NAOV NanoVibronix Inc

On June 21, 2019, NanoVibronix, Inc., a Delaware corporation (the “ Company ”), entered into and closed a private placement Securities Purchase Agreement (the “ Securities Purchase Agreement ”) with certain existing stockholders (the “ Investors ”), relating to the sale to such Investors of (i) 1,600,000 shares of the Company’s Series E Convertible Preferred Stock, par value $0.001 per share (the “ Series E Preferred Stock ”), and warrants (the “ Warrants ”) to purchase 1,600,000 shares of Series E Preferred Stock at an exercise price of $2.50 per share, at a purchase price per unit of $2.00 (the “ Financing ”), for aggregate gross proceeds of $3,200,000 (excluding the exercise of the Warrants issued in the Financing).

Each share of Series E Preferred Stock is convertible, at any time and from time to time from and after the earlier of (1) the Stockholder Approval Date (as defined below) or (2) the date the Common Stock is no longer listed on the Nasdaq Stock Market or any other national securities exchange, at the option of the Series E Holder thereof, into one share of common stock, par value $0.001 per share (the “ Common Stock ”), of the Company, provided that the holder of the Series E Preferred Stock would be prohibited from converting Series E Preferred Stock into shares of Common Stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own more than 9.99% of the total number of shares of Common Stock then issued and outstanding (the “ Beneficial Ownership Limitation ”). Notwithstanding the forgoing, so long as the Common Stock is listed on the Nasdaq Stock Market or any other national securities exchange, (i) prior to the Stockholder Approval Date, the holders of the Series E Preferred Stock may convert shares of Series E Preferred Stock into shares of Common Stock in an aggregate amount equal to 9.9% of the number of issued and outstanding shares of Common Stock on the business day immediately preceding the date of the Securities Purchase Agreement, and (ii) if the stockholders do not approve the Stockholder Resolutions (as defined below) at the Stockholders Meeting (as defined below), the holders of the Series E Preferred Stock may convert shares of Series E Preferred Stock into shares of Common Stock in an aggregate amount equal to 19.9% of the number of issued and outstanding shares of Common Stock on the business day immediately preceding the date of the Securities Purchase Agreement, if (A) the Company has filed a Listing of Additional Shares application with the Nasdaq Stock Market relating to the issuance of the shares of Common Stock upon conversion of the Series E preferred Stock, and (B), the Nasdaq Stock Market approves the listing and issuance of such shares of Common Stock, in each case, subject to the Beneficial Ownership Limitation that, following the Stockholder Approval Date, may be waived upon not less than 61 days’ prior written notice to the Company.

Upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary (a “ Liquidation ”), each Series E Holder shall be entitled to receive the amount of cash, securities or other property to which such holder would be entitled to receive with respect to such shares of Series E Preferred Stock if such shares had been converted to Common Stock immediately prior to such Liquidation.

Subject to receiving Stockholder Approval and the Beneficial Ownership Limitation, holders of Series E Preferred Stock will be entitled to vote with the holders of the Common Stock on an as-converted basis.

The Company has agreed to used commercially reasonable efforts to provide each stockholder entitled to vote at a special meeting of stockholders of the Company (the “ Stockholder Meeting ”) a proxy statement soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions (“ Stockholder Resolutions ”) providing for the Company’s issuance of all of the shares of Common Stock issuable upon conversion of the Series E Preferred Stock in accordance with applicable law and the rules and regulations of the Nasdaq Stock Market (such affirmative approval being referred to herein as the “ Stockholder Approval ”, and the date such Stockholder Approval is obtained, the “ Stockholder Approval Date ”), and the Company has also agreed to use its commercially reasonable efforts to solicit its stockholders’ approval of such Stockholder Resolutions and cause the Board of Directors of the Company to recommend to the stockholders that they approve the Stockholder Resolutions. The Company agreed to use its commercially reasonable efforts to cause the Stockholder Meeting to be promptly called and held not later than ninetieth (90 ^th ) day following the closing date of Financing.

The Company has also agreed to prepare and file with the Securities and Exchange Commission (the “ SEC ”) within 60 days of the Stockholder Approval Date a registration statement covering the resale of the shares of Common Stock issuable upon conversion of the Series E Preferred Stock (the “ Underlying Shares ”), and the shares of Common Stock issuable upon conversion of the Series E Preferred Stock issuable upon exercise of the Warrants (together with the Underlying Shares, the “ Registrable Securities ”), and cause such registration statement to become effective under the Securities Act of 1933, as amended (the “ Securities Act ”), within 120 days of the Stockholder Approval Date if there is no review of the registration statement by the SEC or within 150 days of the Stockholder Approval Date if there is a review of the registration statement by the SEC. If the registration statement (i) is not filed within 60 days after the Stockholder Approval Date, (ii) is not declared effective within 120 days (or 150 days, as applicable) of the Stockholder Approval Date, or (iii) ceases for any reason to be effective at any time prior to the expiration of its Effectiveness Period (as defined in the Securities Purchase Agreement) for more than 20 consecutive trading days in any 12 month period, then the Company shall pay to each Investor an amount in cash, as liquidated damages and not as a penalty, equal to 1.0% of the purchase price paid by such Investor for the Series E Preferred Stock and Warrants purchased under the Securities Purchase Agreement per month until the registration statement is filed or declared effective (as applicable); provided that the total amount of payments shall not exceed, when aggregated with all such payments paid to all Investors, 5% of the aggregate purchase price of the Series E Preferred Stock Warrants purchased pursuant to the Securities Purchase Agreement.

The foregoing description of the terms of the Series E Preferred Stock, the Warrants, the Securities Purchase Agreement, and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Securities Purchase Agreement, the Certificate of Designation of the Series E Preferred Stock (the “ Certificate of Designation ”), and the form of Warrant, which are attached hereto as Exhibit 10.1 , 4.1 and 4.2 , respectively, and are incorporated herein by reference.