default is delivered to the Company
pursuant to Section 10.4; (d) while a Registration Statement, or any post-effective amendment thereto, is required to be maintained
effective pursuant to the terms of the Registration Rights Agreement and the Investor holds any Registrable Securities, the
effectiveness of such Registration Statement, or any post-effective amendment thereto, lapses for any reason (including, without
limitation, the issuance of a stop order by the Commission) or such Registration Statement or any post-effective amendment thereto,
the Prospectus contained therein or any Prospectus Supplement thereto otherwise becomes unavailable to the Investor for the resale
of all of the Registrable Securities included therein in accordance with the terms of the Registration Rights Agreement, and such
lapse or unavailability continues for a period of forty-five (45) consecutive Trading Days or for more than an aggregate of ninety
(90) Trading Days in any 365-day period, other than due to acts of the Investor; (e) trading in the Common Stock on the Trading
Market (or if the Common Stock is then listed on an Eligible Market, trading in the Common Stock on such Eligible Market) shall have
been suspended and such suspension continues for a period of five (5) consecutive Trading Days; or (f) the Company is in material
breach or default of this Agreement, and, if such breach or default is capable of being cured, such breach or default is not cured
within ten (10) Trading Days after notice of such breach or default is delivered to the Company pursuant to Section 10.4. Unless
notification thereof is required elsewhere in this Agreement (in which case such notification shall be provided in accordance with
such other provision), the Company shall promptly (but in no event later than twenty-four (24) hours) notify the Investor (and, if
required under applicable law, including, without limitation, Regulation FD promulgated by the Commission, or under the applicable
rules and regulations of the Trading Market (or Eligible Market, as applicable), the Company shall publicly disclose such
information in accordance with Regulation FD and the applicable rules and regulations of the Trading Market (or Eligible Market, as
applicable)) upon becoming aware of any of the events set forth in the immediately preceding sentence.
Section
8.3. Effect of Termination. In the event of termination by the Company or the Investor (other than by mutual termination)
pursuant to Section 8.2, written notice thereof shall forthwith be given to the other party as provided in Section 10.4 and the
transactions contemplated by this Agreement shall be terminated without further action by either party. If this Agreement is
terminated as provided in Section 8.1 or Section 8.2, this Agreement shall become void and of no further force and effect, except
that (i) the provisions of Article V (Representations, Warranties and Covenants of the Company), Article IX (Indemnification),
Article X (Miscellaneous) and this Article VIII (Termination) shall remain in full force and effect indefinitely notwithstanding
such termination, and, (ii) so long as the Investor owns any Securities, the covenants and agreements of the Company contained in
Article VI (Additional Covenants) shall remain in full force and notwithstanding such termination for a period of six (6) months
following such termination. Notwithstanding anything in this Agreement to the contrary, no termination of this Agreement by any
party shall (i) become effective prior to the fifth (5th) Trading Day immediately following the settlement date related
to any pending VWAP Purchase or any pending Intraday VWAP Purchase (as applicable) that has not been fully settled in accordance
with the terms and conditions of this Agreement (it being hereby acknowledged and agreed that no termination of this Agreement shall
limit, alter, modify, change or otherwise affect any of the Company’s or the Investor’s rights or obligations under the
Transaction Documents with respect to any pending VWAP Purchase and any pending Intraday VWAP Purchase (as applicable), and that the
parties shall fully perform their respective obligations with respect to any such pending VWAP Purchase and any pending Intraday
VWAP Purchase under the Transaction Documents), (ii) limit, alter, modify, change or otherwise affect the Company’s or the
Investor’s rights or obligations under the Registration Rights Agreement, all of which shall survive any such termination,
(iii) affect any (A) Commitment Shares issued or issuable to the Investor pursuant to Section 10.1(ii)(a), all of which Commitment
Shares shall be fully earned by the Investor as of the Closing Date, or (B) Cash Make-Whole Payment paid or payable to the Investor
pursuant to Section 10.1(ii)(c), which Cash Make-Whole Payment shall be fully earned by the Investor and non-refundable as of the
date such Cash Make-Whole Payment is made by the Company to the Investor (as applicable), in each case of this clause (iii)
regardless of whether the Commencement shall have occurred, whether any VWAP Purchases or Intraday VWAP Purchases are made or
settled hereunder or any subsequent termination of this Agreement, (iv) affect the Cash Commitment Fee payable to the Investor
pursuant to Section 10.1(ii)(b), it being hereby acknowledged and agreed that the entire amount of the Cash Commitment Fee shall be
fully earned by the Investor as of the Closing Date and shall be non-refundable as of the date such Cash Commitment Fee is paid to
the Investor, in the manner, at such time and otherwise pursuant to and in accordance with Section 10.1(ii)(b), regardless of
whether any additional VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this
Agreement, (v) affect the Initial Investor Expense Reimbursement payable or paid to the Investor, all of which Initial Investor
Expense Reimbursement shall be fully earned by the Investor and non-refundable when paid on the Closing Date pursuant to Section
10.1(i), regardless of whether the Commencement shall have occurred, whether any VWAP Purchases or Intraday VWAP Purchases are made
or settled hereunder or any subsequent termination of this Agreement, and (vi) affect any Additional Investor Expense Reimbursement
payments payable or paid to the Investor, all of which Additional Investor Expense Reimbursement payments shall be fully earned by
the Investor and non-refundable when paid by the Company to the Investor pursuant to Section 10.1(i), regardless of whether any
additional VWAP Purchases or Intraday VWAP Purchases are made or settled hereunder or any subsequent termination of this Agreement.
Nothing in this Section 8.3 shall be deemed to release the Company or the Investor from any liability for any breach or default
under this Agreement or any of the other Transaction Documents to which it is a party, or to impair the rights of the Company and
the Investor to compel specific performance by the other party of its obligations under the Transaction Documents to which it is a
party.
Article
IX
INDEMNIFICATION
Section
9.1. Indemnification of Investor. In consideration of the Investor’s execution and delivery of this Agreement and
acquiring the Securities hereunder and in addition to all of the Company’s other obligations under the Transaction Documents
to which it is a party, subject to the provisions of this Section 9.1, the Company shall indemnify and hold harmless the Investor,
each of its directors, officers, stockholders, members, partners, employees, representatives, agents and advisors (and any other
Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other
title), each Person, if any, who controls the Investor (within the meaning of Section 15 of the Securities Act or Section 20(a) of
the Exchange Act), and the respective directors, officers, stockholders, members, partners, employees, representatives, agents and
advisors (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such
title or any other title) of such controlling Persons (each, an “Investor Party”), from and against all
losses, liabilities, obligations, claims, contingencies, damages, costs and expenses (including all judgments, amounts paid in
settlement, court costs, reasonable and documented attorneys’ fees and costs of defense and investigation) (collectively,
“Damages”) that any Investor Party may suffer or incur as a result of or relating to (a) any breach of any
of the representations, warranties, covenants or agreements made by the Company in this Agreement, the Registration Rights Agreement
or in the other Transaction Documents to which it is a party or (b) any action, suit, claim or proceeding (including for these
purposes a derivative action brought on behalf of the Company) instituted against such Investor Party arising out of or resulting
from the execution, delivery, performance or enforcement of the Transaction Documents, other than claims for indemnification within
the scope of Section 6 of the Registration Rights Agreement; provided, however, that (x) the foregoing indemnity shall
not apply to any Damages to the extent, but only to the extent, that such Damages resulted directly and primarily from a breach of
any of the Investor’s representations, warranties, covenants or agreements contained in this Agreement or the Registration
Rights Agreement, and (y) the Company shall not be liable under subsection (b) of this Section 9.1 to the extent, but only to the
extent, that a court of competent jurisdiction shall have determined by a final judgment (from which no further appeals are
available) that such Damages resulted directly and primarily from any acts or failures to act, undertaken or omitted to be taken by
such Investor Party through its fraud, bad faith, gross negligence, or willful or reckless misconduct.
The
Company shall reimburse any Investor Party promptly upon demand (with accompanying presentation of sufficiently detailed documentary
evidence) for all reasonable and documented legal and other costs and expenses incurred by such Investor Party in connection with (i)
any action, suit, claim or proceeding, whether at law or in equity, to enforce compliance by the Company with any provision of the Transaction
Documents or (ii) any other any action, suit, claim or proceeding, whether at law or in equity, with respect to which it is entitled
to indemnification under this Section 9.1; provided that the Investor shall promptly reimburse the Company for all such legal
and other costs and expenses to the extent a court of competent jurisdiction determines that any Investor Party was not entitled to such
reimbursement.
An
Investor Party’s right to indemnification or other remedies based upon the representations, warranties, covenants and agreements
of the Company set forth in the Transaction Documents shall not in any way be affected by any investigation or knowledge of such Investor
Party. Such representations, warranties, covenants and agreements shall not be affected or deemed waived by reason of the fact that an
Investor Party knew or should have known that any representation or warranty might be inaccurate or that the Company failed to comply
with any agreement or covenant. Any investigation by such Investor Party shall be for its own protection only and shall not affect or
impair any right or remedy hereunder.
To
the extent that the foregoing undertakings by the Company set forth in this Section 9.1 may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of the Damages which is permissible under applicable law.
Section
9.2. Indemnification Procedures. Promptly after an Investor Party receives notice of a claim or the commencement of an action
for which the Investor Party intends to seek indemnification under Section 9.1, the Investor Party will notify the Company in writing
of the claim or commencement of the action, suit or proceeding; provided, however, that failure to notify the Company will
not relieve the Company from liability under Section 9.1, except to the extent it has been materially prejudiced by the failure to give
notice. The Company will be entitled to participate in the defense of any claim, action, suit or proceeding as to which indemnification
is being sought, and if the Company acknowledges in writing the obligation to indemnify the Investor Party against whom the claim or
action is brought, the Company may (but will not be required to) assume the defense against the claim, action, suit or proceeding with
counsel satisfactory to it. After the Company notifies the Investor Party that the Company wishes to assume the defense of a claim, action,
suit or proceeding, the Company will not be liable for any further legal or other expenses incurred by the Investor Party in connection
with the defense against the claim, action, suit or proceeding except that if, in the opinion of counsel to the Investor Party, it would
be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and such
Investor Party. In such event, the Company will pay the reasonable and documented fees and expenses of no more than one separate counsel
for all such Investor Parties promptly as such fees and expenses are incurred. Each Investor Party, as a condition to receiving indemnification
as provided in Section 9.1, will cooperate in all reasonable respects with the Company in the defense of any action or claim as to which
indemnification is sought. The Company will not be liable for any settlement of any action effected without its prior written consent,
which consent shall not be unreasonably withheld, delayed or conditioned. The Company will not, without the prior written consent of
the Investor Party, which consent shall not be unreasonably withheld, delayed or conditioned, effect any settlement of a pending or threatened
action with respect to which an Investor Party is, or is informed that it may be, made a party and for which it would be entitled to
indemnification, unless the settlement includes an unconditional release of the Investor Party from all liability and claims which are
the subject matter of the pending or threatened action.
The
remedies provided for in this Article IX are not exclusive and shall not limit any rights or remedies which may otherwise be available
to any Investor Party at law or in equity.
Article
X
MISCELLANEOUS
Section
10.1. Certain Fees and Expenses; Commitment Fee; Commencement Irrevocable Transfer Agent Instructions.
(i) Certain
Fees and Expenses. Each party shall bear its own fees and expenses related to the transactions contemplated by this
Agreement; provided, however, that the Company, (1) on or prior to the Closing Date, shall have paid to the Investor,
by wire transfer of immediately available funds to an account designated by the Investor prior to the date of this Agreement, in an
amount of up to $75,000 as reimbursement for the reasonable and documented fees and disbursements of the Investor’s legal
counsel incurred by the Investor prior to the Closing (the “Initial Investor Expense Reimbursement”), and
(2) within ten (10) Business Days after each Representation Date (provided a Future Purchase Suspension is not then in effect),
shall have paid to the Investor, by wire transfer of immediately available funds to an account designated by the Investor, an
additional $5,000 per fiscal quarter as reimbursement for the reasonable fees and disbursements of the Investor’s legal
counsel incurred by the Investor in connection with the Investor’s ongoing due diligence and review of deliverables subject to
Section 6.17 (the “Additional Investor Expense Reimbursement”), in each case in connection with the
transactions contemplated by this Agreement and the Registration Rights Agreement. For the avoidance of doubt, (1) the Initial
Investor Expense Reimbursement shall be fully earned by the Investor and shall be non-refundable as of the Closing Date, regardless
of whether the Commencement shall have occurred, any VWAP Purchases or Intraday VWAP Purchases are effected by the Company or
settled hereunder or any subsequent termination of this Agreement and (2) each Additional Investor Expense Reimbursement payment
shall be fully earned by the Investor and shall be non-refundable when paid in accordance with this Section 10.1(i), regardless of
whether any additional VWAP Purchases or Intraday VWAP Purchases are effected by the Company or settled hereunder or any subsequent
termination of this Agreement. The Company shall pay all U.S. federal, state and local stamp and other similar transfer and other
taxes and duties levied in connection with issuance of the Securities pursuant hereto.
(ii)
Commitment Fee. In consideration of for the Investor’s execution and delivery of this Agreement, the Company agrees
to pay to the Investor a Commitment Fee of 1.75% of the Aggregate Commitment Amount, in the form of the Cash Commitment Fee and the Commitment
Shares.
(a)
Commitment Shares. In partial consideration for the Investor’s execution and delivery of this Agreement, concurrently
with the execution and delivery of this Agreement on the Closing Date, the Company shall deliver irrevocable instructions to its transfer
agent to issue to the Investor, not later than 4:00 p.m. (New York City time) on the second (2nd) Trading Day immediately
following the Closing Date, one or more certificate(s) or book-entry statement(s) representing the Commitment Shares in the name of the
Investor or its designee (in which case such designee name shall have been provided to the Company prior to the Closing Date). Such certificate
or book-entry statement shall be delivered to the Investor by overnight courier at its address set forth in Section 10.4. For the avoidance
of doubt, all of the Commitment Shares shall be fully earned as of the Closing Date, regardless of whether the Commencement shall have
occurred, any VWAP Purchases or Intraday VWAP Purchases are effected by the Company or settled hereunder or any subsequent termination
of this Agreement. Upon issuance pursuant to this Section 10.1(ii)(a), the Commitment Shares shall constitute “restricted securities”
as such term is defined in Rule 144(a)(3) under the Securities Act and, subject to the provisions of subsection (iv) of this Section
10.1, the certificate or book-entry statement representing the Commitment Shares shall bear the restrictive legend set forth below in
subsection (iii) of this Section 10.1. The Commitment Shares shall constitute Registrable Securities and shall be included in the Initial
Registration Statement and any post-effective amendment thereto, and the Prospectus included therein, and, if necessary to register the
resale thereof by the Investor under the Securities Act, in any New Registration Statement and any post-effective amendment thereto,
and the Prospectus included therein, in each case in accordance with this Agreement and the Registration Rights Agreement.
(b)
Cash Commitment Fee. In partial consideration for the Investor’s execution and delivery of this Agreement, the Company
shall pay to the Investor the Cash Commitment Fee in the manner, at such time and otherwise as set forth in this Section 10.1(ii)(b).
As set forth in Section 3.3, on the settlement date of first VWAP Purchase effected by the Company pursuant to this Agreement, or, if
the Company effects an Intraday VWAP Purchase prior to the first VWAP Purchase effected pursuant to this Agreement, on the settlement
date of the first Intraday VWAP Purchase effected by the Company pursuant to this Agreement, the Investor shall withhold an amount in
cash equal to the Cash Commitment Fee from the total aggregate VWAP Purchase Price payable by the Investor to the Company in connection
with such first VWAP Purchase effected by the Company pursuant to this Agreement, or, if the Company effects an Intraday VWAP Purchase
prior to the first VWAP Purchase effected pursuant to this Agreement, then the Investor shall withhold an amount in cash equal to the
Cash Commitment Fee from the total aggregate Intraday VWAP Purchase Price payable by the Investor to the Company in connection with such
first Intraday VWAP Purchase effected by the Company pursuant to this Agreement, without duplication, as payment by the Company to the
Investor of the Cash Commitment Fee pursuant to this Section 10.1(ii)(b), and upon such withholding by the Investor of such cash amount
equal to the Cash Commitment Fee from such total aggregate VWAP Purchase Price or from such total aggregate Intraday VWAP Purchase Price,
as applicable, payable by the Investor to the Company pursuant to this Agreement, the Investor shall not withhold any additional cash
amounts from the total aggregate purchase prices payable by the Investor to the Company in connection with any VWAP Purchase or Intraday
VWAP Purchase effected pursuant to this Agreement. For the avoidance of doubt, (x) the Cash Commitment Fee shall be fully earned by the
Investor as of the Closing Date and shall be non-refundable when withheld by the Investor (or when paid by the Company to the Investor,
as applicable) in accordance with Section 3.3 and this Section 10.1(ii)(b), regardless of whether any additional VWAP Purchases or Intraday
VWAP Purchases are effected by the Company or settled hereunder or any subsequent termination of this Agreement, and (y) in the event
that the Commencement shall not occur under this Agreement or, if the Commencement shall occur, in the event that no VWAP Purchase or
Intraday VWAP Purchase is effected pursuant to this Agreement prior to the termination of this Agreement pursuant to Article VIII, then,
in either case, upon the termination of this Agreement pursuant to Article VIII, the Company shall pay the Cash Commitment Fee to the
Investor, by wire transfer of immediately available funds to an account designated by the Investor, not later than 5:00 p.m., New York
City time, on the third (3rd) the Trading Day immediately following the date of termination of this Agreement pursuant to
Article VIII.
(c) Cash
Make-Whole Payment. In addition to the issuance of the Commitment Shares to the Investor pursuant to Section 10.1(ii)(a)
above and the payment of the Cash Commitment Fee to the Investor pursuant to Section 10.1(ii)(b) above, if, after the resale of all
Commitment Shares by the Investor after the Commencement Date, the aggregate amount of cash proceeds from the resale of all of the
Commitment Shares by the Investor is less than $100,000, then, the Company shall promptly upon the Investor’s presentation to
the Company of an invoice and reasonable supporting documentation (but in no event later than two (2) Trading Days thereafter), and
as directed by the Investor in writing to the Company, pay to the Investor, in cash, the difference between (i) $100,000 and (ii)
the aggregate amount of the net proceeds received by the Investor from the resale of all of the Commitment Shares by the Investor
(such cash payment, the “Cash Make-Whole Payment”). If, after the Commencement Date, (A) any Commitment
Shares have not been resold by the Investor prior to the earliest of (1) the effective date of any termination of this Agreement by
the Company or the Investor in accordance with Article VIII of this Agreement, (2) the 121st calendar day immediately
following the Effective Date of the Initial Registration Statement filed by the Company with the Commission pursuant to this
Agreement and the Registration Rights Agreement, (3) the calendar day immediately following the date on which the effectiveness of
the Initial Registration Statement lapses for any reason (including due to the issuance of a stop order by the Commission), or the
Initial Registration Statement or Prospectus relating thereto otherwise becomes unavailable to the Investor for the resale of all of
the Commitment Shares included therein for any reason, and (4) such time that the Common Stock has not traded on the Trading Market
(or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market) for greater than three (3) Trading Days,
whether due to a de-listing of the Common Stock from the Trading Market (or, from such Eligible Market, as applicable), or due to a
complete cessation of trading on the Trading Market (or, on such Eligible Market, as applicable), in each case other than due to the
Investor’s material breach of its obligations under this Agreement, and (B) the aggregate amount of cash proceeds from the
resale of all Commitment Shares that have been resold by the Investor prior to such earliest date in clause (A) of this sentence (if
any) is less than $100,000, then, the Company shall promptly upon the Investor’s presentation to the Company of an invoice and
reasonable supporting documentation (but in no event later than two (2) Trading Days thereafter), and as directed by the Investor in
writing to the Company, pay to the Investor, in cash, the Cash Make-Whole Payment and, upon the Investor’s receipt of such
Cash Make-Whole Payment, the Investor shall promptly (but in no event later than two (2) Trading Days thereafter) return to the
Company for cancellation all of the Commitment Shares then held by the Investor that have not been resold by the Investor prior to
such earliest time. If, for any reason whatsoever, other than due to the Investor’s material breach of its obligations under
the Purchase Agreement or the Registration Rights Agreement (and irrespective of whether or not the Company is in compliance with
its obligations under the Registration Rights Agreement), (I) either (a) the Initial Registration Statement shall not have been
filed by the Company with and declared effective by the Commission prior to the 181st calendar day immediately following
the Closing Date or (b) the Commencement shall not have occurred prior to the 181st calendar day immediately following
the Closing Date, and (II) none of the Commitment Shares that were issued to the Investor pursuant to Section 10.1(ii)(a) of this
Agreement shall have been resold by the Investor prior to such 181st calendar day immediately following the Closing Date,
then, the Company shall promptly upon the Investor’s presentation to the Company of an invoice and reasonable supporting
documentation (but in no event later than two (2) Trading Days thereafter), and as directed by the Investor in writing to the
Company, pay to the Investor, in cash, the Cash Make-Whole Payment and, upon the Investor’s receipt of such Cash Make-Whole
Payment, the Investor shall promptly (but in no event later than two (2) Trading Days thereafter) return to the Company for
cancellation all of the Commitment Shares that were issued to the Investor pursuant to Section 10.1(ii)(a) of this Agreement that
have not been resold by the Investor prior to such 181st calendar day immediately following the Closing Date. The
Investor and the Company acknowledge and agree that the Cash Make-Whole Payment shall not be payable by the Company to the Investor
if, after the Commencement, the aggregate amount of cash proceeds from the resale by the Investor of Commitment Shares is equal to
or greater than $100,000. For the avoidance of doubt, the Cash Make-Whole Payment shall be fully earned and non-refundable as of the
date such Cash Make-Whole Payment is made by the Company to the Investor pursuant to this Section 10.1(ii)(c), as applicable,
regardless of whether the Commencement shall have occurred, whether any VWAP Purchases or Intraday VWAP Purchases are made or
settled hereunder or any subsequent termination of this Agreement.
(iii)
Legends. The certificate(s) or book-entry statement(s) representing the Commitment Shares issued prior to the Effective
Date of the Initial Registration Statement, except as set forth below, shall bear a restrictive legend in substantially the following
form (and stop transfer instructions may be placed against transfer of the Commitment Shares):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS,
UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF COUNSEL, IN A CUSTOMARY FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.
Notwithstanding
the foregoing and for the avoidance of doubt, all Shares to be issued in respect of each VWAP Purchase Notice and all Shares to be issued
in respect of each Intraday VWAP Purchase Notice delivered to the Investor pursuant to this Agreement, in each case shall be issued to
the Investor in accordance with Section 3.3 by crediting the Investor’s or its designees’ account at DTC as DWAC Shares,
and the Company shall not take any action or give instructions to any transfer agent of the Company otherwise.
(iv)
Irrevocable Transfer Agent Instructions; Notice of Effectiveness. On the earlier of (a) the Commencement Date and (b) such
time that the Investor shall request, provided all conditions of Rule 144 are met, the Company shall, no later than two (2) Trading Days
following the delivery by the Investor to the Company or its transfer agent of one or more legended certificates or book-entry statements
representing the Commitment Shares issued to the Investor pursuant to Section 10.1(ii)(a) (which certificates or book-entry statements
the Investor shall promptly deliver on or prior to the first to occur of the events described in clauses (a) and (b) of this sentence),
cause the Company’s transfer agent to credit the Investor’s or its designee’s account at DTC as DWAC Shares such number
of shares of Common Stock equal to the number of Commitment Shares issued to the Investor pursuant to Section 10.1(ii)(a). The Company
shall take all actions to carry out the intent and accomplish the purposes of the immediately preceding sentence, including, without
limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to its transfer agent, and any successor
transfer agent of the Company, as may be requested from time to time by the Investor or necessary or desirable to carry out the intent
and accomplish the purposes of the immediately preceding sentence. On the Effective Date of the Initial Registration Statement and prior
to Commencement, the Company shall deliver or cause to be delivered to its transfer agent (and thereafter, shall deliver or cause to
be delivered to any subsequent transfer agent of the Company), (i) irrevocable instructions executed by the Company and acknowledged
in writing by the Company’s transfer agent (the “Commencement Irrevocable Transfer Agent Instructions”),
together with a written notification from the Company’s outside counsel advising the transfer agent the Initial Registration Statement
has been declared effective by the Commission (the “Notice of Effectiveness”), directing the Company’s
transfer agent to issue to the Investor or its designee all of the Commitment Shares and the Shares included in the Initial Registration
Statement as DWAC Shares in accordance with this Agreement and the Registration Rights Agreement. With respect to any post-effective
amendment to the Initial Registration Statement, any New Registration Statement or any post-effective amendment to any New Registration
Statement, in each case declared effective by the Commission after the Commencement Date, the Company shall deliver or cause to be delivered
to its transfer agent (and thereafter, shall deliver or cause to be delivered to any subsequent transfer agent of the Company) (i) irrevocable
instructions in the form substantially similar to the Commencement Irrevocable Transfer Agent Instructions executed by the Company and
acknowledged in writing by the Company’s transfer agent and (ii) the Notice of Effectiveness, in each case modified as necessary
to refer to such Registration Statement or post-effective amendment and the Registrable Securities included therein, to issue the Registrable
Securities included therein as DWAC Shares in accordance with the terms of this Agreement and the Registration Rights Agreement. For
the avoidance of doubt, all Shares and Commitment Shares to be issued and delivered from and after Commencement to or for the benefit
of the Investor pursuant to this Agreement shall be issued and delivered to the Investor or its designee only as DWAC Shares. The Company
represents and warrants to the Investor that, while this Agreement is effective, no instruction other than those referred to in this
Section 10.1(iv) will be given by the Company to its transfer agent, or any successor transfer agent of the Company, with respect to
the Shares and the Commitment Shares from and after Commencement, and the Shares and the Commitment Shares covered by the Initial Registration
Statement or any post-effective amendment thereof, or any New Registration Statement or post-effective amendment thereof, as applicable,
shall otherwise be freely transferable on the books and records of the Company and no stop transfer instructions shall be maintained
against the transfer thereof. The Company agrees that if the Company fails to fully comply with the provisions of this Section 10.1(iv)
within three (3) Trading Days after the date on which the Investor has provided the deliverables referred to above that the Investor
is required to provide to the Company or its transfer agent, the Company shall, at the Investor’s written instruction, purchase
from the Investor all shares of Common Stock acquired by the Investor pursuant to this Agreement that contain the restrictive legend
referred to in Section 10.1(iii) hereof (or any similar restrictive legend), or that have any stop transfer orders maintained that prohibit
or impede the transfer thereof in any respect, at the greater of (i) the purchase price paid for such shares of Common Stock (as applicable)
and (ii) the Closing Sale Price of the Common Stock on the date of the Investor’s written instruction.
Section
10.2. Specific Enforcement, Consent to Jurisdiction, Waiver of Jury Trial.
(i)
The Company and the Investor acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that either
party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by the other
party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and without any bond
or other security being required), this being in addition to any other remedy to which either party may be entitled by law or equity.
(ii)
Each of the Company and the Investor (a) hereby irrevocably submits to the jurisdiction of the U.S. District Court and other courts of
the United States sitting in The City of New York, Borough of Manhattan, in the State of New York for the purposes of any suit, action
or proceeding arising out of or relating to this Agreement, and (b) hereby waives, and agrees not to assert in any such suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is
brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Investor
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 10.2 shall affect or limit any right to serve process in any other manner permitted by law.
(iii)
EACH OF THE COMPANY AND THE INVESTOR HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR DISPUTES RELATING HERETO. EACH OF THE COMPANY AND THE INVESTOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.2.
Section
10.3. Entire Agreement. The Transaction Documents set forth the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersede all prior and contemporaneous agreements, negotiations and understandings between the parties,
both oral and written, with respect to such matters. There are no promises, undertakings, representations or warranties by either party
relative to the subject matter hereof not expressly set forth in the Transaction Documents. The Disclosure Schedule and all exhibits
to this Agreement are hereby incorporated by reference in, and made a part of, this Agreement as if set forth in full herein.
Section
10.4. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall
be in writing and shall be effective (a) upon hand delivery or electronic mail delivery at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to be received), or the first business day following such
delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt
of such mailing, whichever shall first occur. The address for such communications shall be:
If
to the Company:
Spectral
AI, Inc.
2515
McKinney Avenue, Suite 1000
Dallas, Texas 75201
Telephone
Number: [***]
Email:
[***]
Attention:
General Counsel
With
copies (which shall not constitute notice) to:
Reed
Smith LLP
599
Lexington Avenue
New
York, NY 10022
Telephone
Number: [***]
|
Attention: |
Herbert F. Kozlov, Esq. |
|
|
Anthony J. Marsico, Esq. |
and
Reed
Smith LLP
2850
N. Harwood Street
Suite
1500
Dallas,
Texas 75201
Telephone
Number: [***]
Email:
[***]
Attention:
Lynwood E. Reinhardt, Esq.
If
to the Investor:
B.
Riley Principal Capital II, LLC
11100
Santa Monica Blvd., Suite 800
Los
Angeles, CA 90025
Telephone Number: [***]
Email:
[***]
Attention:
General Counsel
With
a copy (which shall not constitute notice) to:
Duane
Morris LLP
1540
Broadway
New
York, New York 10036
Telephone
Number: [***]
Email:
[***]
Attention:
Dean M. Colucci, Esq.
Either
party hereto may from time to time change its address for notices by giving at least five (5) days’ advance written notice of such
changed address to the other party hereto.
Section
10.5. Waivers. No provision of this Agreement may be waived by the parties from and after the date that is one (1) Trading
Day immediately preceding the date on which the Initial Registration Statement is initially filed with the Commission. Subject to the
immediately preceding sentence, no provision of this Agreement may be waived other than in a written instrument signed by the party against
whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercises
thereof or of any other right, power or privilege.
Section
10.6. Amendments. No provision of this Agreement may be amended by the parties from and after the date that is one (1) Trading
Day immediately preceding the date on which the Initial Registration Statement is initially filed with the Commission. Subject to the
immediately preceding sentence, no provision of this Agreement may be amended other than by a written instrument signed by both parties
hereto.
Section
10.7. Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute
a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms
thereof. The terms “including,” “includes,” “include” and words of like import shall be construed
broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof”
and words of like import refer to this entire Agreement instead of just the provision in which they are found.
Section
10.8. Construction. The parties agree that each of them and their respective counsel has reviewed and had an opportunity to
revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of the Transaction Documents. In addition, each and every reference
to share prices (other than the Threshold Price) and number of shares of Common Stock in any Transaction Document shall, in all cases,
be subject to adjustment for any stock splits, stock combinations, stock dividends, recapitalizations, reorganizations and other similar
transactions that occur on or after the date of this Agreement. Any reference in this Agreement to “Dollars” or “$”
shall mean the lawful currency of the United States of America. Any references to “Section” or “Article” in this
Agreement shall, unless otherwise expressly stated herein, refer to the applicable Section or Article of this Agreement.
Section
10.9. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors. Neither the Company nor the Investor may assign this Agreement or any of their respective rights or obligations hereunder
to any Person.
Section
10.10. No Third Party Beneficiaries. Except as expressly provided in Article IX, this Agreement is intended only for the benefit
of the parties hereto and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any
other Person.
Section
10.11. Governing Law. This Agreement shall be governed by and construed in accordance with the internal procedural and
substantive laws of the State of New York, without giving effect to any laws or rules of such state that would cause the application
of the laws of any other jurisdiction.
Section
10.12. Survival. The representations, warranties, covenants and agreements of the Company and the Investor contained in this
Agreement shall survive the execution and delivery hereof until the termination of this Agreement; provided, however, that
(i) the provisions of Article V (Representations, Warranties and Covenants of the Company), Article VIII (Termination), Article IX (Indemnification)
and this Article X (Miscellaneous) shall remain in full force and effect indefinitely notwithstanding such termination, and, (ii) so
long as the Investor owns any Securities, the covenants and agreements of the Company and the Investor contained in Article VI (Additional
Covenants), shall remain in full force and effect notwithstanding such termination for a period of six (6) months following such termination.
Section
10.13. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature or signature delivered by e-mail in a “.pdf” format data file, including any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered
due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.
Section
10.14. Publicity. The Company shall afford the Investor and its counsel with a reasonable opportunity to review and comment
upon, shall consult with the Investor and its counsel on the form and substance of, and shall give due consideration to all such comments
from the Investor or its counsel on, any press release, Commission filing or any other public disclosure made by or on behalf of the
Company relating to the Investor, its purchases hereunder or any aspect of the Transaction Documents or the transactions contemplated
thereby, including any press release disclosing the execution of this Agreement and the Registration Rights Agreement by the Company,
prior to the issuance, filing or public disclosure thereof. For the avoidance of doubt, the Company shall not be required to submit for
review any such disclosure (i) contained in periodic reports filed with the Commission under the Exchange Act if it shall have previously
provided substantially the same disclosure to the Investor or its counsel for review in connection with a previous filing or (ii) any
Prospectus Supplement if it contains disclosure that does not reference the Investor, its purchases hereunder or any aspect of the Transaction
Documents or the transactions contemplated thereby.
Section
10.15. Severability. The provisions of this Agreement are severable and, in the event that any court of competent jurisdiction
shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement, and this Agreement shall be reformed and construed as if such invalid or illegal
or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal
and enforceable to the maximum extent possible.
Section
10.16. Further Assurances. From and after the Closing Date, upon the request of the Investor or the Company, each of the
Company and the Investor shall execute and deliver such instrument, documents and other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement.
[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officer as of the
date first above written.
|
THE COMPANY: |
|
|
|
SPECTRAL AI, INC. |
|
|
|
By: |
/s/ Wensheng Fan |
|
Name: |
Wensheng Fan |
|
Title: |
Chief Executive Officer |
|
|
|
THE INVESTOR: |
|
|
|
B. RILEY PRINCIPAL CAPITAL II, LLC |
|
|
|
By: |
/s/ Patrice McNicoll |
|
Name: |
Patrice McNicoll |
|
Title: |
Authorized Signatory |
ANNEX
I TO THE
COMMON STOCK PURCHASE AGREEMENT
DEFINITIONS
“Accountant”
shall have the meaning assigned to such term in Section 5.6(d).
“Additional
Investor Expense Reimbursement” shall have the meaning assigned to such term in Section 10.1(i).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control
with a Person, as such terms are used in and construed under Rule 144.
“Aggregate
Limit” shall have the meaning assigned to such term in Section 2.1.
“Agreement”
shall have the meaning assigned to such term in the preamble of this Agreement.
“Allowable
Grace Period” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Average
Price” means a price per Share (rounded to the nearest tenth of a cent) equal to the quotient obtained by dividing (i)
the aggregate gross purchase price paid by the Investor for all Shares purchased pursuant to this Agreement, by (ii) the aggregate number
of Shares issued pursuant to this Agreement.
“Bankruptcy
Law” means Title 11, U.S. Code, or any similar U.S. federal or state bankruptcy Law or any Law for the relief of debtors.
“Base
Price” means a price per Share equal to the sum of (i) the Minimum Price and (ii) $0.05 (subject to adjustment for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction that occurs on or
after the date of this Agreement).
“Beneficial
Ownership Limitation” shall have the meaning assigned to such term in Section 3.5.
“Bloomberg”
means Bloomberg, L.P.
“Business
Combination Date” shall have the meaning assigned to such term in Section 5.6(a).
“Bring-Down
CFO Certificate” shall have the meaning assigned to such term in Section 6.17.
“Bring-Down
Comfort Letter” shall have the meaning assigned to such term in Section 6.17.
“Bring-Down
Negative Assurance Letter” shall have the meaning assigned to such term in Section 6.17.
“Broker-Dealer”
shall have the meaning assigned to such term in Section 6.13.
“BRS”
shall have the meaning assigned to such term in the Recitals.
“Bylaws”
shall have the meaning assigned to such term in Section 5.3.
“Cash
Commitment Fee” means an amount in cash equal to $75,000, which shall be paid to the Investor in the manner, at such time
and otherwise pursuant to and in accordance with Section 10.1(ii)(b).
“Cash
Make-Whole Payment” shall have the meaning assigned to such term in Section 10.1(ii)(c).
“Charter”
shall have the meaning assigned to such term in Section 5.3.
“Closing”
shall have the meaning assigned to such term in Section 2.2.
“Closing
Date” means the date of this Agreement.
“Closing
Sale Price” means, for the Common Stock as of any date, the last closing trade price for the Common Stock on the Trading
Market (or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market), as reported by Bloomberg, or, if the
Trading Market (or such Eligible Market, as applicable) begins to operate on an extended hours basis and does not designate the closing
trade price for the Common Stock, then the last trade price for the Common Stock prior to 4:00 p.m., New York City time, as reported
by Bloomberg. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during such period.
“Code”
shall have the meaning assigned to such term in Section 5.38.
“Commencement”
shall have the meaning assigned to such term in Section 3.1.
“Commencement
Date” shall have the meaning assigned to such term in Section 3.1.
“Commencement
Irrevocable Transfer Agent Instructions” shall have the meaning assigned to such term in Section 10.1(iv).
“Commission”
means the U.S. Securities and Exchange Commission or any successor entity.
“Commission
Documents” shall mean (1) the RCLF’s registration statement on Form S-4 (File No. 333-271566) initially filed
with the Commission May 2, 2023, including any related prospectus or prospectuses, for the registration of the Common Stock to be
issued pursuant to the Business Combination Agreement (as the same may be amended from time to time), by and among RCLF, Merger Sub
I, Merger Sub II, and Spectral MD Holdings, Ltd., a Delaware corporation, on file with the Commission at the time such registration
statement became effective, including the financial statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as of the effective date of such registration statement
under the Securities Act (the “Form S-4 Registration Statement”), (2) RCLF’s final proxy
statement/prospectus included in the Form S-4 Registration Statement at the time of effectiveness, including the Annexes thereto and
accompanying financial statements and all related soliciting materials under Rule 14a-12 under the Exchange Act, and all documents
incorporated therein by reference, in the form in which such proxy statement/prospectus was filed with the Commission pursuant to
Rule 424(b) under the Securities Act, (3) all reports, schedules, registrations, forms, statements, information and other documents
filed with or furnished to the Commission by the Company pursuant to the reporting requirements of the Exchange Act, including all
material filed with or furnished to the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, since the
Business Combination Date (including, without limitation, (A) the Company’s current report on Form 8-K, dated September 11,
2023 and filed with the Commission on September 15, 2023, including all documents, financial statements and other information
attached thereto or incorporated by reference therein as exhibits thereto (the “Merger Form 8-K”), (B) the
Company’s Quarterly Reports on Form 10-Q for the fiscal quarter ended September 30, 2023, filed with the Commission on
November 14, 2023), and which hereafter shall be filed with or furnished to the Commission by the Company (including, without
limitation, the Current Report), (4) each Registration Statement, as the same may be amended from time to time, the Prospectus
contained therein and each Prospectus Supplement thereto and (5) all information contained in such filings and all documents and
disclosures that have been and heretofore shall be incorporated by reference therein.
“Commitment
Fee” means, collectively, the Cash Commitment Fee and the Commitment Shares, together with the Cash Make-Whole Payment
that may be required to be paid by the Company to the Investor pursuant to and in accordance with Section 10.1(ii)(c), giving effect
to any reduction in the number of Commitment Shares resulting from the return by the Investor of all or such portion of the Commitment
Shares that were previously issued to the Investor pursuant to Section 10.1(ii)(a) that are required to be returned to the Company for
cancellation, if any, in exchange for the Investor’s receipt of such Cash Make-Whole Payment required to be paid by the Company
to the Investor pursuant to and in accordance with Section 10.1(ii)(c).
“Commitment
Shares” means 40,000 shares of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock which,
concurrently with the execution and delivery of this Agreement on the Closing Date, the Company has caused its transfer agent to issue
and deliver to the Investor not later than 4:00 p.m. (New York City time) on the second (2nd) Trading Day immediately following
the Closing Date pursuant to Section 10.1(ii)(a).
“Common
Stock” shall have the meaning assigned to such term in the recitals of this Agreement.
“Common
Stock Equivalents” means any securities of the Company which entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company”
shall have the meaning assigned to such term in the preamble of this Agreement.
“Compliance
Certificate” shall have the meaning assigned to such term in Section 7.2(ii).
“Contracts”
means any legally binding contracts, agreements, subcontracts, leases, and purchase orders.
“Cover
Price” shall have the meaning assigned to such term in Section 3.3.
“COVID-19”
means SARS-CoV-2 or COVID-19, and any evolutions thereof or any other related or associated epidemics, pandemics or disease outbreaks.
“Current
Report” shall have the meaning assigned to such term in Section 2.3.
“Custodian”
shall mean any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.
“Damages”
shall have the meaning assigned to such term in Section 9.1.
“Dilutive
Issuance” shall have the meaning assigned to such term in Section 6.6(ii).
“Disclosure
Schedule” shall have the meaning assigned to such term in the preamble to Article V.
“DTC”
means The Depository Trust Company, a subsidiary of The Depository Trust & Clearing Corporation, or any successor thereto.
“DWAC”
shall have the meaning assigned to such term in Section 5.33.
“DWAC
Shares” means shares of Common Stock issued pursuant to this Agreement that are (i) issued in electronic form, (ii) freely
tradable and transferable and without restriction on resale and without stop transfer instructions maintained against the transfer thereof
and (iii) timely credited by the Company’s transfer agent to the Investor’s (or its designee’s) specified DWAC account
with DTC under its Fast Automated Securities Transfer (FAST) Program, or any similar program hereafter adopted by DTC performing substantially
the same function.
“EAR”
shall have the meaning assigned to such term in Section 5.36.
“EDGAR”
means the Commission’s Electronic Data Gathering, Analysis and Retrieval System.
“Effective
Date” means, with respect to the Initial Registration Statement filed pursuant to Section 2(a) of the Registration Rights
Agreement (or any post-effective amendment thereto) or any New Registration Statement filed pursuant to Section 2(c) of the Registration
Rights Agreement (or any post-effective amendment thereto), as applicable, the date on which the Initial Registration Statement (or any
post-effective amendment thereto) or any New Registration Statement (or any post-effective amendment thereto) is declared effective by
the Commission.
“Effectiveness
Deadline” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Eligible
Market” means The Nasdaq Global Select Market, The Nasdaq Global Market, the New York Stock Exchange or the NYSE American
(or any nationally recognized successor to any of the foregoing).
“Environmental
Laws” shall have the meaning assigned to such term in Section 5.18.
“ERISA”
shall have the meaning assigned to such term in Section 5.38.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder.
“Exchange
Cap” shall have the meaning assigned to such term in Section 3.4(a).
“Exempt
Issuance” means the issuance of (a) Common Stock, options or other equity incentive awards to employees, officers, directors
or vendors of the Company pursuant to any equity incentive plan duly adopted for such purpose, by the Company’s Board of Directors
or a majority of the members of a committee of the Board of Directors established for such purpose, (b) (1) any Securities issued to
the Investor (or its designee) pursuant to the Transaction Documents, (2) any securities issued upon the exercise or exchange of or conversion
of any shares of Common Stock or Common Stock Equivalents held by the Investor at any time, or (3) any securities issued upon the exercise
or exchange of or conversion of any Common Stock Equivalents issued and outstanding on the date of this Agreement, provided that such
securities referred to in this clause (3) have not been amended since the date of this Agreement to increase the number of such securities
or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities issued pursuant to acquisitions,
divestitures, licenses, partnerships, collaborations or strategic transactions approved by the Company’s Board of Directors or
a majority of the members of a committee of directors established for such purpose, which acquisitions, divestitures, licenses, partnerships,
collaborations or strategic transactions can have a Variable Rate Transaction component, provided that any such issuance shall only be
to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an asset in
a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment
of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital
or to an entity whose primary business is investing in securities, (d) shares of Common Stock issued by the Company to the Investor (or
its designee) in connection with any “equity line of credit” or other continuous offering or similar offering of Common Stock
(other than the transactions contemplated by the Transaction Documents) pursuant to one or more written agreements between the Company
and the Investor or an Affiliate of the Investor executed after the date of this Agreement (if any), whereby the Company may sell shares
of Common Stock to the Investor or an Affiliate of the Investor at a future determined price, (e) shares of Common Stock issued by the
Company in any “at the market offering” or “equity distribution program” or similar offering of Common Stock
exclusively to or through B. Riley Securities, Inc. pursuant to one or more written agreements between the Company and B. Riley Securities,
Inc, or (f) any debt or debt securities of the Company.
“FCPA”
shall have the meaning assigned to such term in Section 5.36.
“FDA”
means the U.S. Food and Drug Administration, or any successor agency thereto.
“FDCA”
shall have the meaning assigned to such term in the definition of Healthcare Laws.
“Filing
Deadline” shall have the meaning assigned to such term in the Registration Rights Agreement.
“FINRA”
means the Financial Industry Regulatory Authority, Inc.
“FINRA
Filing” shall have the meaning assigned to such term in Section 6.14.
“Form
S-4 Registration Statement” shall have the meaning assigned to such term in the definition of Commission Documents.
“Fundamental
Transaction” means that (i) the Company shall, directly or indirectly, in one or more related transactions, (1) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person, with the result that the holders of the
Company’s capital stock immediately prior to such consolidation or merger together beneficially own less than 50% of the outstanding
voting power of the surviving or resulting corporation, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company to another Person, or (3) take action to facilitate a purchase, tender
or exchange offer by another Person that is accepted by the holders of more than 50% of the outstanding shares of Common Stock (excluding
any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party
to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or
other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase
agreement or other business combination), or (5) reorganize, recapitalize or reclassify its Common Stock, or (ii) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall become the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary
voting power represented by issued and outstanding Common Stock.
“Future
Purchase Suspension” shall have the meaning assigned to such term in Section 6.17.
“GAAP”
shall have the meaning assigned to such term in Section 5.6(b).
“GDPR”
shall have the meaning assigned to such term in Section 5.40.
“Merger
Sub I” means Ghost Merger Sub I Inc., a wholly owned subsidiary of RCLF.
“Merger
Sub II” means Ghost Merger Sub II LLC, a wholly owned subsidiary of RCLF.
“Good
Clinical Practices” means the then current standards for clinical trials (including all applicable requirements relating
to the protection of human subjects), as set forth in the FDCA (as defined below), and applicable regulations promulgated thereunder,
as amended from time to time, and such applicable standards of good clinical practice (including all applicable requirements relating
to protection of human subjects) as are required by other organizations and any Governmental Entity in any other countries in which the
Products are sold or intended to be sold.
“Good
Manufacturing Practices” mean the then current standards for the manufacture, processing, packaging, transportation, handling
and holding of drug and biological products and medical devices, as set forth in the FDCA and applicable regulations promulgated thereunder,
as amended from time to time, including applicable requirements contained in 21 C.F.R. Parts 210, 211, 600, 610, 820 and 1271, and such
applicable standards of good manufacturing practices as are required by any Governmental Entity in any other countries in which the Products
are sold or intended to be sold.
“Governmental
Entity” means any United States or non-United States (a) federal, state, regional, provincial, local, municipal or
other government, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal) or (c) body exercising or entitled to exercise any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any nature, including any arbitral tribunal (public or private).
“Hazardous
Materials” shall have the meaning assigned to such term in Section 5.18.
“Healthcare
Laws” means any applicable Laws, regulations and requirements having the force of law relating to drugs, biological
products or medical devices, good manufacturing practices (to the extent applicable), interactions with health care professionals,
fraud and abuse matters, related to laboratory testing, genetic testing, genomic sequencing, biospecimen collection or
testing, non-clinical testing, complaint handling, adverse event reporting, biohazards, and pharmacies. Healthcare Laws
includes, but is not limited to: (a) the Federal Food, Drug and Cosmetic Act of 1938, as amended (the
“FDCA”); (b) the Public Health Service Act of 1944, as amended, and the regulations of the FDA promulgated
thereunder; (c) Medicare (Title XVIII of the Social Security Act) and Medicaid (Title XIX of the Social Security Act); (d) the
federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)); (e) the Stark Anti-Self-Referral Law (42 U.S.C. §
1395nn); (f) the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)); (g) the civil False Claims Act (31 U.S.C.
§§ 3729 et seq.); (h) the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)); (i) the exclusion Laws
(42 U.S.C. § 1320a-7); (j) any other applicable federal, state, local or non-U.S. Laws, including but not
limited to EU Directive 93/42/EEC on medical devices (including national implementing legislation in the European Union) and
Regulation (EU) 2017/745 on medical devices, and regulations and requirements having the force of law related to the design,
development, testing, studying, manufacturing, processing, storing, importing or exporting, licensing, labeling or packaging of the
Products, or that is related to remuneration (including ownership) to or by physicians or other health care providers (including
kickbacks) or the disclosure or reporting of the same, patient or program charges, record-keeping, claims processing, documentation
requirements, medical necessity, referrals, the hiring of employees or acquisition of services or supplies from those who have been
excluded from government health care programs, quality, safety, licensure, accreditation or any other material aspect of providing
health care products or services; and (k) HIPAA.
“HIPAA”
means collectively: (a) the Health Insurance Portability and Accountability Act of 1996; (b) the Health Information Technology for
Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009); and (c) the Omnibus Rule effective
March 26, 2013 (78 Fed. Reg. 5566), and other implementing regulations at 45 CFR Parts 160 and 164 and related binding guidance
from the United States Department of Health and Human Services, in each case, as the same may be amended, modified or supplemented from
time to time.
“Indebtedness”
means, with respect to any Person as of any time, without duplication, (a) any liabilities for borrowed money or amounts owed (other
than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements, indemnities and other contingent
obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (c) the present value of any lease payments due under leases required to be capitalized in accordance
with GAAP.
“Initial
Comfort Letter” shall have the meaning assigned to such term in Section 7.2(xvi).
“Initial
Investor Expense Reimbursement” shall have the meaning assigned to such term in Section 10.1(i).
“Initial
Purchase Notice” shall have the meaning assigned to such term in the recitals hereof.
“Initial
Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Intellectual
Property Rights” shall have the meaning assigned to such term in Section 5.19.
“Intraday
VWAP Purchase” shall have the meaning assigned to such term in Section 3.2.
“Intraday
VWAP Purchase Commencement Time” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the time
that is the latest of: (i) the VWAP Purchase Ending Time of the VWAP Purchase Period for the VWAP Purchase preceding the Intraday
VWAP Purchase Period for such Intraday VWAP Purchase occurring on the same Purchase Date as such earlier VWAP Purchase, if the Company
has timely delivered a VWAP Purchase Notice to the Investor for a VWAP Purchase on such Purchase Date, (ii) the Intraday VWAP Purchase
Ending Time of the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase, if any, occurring on the same Purchase
Date as such Intraday VWAP Purchase, and (iii) the Investor’s timely receipt (acknowledged by email correspondence to each of the
individual notice recipients of the Company set forth in the applicable Intraday VWAP Purchase Notice, other than via auto-reply) from
the Company of the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase on the applicable Purchase Date therefor.
“Intraday
VWAP Purchase Ending Time” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the time on the
Purchase Date for such Intraday VWAP Purchase that is the earliest of: (i) 3:59 p.m., New York City time, on the applicable Purchase
Date for such Intraday VWAP Purchase, or such earlier time publicly announced by the Trading Market (or, if the Common Stock is then
listed on an Eligible Market, by such Eligible Market) as the official close of the primary (or “regular”) trading session
on the Trading Market (or on such Eligible Market, as applicable) on such Purchase Date; (ii) immediately at such time following the
Intraday VWAP Purchase Commencement Time of the Intraday VWAP Purchase Period for such Intraday VWAP Purchase that the total number (or
volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP
Purchase Period has exceeded the applicable Intraday VWAP Purchase Share Volume Maximum for such Intraday VWAP Purchase (taking into
account the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday
VWAP Purchase); provided, however, that the calculation of the total number (or volume) of shares of Common Stock traded
on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period shall exclude from such calculation
all shares of Common Stock traded in any of the following transactions, to the extent they occur during such Intraday VWAP Purchase Period
(as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”)
trading session that is reported in the consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or
prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on
such Purchase Date (as applicable), and (C) provided the Company shall have specified in the applicable Intraday VWAP Purchase Notice
that clause (iii) below shall not trigger the Intraday VWAP Purchase Ending Time for such Intraday VWAP Purchase (such specification
by the Company, whether in an Intraday VWAP Purchase Notice or in a VWAP Purchase Notice, a “Limit Order Continue Election”),
all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period
at a Sale Price that is less than the applicable Intraday VWAP Purchase Minimum Price Threshold; and (iii) provided the Company shall
have specified in the applicable Intraday VWAP Purchase Notice that this clause (iii) shall trigger the Intraday VWAP Purchase Ending
Time for such Intraday VWAP Purchase (such specification by the Company, whether in an Intraday VWAP Purchase Notice or in a VWAP Purchase
Notice, a “Limit Order Discontinue Election”), immediately at such time following the Intraday VWAP Purchase
Commencement Time of the Intraday VWAP Purchase Period for such Intraday VWAP Purchase that the Sale Price of any share of Common Stock
traded on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period is less than the applicable
Intraday VWAP Purchase Minimum Price Threshold; provided, however, that the determination of whether the Sale Price of
any share of Common Stock traded during such Intraday VWAP Purchase Period is less than the applicable Intraday VWAP Purchase Minimum
Price Threshold shall exclude (A) the opening or first purchase of Common Stock at or following the official open of such primary (or
“regular”) trading session that is reported in the consolidated system on such Purchase Date and (B) the last or closing
sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is reported in
the consolidated system on such Purchase Date (as applicable). All such calculations shall be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
“Intraday
VWAP Purchase Maximum Amount” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, such number
of shares of Common Stock equal to the lesser of: (i) one (1) million shares, and (ii) the product of (A) the Intraday VWAP Purchase
Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, multiplied by (B)
the total number (or volume) of shares of Common Stock traded on the Trading Market (or, if the Common Stock is then listed on an Eligible
Market, by such Eligible Market) during the Intraday VWAP Purchase Period for such Intraday VWAP Purchase; provided, however,
that the calculation of the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible
Market, as applicable) during such Intraday VWAP Purchase Period referred to in clause (ii)(B) above shall exclude from such calculation
all shares of Common Stock traded in any of the following transactions, to the extent they occur during such Intraday VWAP Purchase Period
(as applicable): (1) the opening or first purchase of Common Stock at or following the official open of such primary (or “regular”)
trading session that is reported in the consolidated system on such Purchase Date, (2) the last or closing sale of Common Stock at or
prior to the official close of such primary (or “regular”) trading session that is reported in the consolidated system on
such Purchase Date (as applicable), and (3) provided the Company shall have specified a Limit Order Continue Election in the applicable
Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market,
as applicable) during such Intraday VWAP Purchase Period at a Sale Price that is less than the applicable Intraday VWAP Purchase Minimum
Price Threshold. All such calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock
split, reverse stock split or other similar transaction.
“Intraday
VWAP Purchase Minimum Price Threshold” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, either
(a) the dollar amount specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase as the
per share minimum Sale Price threshold to be used in determining whether the event in clause (iii) of the definition of “Intraday
VWAP Purchase Ending Time” shall have occurred during the applicable Intraday VWAP Purchase Period for such Intraday VWAP Purchase,
if the Company shall have specified a Limit Order Discontinue Election in the applicable Intraday VWAP Purchase Notice for such Intraday
VWAP Purchase, or (b) the dollar amount specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP
Purchase as the per share minimum Sale Price threshold to be used in determining the sales of Common Stock during the applicable Intraday
VWAP Purchase Period that shall be excluded from the calculation of the total number (or volume) of shares of Common Stock traded on
the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period, if the Company shall have specified
a Limit Order Continue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase; provided, however,
that in each case if the Company has not specified any such dollar amount as the per share minimum Sale Price threshold in the applicable
Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, then the per share minimum Sale Price threshold to be used in such Intraday
VWAP Purchase shall be such dollar amount equal to the product of (a) the Closing Sale Price of the Common Stock on the Trading Day immediately
preceding the Purchase Date for such Intraday VWAP Purchase, multiplied by (b) 0.75. All such calculations shall be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
“Intraday
VWAP Purchase Notice” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, an irrevocable written
notice from the Company to the Investor, specifying the Intraday VWAP Purchase Percentage that shall apply to such Intraday VWAP Purchase
and whether a Limit Order Continue Election or a Limit Order Discontinue Election shall apply to such Intraday VWAP Purchase, and directing
the Investor to subscribe for and purchase a specified Intraday VWAP Purchase Share Amount (such specified Intraday VWAP Purchase Share
Amount subject to adjustment as set forth in Section 3.2 as necessary to give effect to the applicable Intraday VWAP Purchase Maximum
Amount for such Intraday VWAP Purchase), at the applicable Intraday VWAP Purchase Price therefor on the Purchase Date for such Intraday
VWAP Purchase in accordance with this Agreement, that is delivered by the Company to the Investor and received by the Investor (i) after
the latest of (X) 10:00 a.m., New York City time, on such Purchase Date, if the Company has not timely delivered a VWAP Purchase
Notice to the Investor for a VWAP Purchase on such Purchase Date, (Y) the VWAP Purchase Ending Time of the VWAP Purchase Period for the
VWAP Purchase preceding the Intraday VWAP Purchase Period for such Intraday VWAP Purchase occurring on the same Purchase Date as such
earlier VWAP Purchase, if the Company has timely delivered a VWAP Purchase Notice to the Investor for a VWAP Purchase on such Purchase
Date, and (Z) the Intraday VWAP Purchase Ending Time of the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase,
if any, occurring on the same Purchase Date as such Intraday VWAP Purchase, and (ii) prior to the earlier of (X) 3:30 p.m., New
York City time, on such Purchase Date and (Y) such time that is exactly thirty (30) minutes immediately prior to the official close of
the primary (or “regular”) trading session on the Trading Market (or, if the Common Stock is then listed on an Eligible Market,
on such Eligible Market) on such Purchase Date, if the Trading Market (or such Eligible Market, as applicable) has theretofore publicly
announced that the official close of the primary (or “regular”) trading session on the Trading Market (or on such Eligible
Market, as applicable) on such Purchase Date shall be earlier than 4:00 p.m., New York City time, on such Purchase Date.
“Intraday
VWAP Purchase Percentage” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the percentage
specified by the Company in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, which shall not exceed 25.0%,
for purposes of calculating, among other things, the Intraday VWAP Purchase Maximum Amount, the Intraday VWAP Purchase Share Amount and
the Intraday VWAP Purchase Share Volume Maximum, in each case applicable to such Intraday VWAP Purchase.
“Intraday
VWAP Purchase Period” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the period on the
Purchase Date for such Intraday VWAP Purchase, beginning at the applicable Intraday VWAP Purchase Commencement Time and ending at the
applicable Intraday VWAP Purchase Ending Time on such Purchase Date for such Intraday VWAP Purchase.
“Intraday
VWAP Purchase Price” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the purchase price
per Share to be purchased by the Investor in such Intraday VWAP Purchase, equal to the product of (i) 0.965, multiplied by (ii) the
VWAP of the Common Stock for the applicable Intraday VWAP Purchase Period on the applicable Purchase Date for such Intraday VWAP
Purchase; provided, however, that the calculation of the VWAP for the Common Stock for the Intraday VWAP Purchase
Period for an Intraday VWAP Purchase shall exclude each of the following transactions, to the extent they occur during such Intraday
VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official open of such
primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B) the last
or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session that is
reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified a Limit
Order Continue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, all sales of Common Stock
on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period at a Sale Price that is
less than the applicable Intraday VWAP Purchase Minimum Price Threshold for such Intraday VWAP Purchase. All such calculations shall
be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar
transaction.
“Intraday
VWAP Purchase Share Amount” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, the total number
of Shares to be purchased by the Investor in such Intraday VWAP Purchase as specified by the Company in the applicable Intraday VWAP
Purchase Notice for such Intraday VWAP Purchase, which total number of Shares shall not exceed the Intraday VWAP Purchase Maximum Amount
applicable to such Intraday VWAP Purchase, taking into account the Intraday VWAP Purchase Percentage specified by the Company in the
applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase (and such number of Shares specified by the Company in the applicable
Intraday VWAP Purchase Notice for such Intraday VWAP Purchase shall be subject to automatic adjustment in accordance with Section 3.2
hereof as necessary to give effect to the Intraday VWAP Purchase Maximum Amount limitation applicable to such Intraday VWAP Purchase,
taking into account the Intraday VWAP Purchase Percentage specified by the Company in the applicable Intraday VWAP Purchase Notice for
such Intraday VWAP Purchase, as set forth in this Agreement).
“Intraday
VWAP Purchase Share Volume Maximum” means, with respect to an Intraday VWAP Purchase made pursuant to Section 3.2, a number
of shares of Common Stock equal to the quotient obtained by dividing (i) the Intraday VWAP Purchase Share Amount to be subscribed for
and purchased by the Investor in such Intraday VWAP Purchase, by (ii) the Intraday VWAP Purchase Percentage specified by the Company
in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase (to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).
“Investment
Period” means the period commencing on the Commencement Date and expiring on the date this Agreement is subsequently terminated
pursuant to Article VIII.
“Investor”
shall have the meaning assigned to such term in the preamble of this Agreement.
“Investor
Party” shall have the meaning assigned to such term in Section 9.1.
“IT
Systems and Data” shall have the meaning assigned to such term in Section 5.39.
“Knowledge”
means the actual knowledge of any of (i) the Company’s Chief Executive Officer, (ii) the Company’s Chief Financial
Officer, (iii) the Company’s General Counsel, in each case after reasonable inquiry of all officers, directors and employees
of the Company under such Person’s direct supervision who would reasonably be expected to have knowledge or information with
respect to the matter in question.
“Law”
means any federal, state, provincial, local, foreign, national or supranational statute, law (including common law), act, statute, ordinance,
treaty, rule, code, regulation or other binding directive issued, promulgated or enforced by a Governmental Entity having jurisdiction
over a given matter.
“Limit
Order Continue Election” shall have the meaning assigned to such term in the definition of “Intraday VWAP Purchase
Ending Time,” which election shall be applicable to an Intraday VWAP Purchase, if such election is specified by the Company in
the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, and shall be applicable to a VWAP Purchase, if such election
is specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, as the case may be.
“Limit
Order Discontinue Election” shall have the meaning assigned to such term in the definition of “Intraday VWAP Purchase
Ending Time,” which election shall be applicable to an Intraday VWAP Purchase, if such election is specified by the Company in
the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, and shall be applicable to a VWAP Purchase, if such election
is specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, as the case may be.
“Material
Adverse Effect” means (i) any condition, occurrence, state of facts or event having, or insofar as reasonably can be
foreseen would likely have, any effect on the business, operations, properties or financial condition of the Company as set forth in
the Commission Documents that is material and adverse to the Company, taken as a whole, excluding any facts, circumstances, changes
or effects, individually or in the aggregate, exclusively and directly resulting from, relating to or arising out of any of the
following: (a) changes in conditions in the U.S. or global capital, credit or financial markets generally, including changes in
the availability of capital or currency exchange rates, provided such changes shall not have affected the Company in a materially
disproportionate manner as compared to other similarly situated companies, (b) changes generally affecting the industries in
which the Company operate, provided such changes shall not have affected the Company, taken as a whole, in a materially
disproportionate manner as compared to other similarly situated companies, (c) any effect of the announcement of, or the
consummation of the transactions contemplated by, this Agreement and the Registration Rights Agreement on the Company’s
relationships, contractual or otherwise, with customers, suppliers, vendors, bank lenders, strategic venture partners or employees,
(d) changes arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any
escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing as of the
date hereof, (e) any effect of COVID-19 or any Law, directive, pronouncement or guideline issued by a Governmental Entity, the
Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes
to business operations, “sheltering-in-place” or other restrictions that relate to, or arise out of, an
epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such Law, directive,
pronouncement or guideline or interpretation thereof following the date of this Agreement, (f) any action taken by the Investor, any
of its officers, its sole member or the Investor’s Broker-Dealer, or any of such Person’s successors with respect to the
transactions contemplated by this Agreement and the Registration Rights Agreement, and (g) the effect of any changes in applicable
laws or accounting rules, provided such changes shall not have affected the Company in a materially disproportionate manner as
compared to other similarly situated companies; (ii) any condition, occurrence, state of facts or event having, or insofar as
reasonably can be foreseen would likely have, any material adverse effect on the legality, validity or enforceability of any of the
Transaction Documents or the transactions contemplated thereby; or (iii) any condition, occurrence, state of facts or event that
would, or insofar as reasonably can be foreseen would likely, prohibit or otherwise materially interfere with or delay the ability
of the Company to perform any of its obligations under any of the Transaction Documents to which it is a party.
“Material
Permits” shall have the meaning assigned to such term in Section 5.17.
“Merger
Form 8-K” shall have the meaning assigned to such in the definition of Commission Documents.
“Minimum
Price” means $2.50, representing the Nasdaq official closing price of the Common Stock on the Trading Market (as reflected
on Nasdaq.com) on the Trading Day immediately preceding the date of this Agreement (subject to adjustment for any reorganization, recapitalization,
non-cash dividend, stock split, reverse stock split or other similar transaction that occurs on or after the date of this Agreement).
“Money
Laundering Laws” shall have the meaning assigned to such term in Section 5.38.
“MPA
Period” means the period commencing at 5:00 p.m., New York City time, on the Trading Day immediately preceding the Trading
Day on which any Affiliate of the Investor, including, without limitation, BRS, shall have published or distributed any research report
(as such term is defined in Rule 500 of Regulation AC) concerning the Company, and ending at 6:00 a.m., New York City time, on the sixth
(6th) Trading Day immediately following the Trading Day on which any Affiliate of the Investor, including, without limitation,
BRS, shall have published or distributed any research report (as such term is defined in Rule 500 of Regulation AC) concerning the Company.
“New
Registration Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Non-Affiliate
Shares” shall have the meaning assigned to such term in Section 5.46.
“Notice
of Effectiveness” shall have the meaning assigned to such term in Section 10.1(iv).
“Notified
Body” means an entity licensed, authorized or approved by the applicable Governmental Entity to assess and certify the
conformity of a medical device with the requirements of applicable legislation on medical devices in the European Union and United Kingdom,
each as may be amended from time to time, and applicable harmonized standards
“OFAC”
shall have the meaning assigned to such term in Section 5.36.
“Order”
means any outstanding writ, order, judgment, injunction, binding decision or determination, award, ruling, subpoena, verdict or decree
entered, issued or rendered by any Governmental Entity.
“PEA
Period” means the period commencing at 9:30 a.m., New York City time, on the fifth (5th) Trading Day immediately
prior to the filing of (i) any post-effective amendment to the Initial Registration Statement or any New Registration Statement or (ii)
any New Registration Statement, as applicable, and ending at 9:30 a.m., New York City time, on the Trading Day immediately following,
the Effective Date of such post-effective amendment or New Registration Statement, as applicable.
“Permits”
means any approvals, authorizations, clearances, licenses, registrations, permits or certificates of a Governmental Entity, including
Regulatory Permits.
“Person”
means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company,
trust, unincorporated organization, business association, firm, joint venture or Governmental Entity.
“Personal
Data” shall have the meaning assigned to such term in Section 5.40.
“Policies”
shall have the meaning assigned to such term in Section 5.40.
“Privacy
Laws” shall have the meaning assigned to such term in Section 5.40.
“Proceeding”
means any lawsuit, litigation, action, audit, investigation, examination, claim, complaint, charge, proceeding, suit, arbitration, investigation,
or mediation (in each case, whether civil, criminal or administrative and whether public or private) pending by or before or otherwise
involving any Governmental Entity.
“Product”
means each medical diagnostic product that is being researched, tested, developed or manufactured by or on behalf of the Company, including,
without limitation, its multispectral imaging device the DeepView SnapShot Wound Imaging System
“Prospectus”
shall have the meaning assigned to such term in the Registration Rights Agreement.
“Prospectus
Supplement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Purchase
Condition Satisfaction Time” shall have the meaning assigned to such term in Section 7.3.
“Purchase
Date” means, (i) with respect to a VWAP Purchase made pursuant to Section 3.1, the Trading Day on which the Investor
timely receives, (A) after 6:00 a.m., New York City time, and (B) prior to 9:00 a.m., New York City time, on such Trading Day, a
valid VWAP Purchase Notice for such VWAP Purchase in accordance with this Agreement, and (ii) with respect to an Intraday VWAP
Purchase made pursuant to Section 3.2, the Trading Day on which the Investor timely receives a valid Intraday VWAP Purchase Notice
for such Intraday VWAP Purchase in accordance with this Agreement, (A) after the latest of (X) 10:00 a.m., New York City
time, on such Trading Day, if the Company has not timely delivered a valid VWAP Purchase Notice to the Investor for a VWAP Purchase
on such Trading Day, (Y) the VWAP Purchase Ending Time of the VWAP Purchase Period for the VWAP Purchase preceding the applicable
Intraday VWAP Purchase Period for such Intraday VWAP Purchase occurring on the same Trading Day as such earlier VWAP Purchase, if
the Company has timely delivered a valid VWAP Purchase Notice to the Investor for a VWAP Purchase on such Trading Day, and (Z) the
Intraday VWAP Purchase Ending Time of the Intraday VWAP Purchase Period for the most recent prior Intraday VWAP Purchase, if any,
occurring on the same Trading Day as such Intraday VWAP Purchase, and (B) prior to the earlier of (X) 3:30 p.m., New York
City time, on such Trading Day for such Intraday VWAP Purchase and (Y) such time that is exactly thirty (30) minutes immediately
prior to the official close of the primary (or “regular”) trading session on the Trading Market (or, if the Common Stock
is then listed on an Eligible Market, on such Eligible Market) on such Trading Day, if the Trading Market (or such Eligible Market,
as applicable) has publicly announced that the official close of the primary (or “regular”) trading session shall be
earlier than 4:00 p.m., New York City time, on such Trading Day.
“Purchase
Share Delivery Date” shall have the meaning assigned to such term in Section 3.3.
“Qualified
Independent Underwriter” shall have the meaning assigned to such term in FINRA Rule 5121(f)(12).
“RCLF”
means Rosecliff Acquisition Corp I, a Delaware blank check company incorporated for the purpose of effecting a merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
“Reference
Period” shall have the meaning assigned to such term in Section 6.6(ii).
“Reference
Price” shall have the meaning assigned to such term in Section 6.6(ii).
“Registrable
Securities” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Registration
Period” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Registration
Rights Agreement” shall have the meaning assigned to such term in the recitals hereof.
“Registration
Statement” shall have the meaning assigned to such term in the Registration Rights Agreement.
“Regulatory
Permits” means all Permits granted by the FDA or any other Governmental Entity or Notified Body to the Company,
including investigational new drug applications, pre-market clearances, manufacturing approvals and
authorizations, CE-mark certificates of conformity, clinical trial authorizations and ethical reviews, facility licenses,
or their state, national or foreign equivalents.
“Release”
shall have the meaning assigned to such term in Section 5.18.
“Representation
Date” shall have the meaning assigned to such term in Section 6.17.
“Representatives”
means with respect to a Person, such Person’s directors, officers, employees, and legal, financial, internal and independent accounting
and other advisors and representatives.
“Restricted
Period” shall have the meaning assigned to such term in Section 6.9(i).
“Restricted
Person” shall have the meaning assigned to such term in Section 6.9(i).
“Restricted
Persons” shall have the meaning assigned to such term in Section 6.9(i).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect.
“Sale
Price” means any trade price for a share of Common Stock on the Trading Market, or if the Common Stock is then traded on
an Eligible Market, on such Eligible Market, as reported by Bloomberg.
“Sanctions
Laws” shall have the meaning assigned to such term in Section 5.36.
“Sarbanes-Oxley
Act” shall have the meaning assigned to such term in Section 5.6(d).
“Section
4(a)(2)” shall have the meaning assigned to such term in the recitals of this Agreement.
“Securities”
means, collectively, the Shares and the Commitment Shares.
“Securities
Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder.
“Shares”
shall mean the shares of Common Stock that may be purchased by the Investor under this Agreement pursuant to one or more VWAP Purchase
Notices or one or more Intraday VWAP Purchase Notices, but not including the Commitment Shares.
“Short
Sales” shall mean “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange
Act.
“Subsidiary”
shall mean any corporation or other entity of which at least a majority of the securities or other ownership interest having ordinary
voting power for the election of directors or other persons performing similar functions are at the time owned directly or indirectly
by the Company and/or any of its other Subsidiaries.
“Threshold
Price” means $1.00, which shall not be adjusted (proportionally or otherwise) for any forward stock split, reverse stock
split, stock combination, stock dividend, recapitalization, reorganization or other similar transaction involving the capital stock of
the Company that occurs on or after the date of the Agreement.
“Total
Commitment” shall have the meaning assigned to such term in Section 2.1.
“Trading
Day” shall mean any day on which the Trading Market or, if the Common Stock is then listed on an Eligible Market, such
Eligible Market is open for “regular” trading, including any day on which the Trading Market (or such Eligible Market, as
applicable) is open for “regular” trading for a period of time less than the customary “regular” trading period.
“Trading
Market” means The Nasdaq Capital Market (or any nationally recognized successor thereto).
“Transaction
Documents” means, collectively, this Agreement (as qualified by the Disclosure Schedule) and the exhibits hereto, the Registration
Rights Agreement, and the exhibits thereto, and each of the other agreements, documents, certificates and instruments entered into or
furnished by the parties hereto in connection with the transactions contemplated hereby and thereby.
“Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any equity or debt securities that are convertible
into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock or Common Stock Equivalents
either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices
of or quotations for the Common Stock at any time after the initial issuance of such equity or debt securities, or (B) with a conversion,
exercise or exchange price that is subject to being reset at some future date after the initial issuance of such equity or debt security
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock (including, without limitation, any “full ratchet” or “weighted average” anti-dilution provisions,
but not including any standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction), (ii) issues or sells any equity or debt securities, including, without limitation, Common Stock or Common Stock
Equivalents, either (A) at a price that is subject to being reset at some future date after the initial issuance of such debt or equity
security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the
market for the Common Stock (other than standard anti-dilution protection for any reorganization, recapitalization, non-cash dividend,
stock split or other similar transaction), or (B) that are subject to or contain any put, call, redemption, buy-back, price-reset or
other similar provision or mechanism (including, without limitation, a “Black-Scholes” put or call right, other than in connection
with a “fundamental transaction”) that provides for the issuance of additional equity securities of the Company or the payment
of cash by the Company, or (iii) enters into any agreement, including, but not limited to, an “equity line of credit” or
“at the market offering” or other continuous offering or similar offering of Common Stock or Common Stock Equivalents, whereby
the Company may sell Common Stock or Common Stock Equivalents at a future determined price.
“VWAP”
means, for the Common Stock for a specified period, the dollar volume-weighted average price for the Common Stock on the Trading Market
(or, if the Common Stock is then listed on an Eligible Market, on such Eligible Market), for such period, as reported by Bloomberg through
its “AQR” function; provided, however, that (i) the calculation of the dollar volume-weighted average price
for the Common Stock for the VWAP Purchase Period for each VWAP Purchase shall exclude each of the following transactions, to the extent
they occur during such VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following the official
open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date, (B)
the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading session
that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified
a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, all sales of Common Stock on the Trading
Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period at a Sale Price that is less than the applicable
VWAP Purchase Minimum Price Threshold for such VWAP Purchase; and (ii) the calculation of the dollar volume-weighted average price for
the Common Stock for the Intraday VWAP Purchase Period for each Intraday VWAP Purchase shall exclude each of the following transactions,
to the extent they occur during such Intraday VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock
at or following the official open of such primary (or “regular”) trading session that is reported in the consolidated system
on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”)
trading session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall
have specified a Limit Order Continue Election in the applicable Intraday VWAP Purchase Notice for such Intraday VWAP Purchase, all sales
of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during such Intraday VWAP Purchase Period at a Sale
Price that is less than the applicable Intraday VWAP Purchase Minimum Price Threshold for such Intraday VWAP Purchase. All such calculations
shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction.
“VWAP
Purchase” shall have the meaning assigned to such term in Section 3.1.
“VWAP
Purchase Commencement Time” means, with respect to a VWAP Purchase made pursuant to Section 3.1, 9:30:01 a.m., New York
City time, on the Purchase Date for such VWAP Purchase, or such later time on such Purchase Date publicly announced by the Trading Market
(or, if the Common Stock is then listed on an Eligible Market, by such Eligible Market) as the official open of the primary (or “regular”)
trading session on the Trading Market (or on such Eligible Market, as applicable) on such Purchase Date.
“VWAP
Purchase Ending Time” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the time on the Purchase
Date for such VWAP Purchase that is the earliest of: (i) 3:59 p.m., New York City time, on the applicable Purchase Date for
such VWAP Purchase, or such earlier time publicly announced by the Trading Market (or, if the Common Stock is then listed on an
Eligible Market, by such Eligible Market) as the official close of the primary (or “regular”) trading session on the
Trading Market (or on such Eligible Market, as applicable) on such Purchase Date; (ii) immediately at such time following the VWAP
Purchase Commencement Time of the VWAP Purchase Period for such VWAP Purchase that the total number (or volume) of shares of Common
Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period has exceeded the
applicable VWAP Purchase Share Volume Maximum for such VWAP Purchase (taking into account the VWAP Purchase Percentage specified by
the Company in the applicable VWAP Purchase Notice for such VWAP Purchase); provided, however, that the calculation of
the total number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable)
during such VWAP Purchase Period shall exclude from such calculation all shares of Common Stock traded in any of the following
transactions, to the extent they occur during such VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common
Stock at or following the official open of such primary (or “regular”) trading session that is reported in the
consolidated system on such Purchase Date, (B) the last or closing sale of Common Stock at or prior to the official close of such
primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date (as
applicable), and (C) provided the Company shall have specified a Limit Order Continue Election in the applicable VWAP Purchase
Notice for such VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during
such VWAP Purchase Period at a Sale Price that is less than the applicable VWAP Purchase Minimum Price Threshold; and (iii) provided
the Company shall have specified a Limit Order Discontinue Election in the applicable VWAP Purchase Notice for such VWAP Purchase,
immediately at such time following the VWAP Purchase Commencement Time of the VWAP Purchase Period for such VWAP Purchase that the
Sale Price of any share of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP
Purchase Period is less than the applicable VWAP Purchase Minimum Price Threshold; provided, however, that the
determination of whether the Sale Price of any share of Common Stock traded during such VWAP Purchase Period is less than the
applicable VWAP Purchase Minimum Price Threshold shall exclude (A) the opening or first purchase of Common Stock at or following the
official open of such primary (or “regular”) trading session that is reported in the consolidated system on such
Purchase Date and (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or
“regular”) trading session that is reported in the consolidated system on such Purchase Date (as applicable). All such
calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction.
“VWAP
Purchase Maximum Amount” means, with respect to a VWAP Purchase made pursuant to Section 3.1, such number of shares of
Common Stock equal to the lesser of: (i) one (1) million shares, and (ii) the product of (A) the VWAP Purchase Percentage specified
by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase, multiplied by (B) the total number (or volume) of
shares of Common Stock traded on the Trading Market (or, if the Common Stock is then listed on an Eligible Market, by such Eligible
Market) during the VWAP Purchase Period for such VWAP Purchase; provided, however, that the calculation of the total
number (or volume) of shares of Common Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such
VWAP Purchase Period referred to in clause (ii)(B) above shall exclude from such calculation all shares of Common Stock traded in
any of the following transactions, to the extent they occur during such VWAP Purchase Period (as applicable): (1) the opening or
first purchase of Common Stock at or following the official open of such primary (or “regular”) trading session that is
reported in the consolidated system on such Purchase Date, (2) the last or closing sale of Common Stock at or prior to the official
close of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase Date
(as applicable), and (3) provided the Company shall have specified a Limit Order Continue Election in the applicable VWAP Purchase
Notice for such VWAP Purchase, all sales of Common Stock on the Trading Market (or on such Eligible Market, as applicable) during
such VWAP Purchase Period at a Sale Price that is less than the applicable VWAP Purchase Minimum Price Threshold. All such
calculations shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock
split or other similar transaction.
“VWAP
Purchase Minimum Price Threshold” means, with respect to a VWAP Purchase made pursuant to Section 3.1, either (a) the dollar
amount specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase as the per share minimum Sale Price threshold
to be used in determining whether the event in clause (iii) of the definition of “VWAP Purchase Ending Time” shall have occurred
during the applicable VWAP Purchase Period for such VWAP Purchase, if the Company shall have specified a Limit Order Discontinue Election
in the applicable VWAP Purchase Notice for such VWAP Purchase, or (b) the dollar amount specified by the Company in the applicable VWAP
Purchase Notice for such VWAP Purchase as the per share minimum Sale Price threshold to be used in determining the sales of Common Stock
during the applicable VWAP Purchase Period that shall be excluded from the calculation of the total number (or volume) of shares of Common
Stock traded on the Trading Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period, if the Company shall
have specified a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase; provided, however,
that in each case if the Company has not specified any such dollar amount as the per share minimum Sale Price threshold in the applicable
VWAP Purchase Notice for such VWAP Purchase, then the per share minimum Sale Price threshold to be used in such VWAP Purchase shall be
such dollar amount equal to the product of (a) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the
Purchase Date for such VWAP Purchase, multiplied by (b) 0.75. All such calculations shall be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction.
“VWAP
Purchase Notice” means, with respect to a VWAP Purchase made pursuant to Section 3.1, an irrevocable written notice delivered
by the Company to the Investor, and received by the Investor, after 6:00 a.m., New York City time, and prior to 9:00 a.m., New York City
time, on the Purchase Date for such VWAP Purchase, specifying the VWAP Purchase Percentage that shall apply to such VWAP Purchase and
whether a Limit Order Continue Election or a Limit Order Discontinue Election shall apply to such VWAP Purchase, and directing the Investor
to subscribe for and purchase a specified VWAP Purchase Share Amount (such specified VWAP Purchase Share Amount subject to adjustment
as set forth in Section 3.1 as necessary to give effect to the applicable VWAP Purchase Maximum Amount for such VWAP Purchase), at the
applicable VWAP Purchase Price therefor on such Purchase Date for such VWAP Purchase in accordance with this Agreement.
“VWAP
Purchase Percentage” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the percentage specified by the
Company in the applicable VWAP Purchase Notice for such VWAP Purchase, which shall not exceed 25.0%, for purposes of calculating, among
other things, the VWAP Purchase Maximum Amount, the VWAP Purchase Share Amount and the VWAP Purchase Share Volume Maximum, in each case
applicable to such VWAP Purchase.
“VWAP
Purchase Period” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the period on the Purchase Date for
such VWAP Purchase, beginning at the applicable VWAP Purchase Commencement Time and ending at the applicable VWAP Purchase Ending Time
on such Purchase Date for such VWAP Purchase.
“VWAP
Purchase Price” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the purchase price per Share to be
purchased by the Investor in such VWAP Purchase, equal to the product of (i) 0.965, multiplied by (ii) the VWAP of the Common Stock for
the applicable VWAP Purchase Period on the applicable Purchase Date for such VWAP Purchase; provided, however, that the
calculation of the VWAP for the Common Stock for the VWAP Purchase Period for a VWAP Purchase shall exclude each of the following transactions,
to the extent they occur during such VWAP Purchase Period (as applicable): (A) the opening or first purchase of Common Stock at or following
the official open of such primary (or “regular”) trading session that is reported in the consolidated system on such Purchase
Date, (B) the last or closing sale of Common Stock at or prior to the official close of such primary (or “regular”) trading
session that is reported in the consolidated system on such Purchase Date (as applicable), and (C) provided the Company shall have specified
a Limit Order Continue Election in the applicable VWAP Purchase Notice for such VWAP Purchase, all sales of Common Stock on the Trading
Market (or on such Eligible Market, as applicable) during such VWAP Purchase Period at a Sale Price that is less than the applicable
VWAP Purchase Minimum Price Threshold for such VWAP Purchase. All such calculations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, recapitalization or other similar transaction.
“VWAP
Purchase Share Amount” means, with respect to a VWAP Purchase made pursuant to Section 3.1, the total number of Shares
to be purchased by the Investor in such VWAP Purchase as specified by the Company in the applicable VWAP Purchase Notice for such VWAP
Purchase, which total number of Shares shall not exceed the VWAP Purchase Maximum Amount applicable to such VWAP Purchase, taking into
account the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase (and such
number of Shares specified by the Company in the applicable VWAP Purchase Notice for such VWAP Purchase shall be subject to automatic
adjustment in accordance with Section 3.1 hereof as necessary to give effect to the VWAP Purchase Maximum Amount limitation applicable
to such VWAP Purchase, taking into account the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice
for such VWAP Purchase, as set forth in this Agreement).
“VWAP
Purchase Share Volume Maximum” means, with respect to a VWAP Purchase made pursuant to Section 3.1, a number of shares
of Common Stock equal to the quotient obtained by dividing (i) the VWAP Purchase Share Amount to be subscribed for and purchased by the
Investor in such VWAP Purchase, by (ii) the VWAP Purchase Percentage specified by the Company in the applicable VWAP Purchase Notice
for such VWAP Purchase (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse
stock split or other similar transaction).
EXHIBIT
A
FORM
OF REGISTRATION RIGHTS AGREEMENT
[TO
BE FURNISHED SEPARATELY]
EXHIBIT
B
CLOSING
CERTIFICATE
[***]
EXHIBIT
C
COMPLIANCE
CERTIFICATE
[***]
DISCLOSURE
SCHEDULE
RELATING TO THE COMMON STOCK
PURCHASE AGREEMENT, DATED AS OF DECEMBER 26, 2023
BETWEEN SPECTRAL AI, INC. AND B. Riley Principal Capital II, LLC
[***]
Exhibit 10.2
REGISTRATION RIGHTS
AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of December 26, 2023, is by and between B. Riley Principal Capital
II, LLC, a Delaware limited liability company (the “Investor”), and Spectral AI, Inc., a Delaware corporation
(the “Company”).
RECITALS
A. The
Company and the Investor have entered into that certain Common Stock Purchase Agreement, dated as of the date hereof (the “Purchase
Agreement”), pursuant to which the Company may issue, from time to time, to the Investor up to the lesser of (i) $10,000,000
in aggregate gross purchase price of newly issued shares of the Company’s Class A common stock, par value $0.0001 per share (“Common
Stock”), and (ii) the Exchange Cap (to the extent applicable under Section 3.4 of the Purchase Agreement), as provided for
therein.
B. Pursuant
to the terms of, and in consideration for the Investor entering into, the Purchase Agreement, the Company shall cause its transfer agent
to issue to the Investor the Commitment Shares in accordance with Section 10.1(ii)(a) of the Purchase Agreement and shall pay the Cash
Commitment Fee to the Investor in such manner, at such time and otherwise in accordance with Section 10.1(ii)(b) of the Purchase Agreement.
C. Pursuant
to the terms of, and in consideration for the Investor entering into, the Purchase Agreement, and to induce the Investor to execute and
deliver the Purchase Agreement, the Company has agreed to provide the Investor with certain registration rights with respect to the Registrable
Securities (as defined herein) as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration
of the representations, warranties, covenants and agreements contained herein and in the Purchase Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, intending to be legally bound hereby, the Company and the
Investor hereby agree as follows:
1. Definitions.
Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
(a) “Agreement”
shall have the meaning assigned to such term in the preamble of this Agreement
(b) “Allowable
Grace Period” shall have the meaning assigned to such term in Section 3(p).
(c) “Blue
Sky Filing” shall have the meaning assigned to such term in Section 6(a).
(d) “Business
Day” means any day other than Saturday, Sunday or any other day on which commercial banks in New York, New York are authorized
or required by law to remain closed.
(e) “Claims”
shall have the meaning assigned to such term in Section 6(a).
(f) “Commission”
means the U.S. Securities and Exchange Commission or any successor entity.
(g) “Common
Stock” shall have the meaning assigned to such term in the recitals to this Agreement.
(h) “Company”
shall have the meaning assigned to such term in the preamble of this Agreement.
(i) “Company
Party” shall have the meaning assigned to such term in Section 6(b).
(j) “Effective
Date” means the date that the applicable Registration Statement has been declared effective by the Commission.
(k) “Effectiveness
Deadline” means (i) with respect to the Initial Registration Statement required to be filed to pursuant to Section 2(a),
the earlier of (A) the sixtieth (60th) calendar day immediately after the Filing Deadline with respect to the Initial Registration
Statement, if the Initial Registration Statement is subject to review by the Commission, and (B) if the Company is notified (orally or
in writing) by the Commission that the Initial Registration Statement will not be reviewed by the Commission, the fifth (5th)
Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that the Initial Registration
Statement will not be reviewed by the Commission, and (ii) with respect to any New Registration Statements that may be required to be
filed by the Company pursuant to this Agreement, the earlier of (A) the sixtieth (60th) calendar day immediately after the
Filing Deadline with respect to such New Registration Statement, if such New Registration Statement is subject to review by the Commission,
and (B) if the Company is notified (orally or in writing) by the Commission that such New Registration Statement will not be reviewed
by the Commission, the fifth (5th) Business Day after the date the Company is notified (orally or in writing, whichever is
earlier) by the Commission that such New Registration Statement will not be reviewed by the Commission.
(l) “Filing
Deadline” means (i) with respect to the Initial Registration Statement required to be filed to pursuant to Section 2(a),
the tenth (10th) Business Day after the date of this Agreement and (ii) with respect to any New Registration Statements that
may be required to be filed by the Company pursuant to this Agreement, the tenth (10th) Business Day following the sale of
substantially all of the Registrable Securities included in the Initial Registration Statement or the most recent prior New Registration
Statement, as applicable, or such other date as permitted by the Commission.
(m) “FINRA
Filing” shall have the meaning assigned to such term in the Purchase Agreement.
(n) “Indemnified
Damages” shall have the meaning assigned to such term in Section 6(a).
(o) “Initial
Registration Statement” shall have the meaning assigned to such term in Section 2(a).
(p) “Investor”
shall have the meaning assigned to such term in the preamble of this Agreement.
(q) “Investor
Party” and “Investor Parties” shall have the meaning assigned to such terms in Section 6(a).
(r) “Legal
Counsel” shall have the meaning assigned to such term in Section 2(b).
(s) “New
Registration Statement” shall have the meaning assigned to such term in Section 2(c).
(t) “Person”
means any person or entity, whether a natural person, trustee, corporation, partnership, limited partnership, limited liability company,
trust, unincorporated organization, business association, firm, joint venture, governmental agency or authority.
(u) “Prospectus”
means the prospectus in the form included in the Registration Statement at the applicable Effective Date of the Registration Statement,
as supplemented from time to time by any Prospectus Supplement, including the documents incorporated by reference therein.
(v) “Prospectus
Supplement” means any prospectus supplement to the Prospectus filed with the Commission from time to time pursuant to Rule
424(b) under the Securities Act, including the documents incorporated by reference therein.
(w) “Purchase
Agreement” shall have the meaning assigned to such term in the recitals to this Agreement.
(x) “register,”
“registered,” and “registration” refer to a registration effected by preparing and
filing one or more Registration Statements in compliance with the Securities Act and pursuant to Rule 415 and the declaration of effectiveness
of such Registration Statement(s) by the Commission.
(y) “Registrable
Securities” ” means all of (i) the Shares, (ii) the Commitment Shares, and (iii) any capital stock of the Company
issued or issuable with respect to such Shares or the Commitment Shares, including, without limitation, (1) as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the
shares of Common Stock are converted or exchanged and shares of capital stock of a successor entity into which the shares of Common Stock
are converted or exchanged, in each case until such time as such securities cease to be Registrable Securities pursuant to Section 2(f).
(z) “Registration
Statement” means a registration statement or registration statements of the Company filed under the Securities Act covering
the resale by the Investor of Registrable Securities, as such registration statement or registration statements may be amended and supplemented
from time to time, including all documents filed as part thereof or incorporated by reference therein.
(aa) “Registration
Period” shall have the meaning assigned to such term in Section 3(a).
(bb) “Rule 144”
means Rule 144 promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any other similar
or successor rule or regulation of the Commission that may at any time permit the Investor to sell securities of the Company to the public
without registration.
(cc) “Rule 415”
means Rule 415 promulgated by the Commission under the Securities Act, as such rule may be amended from time to time, or any other similar
or successor rule or regulation of the Commission providing for offering securities on a delayed or continuous basis.
(dd) “Staff”
shall have the meaning assigned to such term in Section 2(c).
(ee) “Violations”
shall have the meaning assigned to such term in Section 6(a).
2. Registration.
(a) Mandatory
Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with the
Commission the Initial Registration Statement on Form S-1 (or any successor form) covering the resale by the Investor of (i) all of the
Commitment Shares and (ii) the maximum number of additional Registrable Securities as shall be permitted to be included thereon in accordance
with applicable Commission rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor
under Rule 415 under the Securities Act at then prevailing market prices (and not fixed prices) (the “Initial Registration
Statement”). The Initial Registration Statement shall contain the “Selling Stockholder” and “Plan of Distribution”
sections in substantially the form attached hereto as Exhibit A. The Company shall use its commercially reasonable efforts to have
the Initial Registration Statement declared effective by the Commission as soon as reasonably practicable, but in no event later than
the applicable Effectiveness Deadline.
(b) Legal
Counsel. Subject to Section 5 hereof, the Investor shall have the right to select one legal counsel to review, solely on its behalf,
any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Duane Morris LLP, or such other
counsel as thereafter designated by the Investor. Except as provided under Section 10.1(i) of the Purchase Agreement, the Company shall
have no obligation to reimburse the Investor for any and all legal fees and expenses of the Legal Counsel incurred in connection with
the transactions contemplated hereby.
(c) Sufficient
Number of Shares Registered. If at any time all Registrable Securities are not covered by the Initial Registration Statement filed
pursuant to Section 2(a) as a result of Section 2(e) or otherwise, the Company shall use its commercially reasonable efforts to file with
the Commission one or more additional Registration Statements so as to cover all of the Registrable Securities not covered by the Initial
Registration Statement, in each case, as soon as practicable (taking into account any position of the staff of the Commission (“Staff”)
with respect to the date on which the Staff will permit such additional Registration Statement(s) to be filed with the Commission and
the rules and regulations of the Commission) (each such additional Registration Statement, a “New Registration Statement”),
but in no event later than the applicable Filing Deadline for such New Registration Statement(s). The Company shall use its commercially
reasonable efforts to cause each such New Registration Statement to become effective as soon as reasonably practicable following the filing
thereof with the Commission, but in no event later than the applicable Effectiveness Deadline for such New Registration Statement.
(d) No
Inclusion of Other Securities. In no event shall the Company include any securities other than Registrable Securities on any Registration
Statement pursuant to Section 2(a) or Section 2(c).
(e) Offering.
If the Staff or the Commission seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement
as constituting an offering of securities that does not permit such Registration Statement to become effective and be used for resales
by the Investor on a delayed or continuous basis under Rule 415 at then-prevailing market prices (and not fixed prices), or if after the
filing of any Registration Statement pursuant to Section 2(a) or Section 2(c), the Company is otherwise required by the Staff or the Commission
to reduce the number of Registrable Securities included in such Registration Statement, then the Company shall reduce the number of Registrable
Securities to be included in such Registration Statement (after consultation with the Investor and Legal Counsel as to the specific Registrable
Securities to be removed therefrom) until such time as the Staff and the Commission shall so permit such Registration Statement to become
effective and be used as aforesaid. Notwithstanding anything in this Agreement to the contrary, if after giving effect to the actions
referred to in the immediately preceding sentence, the Staff or the Commission does not permit such Registration Statement to become effective
and be used for resales by the Investor on a delayed or continuous basis under Rule 415 at then-prevailing market prices (and not fixed
prices), the Company shall not request acceleration of the Effective Date of such Registration Statement, the Company shall promptly (but
in no event later than 48 hours) request the withdrawal of such Registration Statement pursuant to Rule 477 under the Securities Act,
and the Effectiveness Deadline shall automatically be deemed to have elapsed with respect to such Registration Statement at such time
as the Staff or the Commission has made a final and non-appealable determination that the Commission will not permit such Registration
Statement to be so utilized (unless prior to such time the Company has received assurances from the Staff or the Commission that a New
Registration Statement filed by the Company with the Commission promptly thereafter may be so utilized). In the event of any reduction
in Registrable Securities pursuant to this paragraph, the Company shall use its commercially reasonable efforts to file one or more New
Registration Statements with the Commission in accordance with Section 2(c) until such time as all Registrable Securities have been included
in Registration Statements that have been declared effective and the Prospectuses contained therein are available for use by the Investor.
(f) Any
Registrable Security shall cease to be a “Registrable Security” at the earliest of the following: (i) when a Registration
Statement covering such Registrable Security becomes or has been declared effective by the Commission and such Registrable Security has
been sold or disposed of pursuant to such effective Registration Statement; and (ii) the date that is the later of (A) the first (1st)
anniversary of the effective date of termination of the Purchase Agreement in accordance with Article VIII of the Purchase Agreement and
(B) the first (1st) anniversary of the date of the last sale of any Registrable Securities by the Company to the Investor pursuant
to the Purchase Agreement.
3. Related Obligations.
The Company shall use its commercially
reasonable efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof,
and, pursuant thereto, during the term of this Agreement, the Company shall have the following obligations:
(a) The
Company shall promptly prepare and file with the Commission the Initial Registration Statement pursuant to Section 2(a) hereof and one
or more New Registration Statements pursuant to Section 2(c) hereof with respect to the Registrable Securities, but in no event later
than the applicable Filing Deadline therefor, and the Company shall use its commercially reasonable efforts to cause each such Registration
Statement to become effective as soon as practicable after such filing, but in no event later than the applicable Effectiveness Deadline
therefor. Subject to Allowable Grace Periods, the Company shall keep each Registration Statement effective (and the Prospectus contained
therein available for use) pursuant to Rule 415 for resales by the Investor on a continuous basis at then-prevailing market prices (and
not fixed prices) at all times until the earlier of (i) the date on which the Investor shall have sold all of the Registrable Securities
covered by such Registration Statement and (ii) the date of termination of the Purchase Agreement if as of such termination date the Investor
holds no Registrable Securities (or, if applicable, the date on which such securities cease to be Registrable Securities after the date
of termination of the Purchase Agreement) (the “Registration Period”). Notwithstanding anything to the contrary
contained in this Agreement (but subject to the provisions of Section 3(p) hereof), the Company shall ensure that, when filed and at all
times while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the Prospectus
(including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement shall not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the
statements therein (in the case of Prospectuses, in the light of the circumstances in which they were made) not misleading. The Company
shall submit to the Commission, as soon as reasonably practicable after the date that the Company learns that no review of a particular
Registration Statement will be made by the Staff or that the Staff has no further comments on a particular Registration Statement (as
the case may be), a request for acceleration of effectiveness of such Registration Statement to a time and date prior to the applicable
Effectiveness Deadline in accordance with Rule 461 under the Securities Act.
(b) Subject
to Section 3(p) of this Agreement, the Company shall use its commercially reasonable efforts to prepare and file with the Commission such
amendments (including, without limitation, post-effective amendments) and supplements to each Registration Statement and the Prospectus
used in connection with each such Registration Statement, which Prospectus is to be filed pursuant to Rule 424 promulgated under the Securities
Act, as may be necessary to keep each such Registration Statement effective (and the Prospectus contained therein current and available
for use) at all times during the Registration Period for such Registration Statement, and, during such period, comply with the provisions
of the Securities Act with respect to the disposition of all Registrable Securities of the Company required to be covered by such Registration
Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of
disposition by the Investor. Without limiting the generality of the foregoing, the Company covenants and agrees that (i) on or before
the second (2nd) Trading Day immediately following the Effective Date of the Initial Registration Statement and any New Registration
Statement (or any post-effective amendment thereto), the Company shall file with the Commission in accordance with Rule 424(b) under the
Securities Act the final Prospectus to be used in connection with sales pursuant to such Registration Statement (or post-effective amendment
thereto), and (ii) if the transactions contemplated by any one or more VWAP Purchases and/or any one or more Intraday VWAP Purchases are
material to the Company (individually or collectively), the material terms of which have not previously been described in the Prospectus
or any Prospectus Supplement filed with the Commission under Rule 424(b) under the Securities Act (or in any periodic report, statement,
schedule or other document filed by the Company with the Commission under the Exchange Act and incorporated by reference in the Registration
Statement and the Prospectus), or if otherwise required under the Securities Act (or the public written interpretive guidance of the Staff
of the Commission relating thereto), in each case as reasonably and mutually determined by the Company and the Investor, then, no later
than (i) 9:00 a.m., New York City time, on the Purchase Date for such VWAP Purchase and (ii) as soon as reasonably practicable on the
Purchase Date for such Intraday VWAP Purchase(s), the Company shall file with the Commission a Prospectus Supplement pursuant to Rule
424(b) under the Securities Act with respect to such VWAP Purchase(s) and such Intraday VWAP Purchase(s) (as applicable) requiring such
filing, disclosing the total number of Shares that are to be issued and sold to the Investor pursuant to such VWAP Purchase(s) and Intraday
VWAP Purchase(s) (as applicable), the total purchase price for the Shares subject thereto, the applicable purchase price(s) for such Shares
and the estimated net proceeds to be received by the Company from the sale of such Shares. To the extent not previously disclosed in the
Prospectus or a Prospectus Supplement, the Company shall disclose in its Quarterly Reports on Form 10-Q and in its Annual Reports on Form
10-K the information described in the immediately preceding sentence relating to all VWAP Purchase(s) and all Intraday VWAP Purchase(s)
(as applicable) effected and settled during the relevant fiscal quarter and shall file such Quarterly Reports on Form 10-Q and Annual
Reports on Form 10-K with the Commission within the applicable time period prescribed for such report under the Exchange Act. In the case
of amendments and supplements to any Registration Statement on Form S-1 or Prospectus related thereto which are required to be filed pursuant
to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report on Form 8-K,
Form 10-Q or Form 10-K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into
such Registration Statement and Prospectus, if applicable, or shall promptly file such amendments or supplements to the Registration Statement
or Prospectus with the Commission, for the purpose of including or incorporating such report into such Registration Statement and Prospectus.
The Company consents to the use of the Prospectus (including, without limitation, any supplement thereto) included in each Registration
Statement in accordance with the provisions of the Securities Act and with the securities or “Blue Sky” laws of the jurisdictions
in which the Registrable Securities may be sold by the Investor, in connection with the resale of the Registrable Securities and for such
period of time thereafter as such Prospectus (including, without limitation, any supplement thereto) (or in lieu thereof, the notice referred
to in Rule 173(a) under the Securities Act) is required by the Securities Act to be delivered in connection with resales of Registrable
Securities.
(c) The
Company shall (A) permit Legal Counsel an opportunity to review and comment upon (i) each Registration Statement at least two (2) Business
Days prior to its filing with the Commission and (ii) all amendments and supplements to each Registration Statement (including, without
limitation, the Prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K, and any similar or successor reports or Prospectus Supplements the contents of which is limited to that set forth in such
reports) within a reasonable number of days prior to their filing with the Commission, and (B) shall reasonably consider any comments
of the Investor and Legal Counsel on any such Registration Statement or amendment or supplement thereto or to any Prospectus contained
therein. The Company shall promptly furnish to Legal Counsel, without charge, (i) electronic copies of any correspondence from the Commission
or the Staff to the Company or its representatives relating to each Registration Statement (which correspondence shall be redacted to
exclude any material, non-public information regarding the Company or any of its Subsidiaries), (ii) after the same is prepared and
filed with the Commission, one (1) electronic copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including,
without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by the Investor,
and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1) electronic copy of the Prospectus included
in such Registration Statement and all amendments and supplements thereto; provided, however, the Company shall not be required to furnish
any document (other than the Prospectus, which may be provided in .PDF format) to Legal Counsel to the extent such document is available
on EDGAR.
(d) Without
limiting any obligation of the Company under the Purchase Agreement, the Company shall promptly furnish to the Investor, without charge,
(i) after the same is prepared and filed with the Commission, at least one (1) electronic copy of each Registration Statement and any
amendment(s) and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated
therein by reference, if requested by the Investor, all exhibits thereto, (ii) upon the effectiveness of each Registration Statement,
one (1) electronic copy of the Prospectus included in such Registration Statement and all amendments and supplements thereto (or such
other number of copies as the Investor may reasonably request from time to time) and (iii) such other documents, including, without limitation,
copies of any final Prospectus and any Prospectus Supplement thereto, as the Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by the Investor; provided, however, the Company shall not be required
to furnish any document (other than the Prospectus, which may be provided in .PDF format) to the Investor to the extent such document
is available on EDGAR.
(e) The
Company shall take such action as is reasonably necessary to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by the Investor of the Registrable Securities covered by a Registration Statement under such other securities or “Blue
Sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including,
without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii) take such other actions as may be reasonably necessary to maintain such
registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary
or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall
not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file
a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and the Investor of
the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “Blue Sky” laws of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threatening of any proceeding for such purpose.
(f) The
Company shall notify Legal Counsel and the Investor in writing of the happening of any event, as promptly as reasonably practicable after
becoming aware of such event, as a result of which the Prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain
any material, non-public information regarding the Company or any of its Subsidiaries), and, subject to Section 3(p), promptly prepare
a supplement or amendment to such Registration Statement and such Prospectus contained therein to correct such untrue statement or omission
and deliver one (1) electronic copy of such supplement or amendment to Legal Counsel and the Investor (or such other number of copies
as Legal Counsel or the Investor may reasonably request). The Company shall also promptly notify Legal Counsel and the Investor in writing
(i) when a Prospectus or any Prospectus Supplement or post-effective amendment has been filed, when a Registration Statement or any post-effective
amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and the Investor by facsimile or
e-mail on the same day of such effectiveness), and when the Company receives written notice from the Commission that a Registration Statement
or any post-effective amendment will be reviewed by the Commission, (ii) of any request by the Commission for amendments or supplements
to a Registration Statement or related Prospectus or related information, (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate and (iv) of the receipt of any request by the Commission or
any other federal or state governmental authority for any additional information relating to the Registration Statement or any amendment
or supplement thereto or any related Prospectus. The Company shall also advise the Investor promptly (but in no event later than 24 hours)
and shall confirm such advice in writing of the Company becoming aware of the happening of any event, which makes any statement made in
the FINRA Filing untrue or which requires the making of any additions to or changes to the statements then made in the FINRA Filing in
order to comply with FINRA Rules 5110 and 5121. The Company shall respond as promptly as reasonably practicable to any comments received
from the Commission with respect to a Registration Statement or any amendment thereto. Nothing in this Section 3(f) shall limit any obligation
of the Company under the Purchase Agreement.
(g) The
Company shall (i) use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness
of a Registration Statement or the use of any Prospectus contained therein, or the suspension of the qualification, or the loss of an
exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest possible time and (ii) notify Legal Counsel and the Investor
of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding.
(h) The
Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in such
Registration Statement pursuant to the Securities Act, (iii) the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees
that it shall, upon learning that disclosure of such information concerning the Investor is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
(i) Without
limiting any obligation of the Company under the Purchase Agreement, the Company shall use its commercially reasonable efforts either
to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on the Trading Market, or (ii) secure
designation and quotation of all of the Registrable Securities covered by each Registration Statement on another Eligible Market. The
Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(i).
(j) The
Company shall cooperate with the Investor and, to the extent applicable, facilitate the timely preparation and delivery of Registrable
Securities, as DWAC Shares, to be offered pursuant to a Registration Statement and enable such DWAC Shares to be in such denominations
or amounts (as the case may be) as the Investor may reasonably request from time to time and registered in such names as the Investor
may request. Investor hereby agrees that it shall cooperate with the Company, its counsel and its transfer agent in connection with any
issuances of DWAC Shares, and hereby represents, warrants and covenants to the Company that it will resell such DWAC Shares only pursuant
to the Registration Statement in which such DWAC Shares are included, in a manner described under the caption “Plan of Distribution”
in such Registration Statement, and in a manner in compliance with all applicable U.S. federal and state securities laws, rules and regulations,
including, without limitation, any applicable prospectus delivery requirements of the Securities Act. At the time such DWAC Shares are
offered and sold pursuant to the Registration Statement, such DWAC Shares shall be free from all restrictive legends and may be transmitted
by the Company’s transfer agent to the Investor by crediting an account at DTC as directed in writing by the Investor.
(k) Upon
the written request of the Investor, the Company shall as soon as reasonably practicable after receipt of notice from the Investor and
subject to Section 3(p) hereof, (i) incorporate in a Prospectus Supplement or post-effective amendment such information as the Investor
reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any
other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such Prospectus
Supplement or post-effective amendment after being notified of the matters to be incorporated in such Prospectus Supplement or post-effective
amendment; and (iii) supplement or make amendments to any Registration Statement or Prospectus contained therein if reasonably requested
by the Investor.
(l) The
Company shall use its commercially reasonable efforts to cause the Registrable Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.
(m) The
Company shall make generally available to its security holders (which may be satisfied by making such information available on EDGAR)
as soon as practical, but not later than ninety (90) days after the close of the period covered thereby, an earnings statement (in form
complying with, and in the manner provided by, the provisions of Rule 158 under the Securities Act) covering a twelve-month period beginning
not later than the first day of the Company’s fiscal quarter next following the applicable Effective Date of each Registration Statement.
(n) The
Company shall otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission
in connection with any registration hereunder.
(o) Within
one (1) Business Day after each Registration Statement which covers Registrable Securities is declared effective by the Commission, the
Company shall deliver to the transfer agent for such Registrable Securities (with copies to the Investor) an opinion of the Company’s
legal counsel advising the transfer agent that such Registration Statement has been declared effective by the Commission, in such form
as shall be acceptable to the transfer agent.
(p) Notwithstanding
anything to the contrary contained herein (but subject to the last sentence of this Section 3(p)), at any time after the Effective Date
of a particular Registration Statement, the Company may, upon written notice to Investor, suspend Investor’s use of any prospectus
that is a part of any Registration Statement (in which event the Investor shall discontinue sales of the Registrable Securities pursuant
to such Registration Statement contemplated by this Agreement, but shall settle any previously made sales of Registrable Securities) if
the Company (x) is pursuing an acquisition, merger, tender offer, reorganization, disposition or other similar transaction and the Company
determines in good faith that (A) the Company’s ability to pursue or consummate such a transaction would be materially adversely
affected by any required disclosure of such transaction in such Registration Statement or other registration statement or (B) such transaction
renders the Company unable to comply with Commission requirements, in each case under circumstances that would make it impractical or
inadvisable to cause any Registration Statement (or such filings) to be used by Investor or to promptly amend or supplement any Registration
Statement contemplated by this Agreement on a post effective basis, as applicable, or (y) has experienced some other material non-public
event the disclosure of which at such time, in the good faith judgment of the Company, would materially adversely affect the Company (each,
an “Allowable Grace Period”); provided, however, that in no event shall the Investor be suspended from
selling Registrable Securities pursuant to any Registration Statement for a period that exceeds thirty (30) consecutive Trading Days or
an aggregate of ninety (90) Trading Days in any 365-day period; and provided, further, the Company shall not effect any such suspension
during (A) the first ten (10) consecutive Trading Days after the Effective Date of the particular Registration Statement or (B) the five-Trading
Day period commencing on the Purchase Date for each VWAP Purchase and for each Intraday VWAP Purchase (as applicable). Upon disclosure
of such information or the termination of the condition described above, the Company shall provide prompt notice, but in any event within
one Business Day of such disclosure or termination, to the Investor and shall promptly terminate any suspension of sales it has put into
effect and shall take such other reasonable actions to permit registered sales of Registrable Securities as contemplated in this Agreement
(including as set forth in the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material,
non-public information is no longer applicable). Notwithstanding anything to the contrary contained in this Section 3(p), the Company
shall cause its transfer agent to deliver DWAC Shares to a transferee of the Investor in accordance with the terms of the Purchase Agreement
in connection with any sale of Registrable Securities with respect to which (i) the Company has made a sale to Investor and (ii) the Investor
has entered into a contract for sale, and delivered a copy of the Prospectus included as part of the particular Registration Statement
to the extent applicable, in each case prior to the Investor’s receipt of the notice of an Allowable Grace Period and for which
the Investor has not yet settled.
4. Obligations of the Investor.
(a) At
least five (5) Business Days prior to the first anticipated filing date of each Registration Statement (or such shorter period to which
the parties agree), the Company shall notify the Investor in writing of the information the Company requires from the Investor with respect
to such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant
to this Agreement with respect to the Registrable Securities of the Investor that the Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it,
as shall be reasonably required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may reasonably request.
(b) The
Investor, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company
in connection with the preparation and filing of each Registration Statement hereunder, unless the Investor has notified the Company in
writing of the Investor’s election to exclude all of the Investor’s Registrable Securities from such Registration Statement.
(c) The
Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(p)
or the first sentence of 3(f), the Investor shall immediately discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(p) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding
anything to the contrary in this Section 4(c), the Company shall cause its transfer agent to deliver DWAC Shares to a transferee of the
Investor in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to
which the Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening
of any event of the kind described in Section 3(p) or the first sentence of Section 3(f) and for which the Investor has not yet settled.
(d) The
Investor covenants and agrees that it shall comply with the prospectus delivery and other requirements of the Securities Act as applicable
to it in connection with sales of Registrable Securities pursuant to a Registration Statement.
5. Expenses of Registration.
Each party shall bear its own
fees and expenses related to the transactions contemplated by this Agreement. For the avoidance of doubt, the Company shall pay for all
registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company; and
the Investor shall pay any sales or brokerage commissions and fees and disbursements of counsel for, and other expenses of, the Investor
incurred in connection with the registrations, filings or qualifications pursuant to Section 2 and 3, and all U.S. federal, state and
local stamp and other similar transfer and other taxes and duties levied in connection with the sale of the Securities pursuant hereto.
6. Indemnification.
(a) In
the event any Registrable Securities are included in any Registration Statement under this Agreement, to the fullest extent permitted
by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each of its directors, officers, stockholders,
members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding the lack of such title or any other title) and each Person, if any, who controls the Investor within
the meaning of the Securities Act or the Exchange Act and each of the directors, officers, stockholders, members, partners, employees,
agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
the lack of such title or any other title) of such controlling Persons (each, an “Investor Party” and collectively,
the “Investor Parties”), against any losses, obligations, claims, damages, liabilities, contingencies, judgments,
fines, penalties, charges, costs (including, without limitation, court costs, reasonable attorneys’ fees, costs of defense and investigation),
amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) reasonably incurred in investigating,
preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the Commission, whether pending or threatened, whether or not
an Investor Party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto
or in any filing made in connection with the qualification of the offering under the securities or other “Blue Sky” laws of
any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged
omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any
untrue statement or alleged untrue statement of a material fact contained in any Prospectus (as amended or supplemented) or in any Prospectus
Supplement or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the
light of the circumstances under which the statements therein were made, not misleading (the matters in the foregoing clauses (i) and
(ii) being, collectively, “Violations”). Subject to Section 6(e), the Company shall reimburse the Investor Parties,
promptly as such expenses are incurred and are due and payable, for any reasonable and documented legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Investor Party arising out of or based
upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Investor
Party for such Investor Party expressly for use in connection with the preparation of such Registration Statement, Prospectus or Prospectus
Supplement or any such amendment thereof or supplement thereto (it being hereby acknowledged and agreed that the written information set
forth on Exhibit B attached hereto is the only written information furnished to the Company by or on behalf of the Investor expressly
for use in any Registration Statement, Prospectus or Prospectus Supplement); (ii) shall not be available to the Investor to the extent
such Claim is based on a failure of the Investor to deliver or to cause to be delivered the Prospectus (as amended or supplemented) made
available by the Company (to the extent applicable), including, without limitation, a corrected Prospectus, if such Prospectus (as amended
or supplemented) or corrected Prospectus was timely made available by the Company pursuant to Section 3(d) and then only if, and to the
extent that, following the receipt of the corrected Prospectus no grounds for such Claim would have existed; and (iii) shall not apply
to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made
by or on behalf of the Investor Party and shall survive the transfer of any of the Registrable Securities by the Investor pursuant to
Section 9.
(b) In connection with any
Registration Statement in which the Investor is participating, the Investor agrees to severally and not jointly indemnify, hold harmless
and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its
officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the Securities
Act or the Exchange Act (each, a “Company Party”), against any Claim or Indemnified Damages to which any of
them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in reliance upon
and in conformity with written information relating to the Investor furnished to the Company by the Investor expressly for use in connection
with such Registration Statement, the Prospectus included therein or any Prospectus Supplement thereto (it being hereby acknowledged
and agreed that the written information set forth on Exhibit B attached hereto is the only written information furnished to the
Company by or on behalf of the Investor expressly for use in any Registration Statement, Prospectus or Prospectus Supplement); and, subject
to Section 6(e) and the below provisos in this Section 6(b), the Investor shall reimburse a Company Party any legal or other expenses
reasonably incurred by such Company Party in connection with investigating or defending any such Claim; provided, however,
the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Investor, which
consent shall not be unreasonably withheld or delayed; and provided, further that the Investor shall be liable under this Section
6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Investor as a result of the applicable
sale of Registrable Securities pursuant to such Registration Statement, Prospectus or Prospectus Supplement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of such Company Party and shall survive the transfer of
any of the Registrable Securities by the Investor pursuant to Section 9.
(c) Promptly after receipt
by an Investor Party or Company Party (as the case may be) under this Section 6 of notice of the commencement of any action or proceeding
(including, without limitation, any governmental action or proceeding) involving a Claim, such Investor Party or Company Party (as the
case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying
party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Investor Party or the Company Party (as the case may be); provided,
however, an Investor Party or Company Party (as the case may be) shall have the right to retain its own counsel with the reasonable
and documented fees and expenses of such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed in writing
to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and to employ
counsel reasonably satisfactory to such Investor Party or Company Party (as the case may be) in any such Claim; or (iii) the named parties
to any such Claim (including, without limitation, any impleaded parties) include both such Investor Party or Company Party (as the case
may be) and the indemnifying party, and such Investor Party or such Company Party (as the case may be) shall have been advised by counsel
that a conflict of interest is likely to exist if the same counsel were to represent such Investor Party or such Company Party and the
indemnifying party (in which case, if such Investor Party or such Company Party (as the case may be) notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of the indemnifying party, then the indemnifying party shall not
have the right to assume the defense thereof on behalf of the indemnified party and such counsel shall be at the expense of the indemnifying
party, provided further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable
fees and expenses of more than one (1) separate legal counsel for all Investor Parties or Company Parties (as the case may be). The Company
Party or Investor Party (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably
available to the Company Party or Investor Party (as the case may be) which relates to such action or Claim. The indemnifying party shall
keep the Company Party or Investor Party (as the case may be) reasonably apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior written consent of the Company Party or Investor Party
(as the case may be), which consent shall not be unreasonably withheld, conditioned or delayed, consent to entry of any judgment or enter
into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff
to such Company Party or Investor Party (as the case may be) of a release from all liability in respect to such Claim or litigation,
and such settlement shall not include any admission as to fault on the part of the Company Party. For the avoidance of doubt, the immediately
preceding sentence shall apply to Sections 6(a) and 6(b) hereof. Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Company Party or Investor Party (as the case may be) with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the
Investor Party or Company Party (as the case may be) under this Section 6, except to the extent that the indemnifying party is materially
and adversely prejudiced in its ability to defend such action.
(d) No
Person involved in the sale of Registrable Securities who is guilty of bad faith, gross negligence, willful or reckless misconduct or
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled
to indemnification from any Person involved in such sale of Registrable Securities who is not guilty of fraudulent misrepresentation.
(e) The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred; provided that any Person receiving any payment
pursuant to this Section 6 shall promptly reimburse the Person making such payment for the amount of such payment to the extent a court
of competent jurisdiction determines that such Person receiving such payment was not entitled to such payment.
(f) The
indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of the Company
Party or Investor Party against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant
to the law.
7. Contribution.
To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however:
(i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards
set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution
by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the applicable
sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, the Investor
shall not be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received
by the Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that the
Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged
untrue statement or omission or alleged omission.
8. Reports Under the Exchange Act.
With a view to making available
to the Investor the benefits of Rule 144, the Company agrees to:
(a) use
its commercially reasonable efforts to make and keep public information available, as those terms are understood and defined in Rule 144;
(b) use
its commercially reasonable efforts to file with the Commission in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements (it being understood that nothing
herein shall limit any of the Company’s obligations under the Purchase Agreement) and the filing of such reports and other documents
is required for the applicable provisions of Rule 144;
(c) furnish
to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting, submission and posting requirements of Rule 144 and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company with the Commission
if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit the Investor
to sell such securities pursuant to Rule 144 without registration; and
(d) take
such additional action as is reasonably requested by the Investor to enable the Investor to sell the Registrable Securities pursuant to
Rule 144, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the
Company’s transfer agent as may be reasonably requested from time to time by the Investor and otherwise fully cooperate with Investor
and Investor’s broker to effect such sale of securities pursuant to Rule 144.
9. Assignment of Registration Rights.
Neither the Company nor the
Investor shall assign this Agreement or any of their respective rights or obligations hereunder; provided, however, that
any transaction, whether by merger, reorganization, restructuring, consolidation, financing or otherwise, whereby the Company remains
the surviving entity immediately after such transaction shall not be deemed an assignment.
10. Amendment or Waiver.
No provision of this Agreement
may be amended or waived by the parties from and after the date that is one (1) Trading Day immediately preceding the date on which the
Initial Registration Statement is initially filed with the Commission. Subject to the immediately preceding sentence, no provision of
this Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written
instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
11. Miscellaneous.
(a) Solely
for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to
own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons
with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from
such record owner of such Registrable Securities.
(b) Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement shall be given
in accordance with Section 10.4 of the Purchase Agreement.
(c) Failure
of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof. The Company and the Investor acknowledge and agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that either party shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions
of this Agreement by the other party and to enforce specifically the terms and provisions hereof (without the necessity of showing economic
loss and without any bond or other security being required), this being in addition to any other remedy to which either party may be entitled
by law or equity.
(d) All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws
of the State of New York, without giving effect to any law or rule (whether of the State of New York or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court,
that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction
or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) The
Transaction Documents set forth the entire agreement and understanding of the parties solely with respect to the subject matter thereof
and supersedes all prior and contemporaneous agreements, negotiations and understandings between the parties, both oral and written, solely
with respect to such matters. There are no promises, undertakings, representations or warranties by either party relative to subject matter
hereof not expressly set forth in the Transaction Documents. Notwithstanding anything in this Agreement to the contrary and without implication
that the contrary would otherwise be true, nothing contained in this Agreement shall limit, modify or affect in any manner whatsoever
(i) the conditions precedent to a VWAP Purchase and an Intraday VWAP Purchase contained in Article VII of the Purchase Agreement or (ii)
any of the Company’s obligations under the Purchase Agreement.
(f) This
Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors. This Agreement is not
for the benefit of, nor may any provision hereof be enforced by, any Person, other than the parties hereto, their respective successors
and the Persons referred to in Sections 6 and 7 hereof.
(g) The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless the
context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed
broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof”
and words of like import refer to this entire Agreement instead of just the provision in which they are found.
(h) This
Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature
or signature delivered by e-mail in a “.pdf” format data file, including any electronic signature complying with the U.S.
federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution and shall be binding
upon the signatory thereto with the same force and effect as if the signature were an original signature.
(i) Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(j) The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
[Signature Pages Follow]
IN WITNESS WHEREOF,
Investor and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the
date first written above.
|
THE COMPANY: |
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SPECTRAL AI, INC. |
|
|
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By: |
/s/ Wensheng Fan |
|
Name: |
Wensheng Fan |
|
Title: |
Chief Executive Officer |
IN WITNESS WHEREOF,
Investor and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the
date first written above.
|
THE INVESTOR:
|
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B. RILEY PRINCIPAL CAPITAL II, LLC |
|
|
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By: |
/s/ Patrice McNicoll |
|
Name: |
Patrice McNicoll |
|
Title: |
Authorized Signatory |
EXHIBIT A
SELLING STOCKHOLDER
This prospectus relates to
the offer and sale by B. Riley Principal Capital II of up to [●] shares of our Common Stock that have been or may be issued by us
to B. Riley Principal Capital II under the Purchase Agreement. For additional information regarding the shares of our Common Stock included
in this prospectus, see the section titled “Committed Equity Financing” above. We are registering the shares of our Common
Stock included in this prospectus pursuant to the provisions of the Registration Rights Agreement we entered into with B. Riley Principal
Capital II on December 26, 2023 in order to permit the selling stockholder to offer the shares included in this prospectus for resale
from time to time. Except for the transactions contemplated by the Purchase Agreement and the Registration Rights Agreement and as set
forth in the section titled “Plan of Distribution (Conflict of Interest)” in this prospectus, B. Riley Principal Capital II
has not had any material relationship with us within the past three years. As used in this prospectus, the term “selling stockholder”
means B. Riley Principal Capital II, LLC.
The table below presents information
regarding the selling stockholder and the shares of our Common Stock that may be resold by the selling stockholder from time to time under
this prospectus. This table is prepared based on information supplied to us by the selling stockholder and reflects holdings as of [●],
202[●]. The number of shares in the column “Maximum Number of Shares of Common Stock to be Offered Pursuant to this Prospectus”
represents all of the shares of our Common Stock being offered for resale by the selling stockholder under this prospectus. The selling
stockholder may sell some, all or none of the shares being offered for resale in this offering. We do not know how long the selling stockholder
will hold the shares before selling them and, except as set forth in the section titled “Plan of Distribution (Conflict of Interest)”
in this prospectus, we are not aware of any existing arrangements between the selling stockholder and any other stockholder, broker, dealer,
underwriter or agent relating to the sale or distribution of the shares of our Common Stock being offered for resale by this prospectus.
Beneficial ownership is determined
in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act and includes shares of our Common Stock with respect to
which the selling stockholder has sole or shared voting and investment power. The percentage of shares of our Common Stock beneficially
owned by the selling stockholder prior to the offering shown in the table below is based on an aggregate of [●] shares of our Common
Stock outstanding on [●], 202[●]. Because the purchase price to be paid by the selling stockholder for shares of our Common
Stock, if any, that we may elect to sell to the selling stockholder in one or more VWAP Purchases and one or more Intraday VWAP Purchases
from time to time under the Purchase Agreement will be determined on the applicable Purchase Dates therefor, the actual number of shares
of our Common Stock that we may sell to the selling stockholder under the Purchase Agreement may be fewer than the number of shares being
offered for resale under this prospectus. The fourth column assumes the resale by the selling stockholder of all of the shares of our
Common Stock being offered for resale pursuant to this prospectus.
Name of Selling Stockholder |
|
Number of Shares of
Common Stock
Beneficially Owned
Prior to Offering |
|
Maximum Number of
Shares of Common Stock
to be Offered Pursuant to
this Prospectus(3) |
|
Number of Shares of
Common Stock
Beneficially Owned
After Offering(4) |
|
|
Number(1) |
|
Percent(2) |
|
|
|
Number |
|
Percent |
B. Riley Principal Capital II, LLC(5) |
|
40,000 |
|
* |
|
[●] |
|
0 |
|
-- |
| * | Represents beneficial ownership of less than 1.0% of the outstanding
shares of our Common Stock. |
| (1) | Represents the 40,000 shares of our Common Stock we issued to
B. Riley Principal Capital II on December [●], 2023 as Commitment Shares in consideration for entering into the Purchase Agreement
with us. In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior
to the offering all of the shares that B. Riley Principal Capital II may be required to purchase under the Purchase Agreement, because
the issuance of such shares is solely at our discretion and is subject to conditions contained in the Purchase Agreement, the satisfaction
of which are entirely outside of B. Riley Principal Capital II’s control, including the registration statement that includes this
prospectus becoming and remaining effective. Furthermore, the Purchases and the Intraday Purchases of our Common Stock under the Purchase
Agreement are subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement
prohibits us from issuing and selling any shares of our Common Stock to B. Riley Principal Capital II to the extent such shares, when
aggregated with all other shares of our Common Stock then beneficially owned by B. Riley Principal Capital II, would cause B. Riley Principal
Capital II’s beneficial ownership of our Common Stock to exceed the 4.99% Beneficial Ownership Limitation. The Purchase Agreement
also prohibits us from issuing or selling shares of our Common Stock under the Purchase Agreement in excess of the 19.99% Exchange Cap,
unless we obtain stockholder approval to do so, or unless the average price for all shares of our Common Stock purchased by B. Riley
Principal Capital II under the Purchase Agreement equals or exceeds $2.55 per share, such that the Exchange Cap limitation would not
apply under applicable Nasdaq rules. Neither the Beneficial Ownership Limitation nor the Exchange Cap (to the extent applicable under
Nasdaq) may be amended or waived under the Purchase Agreement. |
| (2) | Applicable percentage ownership is based on [●] shares of our Common
Stock outstanding as of [●], 202[●]. |
| (3) | Under the terms of the Purchase Agreement, in certain circumstances set forth in the Purchase Agreement,
we may be required to pay B. Riley Principal Capital II up to $100,000, in cash, as a “make-whole” payment to the extent the
aggregate amount of cash proceeds, if any, received by B. Riley Principal Capital II from their resale of the Commitment Shares offered
for resale by this prospectus, prior to certain times set forth in the Purchase Agreement, is less than $100,000, in exchange for B. Riley
Principal Capital II returning to us for cancelation all of the Commitment Shares we originally issued to them upon execution of the Purchase
Agreement that were not previously resold by B. Riley Principal Capital II prior to the times specified in the Purchase Agreement, if
any, in which case the total number of shares of our Common Stock being offered for resale pursuant to this prospectus would be less than
the maximum number of shares of Common Stock to be offered for resale pursuant to this prospectus set forth in this column by the number
of Commitment Shares that B. Riley Principal Capital II may be required to return to us for cancelation in exchange for such cash “make
whole” payment. See “Plan of Distribution (Conflict of Interest)” for more information about the terms of the commitment
fee to be received by B. Riley Principal Capital II under the Purchase Agreement. |
| (4) | Assumes the sale of all shares of our Common Stock being offered for resale pursuant to this prospectus. |
| (5) | The business address of B. Riley Principal Capital II, LLC (“BRPC II”) is 11100 Santa Monica
Blvd., Suite 800, Los Angeles, California 90025. BRPC II’s principal business is that of a private investor. BRPC II is a wholly-owned
subsidiary of B. Riley Principal Investments, LLC (“BRPI”). As a result, BRPI may be deemed to indirectly beneficially own
the securities of the company held of record by BRPC II. B. Riley Financial, Inc. (“BRF”) is the parent company of BRPC II
and BRPI. As a result, BRF may be deemed to indirectly beneficially own the securities of the company held of record by BRPC II and indirectly
beneficially owned by BRPI. Bryant R. Riley is the Co-Chief Executive Officer and Chairman of the Board of Directors of BRF. As a result,
Bryant R. Riley may be deemed to indirectly beneficially own the securities of the company held of record by BRPC II and indirectly beneficially
owned by BRPI. Each of BRF, BRPI and Bryant R. Riley expressly disclaims beneficial ownership of the securities of the company held of
record by BRPC II, except to the extent of its/his pecuniary interest therein. We have been advised that none of BRF, BRPI or BRPC II
is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or an independent broker-dealer; however, each
of BRF, BRPI, BRPC II and Bryant R. Riley is an affiliate of B. Riley Securities, Inc. (“BRS”), a registered broker-dealer
and FINRA member, and Bryant R. Riley is an associated person of BRS. BRS will act as an executing
broker that will effectuate resales of our Common Stock that have been and may be acquired by BRPC II from us pursuant to the Purchase
Agreement to the public in this offering. See “Plan of Distribution (Conflict of Interest)” for more information about the
relationship between BRPC II and BRS. |
PLAN OF DISTRIBUTION
(CONFLICT OF INTEREST)
The shares of our Common Stock
offered by this prospectus are being offered by the selling stockholder, B. Riley Principal Capital II, LLC (“B. Riley Principal
Capital II, LLC”). The shares may be sold or distributed from time to time by the selling stockholder directly to one or more
purchasers or through brokers, dealers, or underwriters who may act solely as agents at market prices prevailing at the time of sale,
at prices related to the prevailing market prices, at negotiated prices, or at fixed prices, which may be changed. The sale of the shares
of our Common Stock offered by this prospectus could be effected in one or more of the following methods:
| ● | ordinary brokers’ transactions; |
| ● | transactions involving cross or block trades; |
| ● | through brokers, dealers, or underwriters who may act solely
as agents; |
| ● | “at the market” into an existing market for our
Common Stock; |
| ● | in other ways not involving market makers or established business
markets, including direct sales to purchasers or sales effected through agents; |
| ● | in privately negotiated transactions; or |
| ● | any combination of the foregoing. |
In order to comply with the
securities laws of certain states, if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition,
in certain states, the shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from
the state’s registration or qualification requirement is available and complied with.
B. Riley Principal Capital
II is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.
B. Riley Principal Capital
II has informed us that it presently anticipates using, but is not required to use, B. Riley Securities, Inc. (“BRS”), a registered
broker-dealer and FINRA member and an affiliate of B. Riley Principal Capital II, as a broker to effectuate resales, if any, of our Common
Stock that it may acquire from us pursuant to the Purchase Agreement, and that it may also engage one or more other registered broker-dealers
to effectuate resales, if any, of such Common Stock that it may acquire from us. Such resales will be made at prices and at terms then
prevailing or at prices related to the then current market price. Each such registered broker-dealer will be an underwriter within the
meaning of Section 2(a)(11) of the Securities Act. B. Riley Principal Capital II has informed us that each such broker-dealer it engages
to effectuate resales of our Common Stock on its behalf, excluding BRS, may receive commissions from B. Riley Principal Capital II for
executing such resales for B. Riley Principal Capital II and, if so, such commissions will not exceed customary brokerage commissions.
B.
Riley Principal Capital II is an affiliate of BRS, a registered broker-dealer and FINRA member, which will act as an executing broker
that will effectuate resales of our Common Stock that may be acquired by B. Riley Principal Capital II from us pursuant to the
Purchase Agreement to the public in this offering. Because B. Riley Principal Capital II will receive
all the net proceeds from such resales of our Common Stock made to the public through BRS, BRS is deemed to have a “conflict of
interest” within the meaning of FINRA Rule 5121. Consequently, this offering will be conducted in compliance with the provisions
of FINRA Rule 5121, which requires that a “qualified independent underwriter,” as defined in FINRA Rule 5121, participate
in the preparation of the registration statement that includes this prospectus and exercise the usual standards of “due diligence”
with respect thereto. Accordingly, we have engaged Seaport Global Securities LLC, a registered
broker-dealer and FINRA member (“Seaport”), to be the qualified independent underwriter in this offering and, in such capacity,
participate in the preparation of the registration statement that includes this prospectus and exercise the usual standards of “due
diligence” with respect thereto. The Company has agreed to pay Seaport a cash fee of $50,000
upon the initial filing of the registration statement that includes this prospectus with the SEC as consideration for its services and
to reimburse Seaport up to $5,000 for expenses
incurred in connection with acting as the qualified independent underwriter in this offering. B.
Riley Principal Capital II has agreed to reimburse us on the Commencement Date under the Purchase Agreement for the full amount of such
cash fee and expense reimbursement paid by us to Seaport. In accordance with FINRA Rule 5110,
such cash fee and expense reimbursement to be paid to Seaport for acting as the qualified independent underwriter in this offering are
deemed to be underwriting compensation in connection with sales of our Common Stock by B. Riley Principal Capital II to the public. Seaport
will receive no other compensation for acting as the qualified independent underwriter in this offering. In
accordance with FINRA Rule 5121, BRS is not permitted to sell shares of our Common Stock in this offering to an account over which it
exercises discretionary authority without the prior specific written approval of the account holder.
Except as set forth above,
we know of no existing arrangements between the selling stockholder and any other stockholder, broker, dealer, underwriter or agent relating
to the sale or distribution of the shares of our Common Stock offered by this prospectus.
Brokers, dealers, underwriters
or agents participating in the distribution of the shares of our Common Stock offered by this prospectus may receive compensation in the
form of commissions, discounts, or concessions from the purchasers, for whom the broker-dealers may act as agent, of the shares sold by
the selling stockholder through this prospectus. The compensation paid to any such particular broker-dealer by any such purchasers of
shares of our Common Stock sold by the selling stockholder may be less than or in excess of customary commissions. Neither we nor
the selling stockholder can presently estimate the amount of compensation that any agent will receive from any purchasers of shares of
our Common Stock sold by the selling stockholder.
We may from time to time file
with the SEC one or more supplements to this prospectus or amendments to the registration statement of which this prospectus forms a part
to amend, supplement or update information contained in this prospectus, including, if and when required under the Securities Act, to
disclose certain information relating to a particular sale of shares offered by this prospectus by the selling stockholder, including
with respect to any compensation paid or payable by the selling stockholder to any brokers, dealers, underwriters or agents that participate
in the distribution of such shares by the selling stockholder, and any other related information required to be disclosed under the Securities
Act.
We will pay the expenses incident
to the registration under the Securities Act of the offer and sale of the shares of our Common Stock covered by this prospectus by the
selling stockholder.
As consideration for its irrevocable
commitment to purchase our Common Stock at our direction under the Purchase Agreement, we have agreed to (i) issue to B. Riley Principal
Capital II 40,000 shares of our Common Stock as Commitment Shares, which Commitment Shares have a total aggregate value equal to 1.00%
of B. Riley Principal Capital II’s $10,000,000 total dollar amount purchase commitment under the Purchase Agreement (assuming a
value of $2.50 per Commitment Share, representing the Nasdaq official closing price of our Common Stock on the trading day immediately
prior to the date of the Purchase Agreement), upon execution of the Purchase Agreement and the Registration Rights Agreement and (ii)
pay B. Riley Principal Capital II a cash commitment fee in the amount of $75,000 (the “Cash Commitment Fee”), which is equal
to 0.75% of B. Riley Principal Capital II’s $10,000,000 total dollar amount purchase commitment under the Purchase Agreement, upon
the settlement of the first purchase, if any, that we direct B. Riley Principal Capital II to make under the Purchase Agreement. If we
do not direct B. Riley Principal Capital II to make any purchases under the Purchase Agreement, or if the Commencement does not occur,
then we have agreed to pay the $75,000 Cash Commitment Fee to B. Riley Principal Capital II within three trading days following the termination
of the Purchase Agreement in accordance with its terms. In accordance with FINRA Rule 5110, the 40,000 Commitment Shares and the $75,000
Cash Commitment Fee are deemed to be underwriting compensation in connection with sales of our shares of Common Stock by B. Riley Principal
Capital II to the public.
We have further agreed that
if, after the Commencement Date, the aggregate amount of cash proceeds received by B. Riley Principal Capital II from their resale of
all of the Commitment Shares is less than $100,000, or 1.00% of B. Riley Principal Capital II’s $10,000,000 total dollar amount
purchase commitment under the Purchase Agreement, then we will pay B. Riley Principal Capital II, in cash, the amount by which $100,000
exceeds the aggregate net proceeds received by B. Riley Principal Capital II from their resale of all of the Commitment Shares offered
through this prospectus. Furthermore, we have agreed that if B. Riley Principal Capital has not resold all of the Commitment Shares that
we had issued to them upon execution of the Purchase Agreement, all of which are being offered for resale through this prospectus, prior
to the earliest of (i) the effective date of the termination of the Purchase Agreement by us or B. Riley Principal Capital II in accordance
with its terms, (ii) the 121st calendar day after the date of this prospectus, (iii) the calendar day on which the effectiveness
of the registration statement that includes this prospectus lapses, or this prospectus otherwise becomes unavailable for any reason to
B. Riley Principal Capital II for the resale of all of the Commitment Shares being offered hereby, or (iv) the date on which our Common
Stock fails to be listed or has ceased to trade on Nasdaq (or another eligible national securities exchange under the Purchase Agreement)
for a period of three trading days, other than due to any material breach by B. Riley Principal Capital II of its obligations under the
Purchase Agreement, and if the aggregate amount of cash proceeds received by B. Riley Principal Capital II from their resale of any of
the Commitment Shares that B. Riley Principal Capital II was able to resell before such earliest date is less than $100,000, then we will
pay B. Riley Principal Capital II, in cash, the amount by which $100,000 exceeds the aggregate net proceeds received by B. Riley Principal
Capital II from their resale of the Commitment Shares that B. Riley Principal Capital II was able to resell before such earliest date,
in exchange for B. Riley Principal Capital II returning to us for cancelation all of the Commitment Shares we originally issued to them
that they were not able to resell before such earliest date.
Lastly, if, for any reason
whatsoever, other than due to any material breach by B. Riley Principal Capital II of its obligations under the Purchase Agreement or
the Registration Rights Agreement, either the registration statement that includes this prospectus is not declared effective by the SEC
or the Commencement fails to occur under the Purchase Agreement, in either case prior to the 181st calendar day after the date
of the Purchase Agreement (or [●], 2024) and, as a result, B. Riley Principal Capital II was not able to resell any of the Commitment
Shares we originally issued to them prior to such 181st calendar day, then we will pay $100,000 in cash to B. Riley Principal
Capital II, in exchange for B. Riley Principal Capital II returning to us for cancelation all of the Commitment Shares we originally issued
to them pursuant to the Purchase Agreement. In this prospectus, we sometimes refer to this cash “make-whole” payment that
we may be required to pay to B. Riley Principal Capital II under the Purchase Agreement under the circumstances described above (as applicable)
as the “Cash Make-Whole Payment.” We will not make any Cash Make-Whole Payment to B. Riley Principal Capital II if, after
the Commencement under the Purchase Agreement, the aggregate net proceeds received by B. Riley Principal Capital II from their resale
of all or any portion of the Commitment Shares being offered by this prospectus equals or exceeds $100,000. In
accordance with FINRA Rule 5110, the $100,000 Cash Make-Whole Payment that we may be required to pay to B. Riley Principal Capital II
under the Purchase Agreement is deemed to be underwriting compensation in connection with sales of our Common Stock by B. Riley Principal
Capital II to the public.
In addition, we have agreed
to reimburse B. Riley Principal Capital II for the reasonable legal fees and disbursements of B. Riley Principal Capital II’s legal
counsel in an amount not to exceed (i) $75,000 upon our execution of the Purchase Agreement and Registration Rights Agreement and (ii)
$5,000 per fiscal quarter, in each case in connection with the transactions contemplated by this Agreement and the Registration Rights
Agreement. In accordance with FINRA Rule 5110, these reimbursed fees and expenses are deemed to
be underwriting compensation in connection with sales of our Common Stock by B. Riley Principal Capital II to the public. Moreover, in
accordance with FINRA Rule 5110, the 3.5% fixed discount to current market prices of our Common Stock reflected in the purchase prices
payable by B. Riley Principal Capital II for our Common Stock that we may require it to purchase from us from time to time under the Purchase
Agreement is deemed to be underwriting compensation in connection with sales of our Common Stock by B. Riley Principal Capital II to the
public.
We also have agreed to indemnify
B. Riley Principal Capital II and certain other persons against certain liabilities in connection with the offering of shares of our Common
Stock offered hereby, including liabilities arising under the Securities Act or, if such indemnity is unavailable, to contribute amounts
required to be paid in respect of such liabilities. B. Riley Principal Capital II has agreed to indemnify us against liabilities
under the Securities Act that may arise from certain written information furnished to us by B. Riley Principal Capital II specifically
for use in this prospectus or, if such indemnity is unavailable, to contribute amounts required to be paid in respect of such liabilities.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling
persons, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities
Act and is therefore, unenforceable.
We estimate that the total
expenses for the offering will be approximately $[●].
B. Riley Principal Capital
II has represented to us that at no time prior to the date of the Purchase Agreement has B. Riley Principal Capital II, its sole member,
any of their respective officers, or any entity managed or controlled by B. Riley Principal Capital II or its sole member, engaged in
or effected, in any manner whatsoever, directly or indirectly, for its own account or for the account of any of its affiliates, any short
sale (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our Common Stock or any hedging transaction, which
establishes a net short position with respect to our Common Stock. B. Riley Principal Capital II has agreed that during the term
of the Purchase Agreement, none of B. Riley Principal Capital II, its sole member, any of their respective officers, or any entity managed
or controlled by B. Riley Principal Capital II or its sole member, will enter into or effect, directly or indirectly, any of the foregoing
transactions for its own account or for the account of any other such person or entity.
We have advised the selling
stockholder that it is required to comply with Regulation M promulgated under the Exchange Act. With certain exceptions, Regulation M
precludes the selling stockholder, any affiliated purchasers, and any broker-dealer or other person who participates in the distribution
from bidding for or purchasing, or attempting to induce any person to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete. Regulation M also prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the foregoing may affect the marketability of the securities offered
by this prospectus.
This offering will terminate
on the date that all shares of our Common Stock offered by this prospectus have been sold by the selling stockholder.
Our Common Stock is currently
listed on Nasdaq under the symbol “MDAI”.
B. Riley Principal Capital
II and/or one or more of its affiliates has provided, currently provides and/or from time to time in the future may provide various investment
banking and other financial services for us and/or one or more of our affiliates that are unrelated to the transactions contemplated by
the Purchase Agreement and the offering of shares for resale by B. Riley Principal Capital II to which this prospectus relates, for which
investment banking and other financial services they have received and may continue to receive customary fees, commissions and other compensation
from us, aside from any discounts, fees and other compensation that B. Riley Principal Capital II has received and may receive in connection
with the transactions contemplated by the Purchase Agreement, including (i) the $75,000 cash
commitment fee we have agreed to pay to B. Riley Principal Capital II and the 40,000 Commitment Shares we have agreed to issue to B. Riley
Principal Capital II as consideration for its irrevocable commitment to purchase shares of our common stock from us at our direction under
the Purchase Agreement, as well as the up to $100,000 Cash Make-Whole Payment we may be required
to pay B. Riley Principal Capital II to the extent the aggregate net proceeds received by B. Riley Principal Capital II from their
resale of all or any portion of the Commitment Shares being offered by this prospectus is less than $100,000, (ii)
the 3.5% fixed discount to current market prices of our common stock reflected in the purchase prices payable by B. Riley Principal Capital
II for our common stock that we may require it to purchase from us from time to time under the Purchase Agreement, and (iii) our reimbursement
of up to an aggregate of $115,000 of B. Riley Principal Capital II’s legal fees ($75,000
upon execution of the Purchase Agreement and $5,000 per
fiscal quarter for the maximum two year term of the Purchase Agreement) in connection with the transactions contemplated by the Purchase
Agreement and the Registration Rights Agreement.
EXHIBIT B
The business address of B. Riley Principal Capital
II, LLC (“BRPC II”) is 11100 Santa Monica Blvd., Suite 800, Los Angeles, California 90025. BRPC II’s principal business
is that of a private investor. BRPC II is a wholly-owned subsidiary of B. Riley Principal Investments, LLC (“BRPI”). As a
result, BRPI may be deemed to indirectly beneficially own the securities of the company held of record by BRPC II. B. Riley Financial,
Inc. (“BRF”) is the parent company of BRPC II and BRPI. As a result, BRF may be deemed to indirectly beneficially own the
securities of the company held of record by BRPC II and indirectly beneficially owned by BRPI. Bryant R. Riley is the Co-Chief Executive
Officer and Chairman of the Board of Directors of BRF. As a result, Bryant R. Riley may be deemed to indirectly beneficially own the securities
of the company held of record by BRPC II and indirectly beneficially owned by BRPI. Each of BRF, BRPI and Bryant R. Riley expressly disclaims
beneficial ownership of the securities of the company held of record by BRPC II, except to the extent of its/his pecuniary interest therein.
None of BRF, BRPI or BRPC II is a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or an independent
broker-dealer; however, each of BRF, BRPI, BRPC II and Bryant R. Riley is an affiliate of B. Riley Securities, Inc. (“BRS”),
a registered broker-dealer and FINRA member, and Bryant R. Riley is an associated person of BRS. BRS will
act as an executing broker that will effectuate resales of Common Stock that have
been and may be acquired by BRPC II from the company pursuant to the Purchase Agreement to the public in this offering.
30
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