UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of January 2024 (Report No. 2)
Commission file number: 001-38041
SCISPARC LTD.
(Translation of registrant’s name into English)
20 Raul Wallenberg Street, Tower A,
Tel Aviv 6971916 Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
CONTENTS
On January 21, 2024,
SciSparc Ltd., or the Company, entered into a Standby Equity Purchase Agreement, or the SEPA, with YA II PN, Ltd. or YA. Pursuant to
the SEPA, the Company will be able to sell up to $20,000,000, or the Commitment Amount, of its ordinary shares, no par value, or the
Shares, at the Company’s sole option, any time during the three-year period following the execution date of the SEPA. Pursuant
to the terms of the SEPA, any Shares sold to YA will be priced at 97% of the market price, which is defined as the lowest daily VWAP
(as defined in the SEPA) of the Shares during the three consecutive trading days commencing on the trading day of the
Company’s delivery of an Advance Notice (as defined in the SEPA) to YA. Any sale of Shares pursuant to the SEPA is subject to
certain limitations, including that YA is not permitted to purchase any Shares that would result in it owning more than 4.99% of the
Company’s Shares.
Subject to certain conditions precedent as described in the SEPA, the
Company may request pre-paid advances of the Commitment Amount, in an amount up to $5.0 million, each a Pre-Paid Advance. Each Pre-Paid
Advance will be evidenced by a promissory note, each, a Promissory Note. Each Promissory Note will fully mature 24-months following its
issuance and shall accrue interest on the outstanding principal balance thereon at a rate of 5% per annum, increasing to 18% per annum
upon an Event of Default (as defined in the Promissory Note). Beginning 150 days after the issuance of a Promissory Note, the Company
shall pay to YA a monthly installment payment of 10% of the original principal amount of the Promissory Note and accrued interest, payable
in cash or by submitting an Advance Notice, where YA will offset the amount due to be paid to the Company under such notice against an
equal amount of the monthly installment amount, at the Company’s option. If the Company elects to pay in cash, the installment amount
shall also include a payment premium in the amount of 5% of the principal amount of the installment payment. The Promissory Note contains
customary representations and warranties of the Company and Events of Default.
The Company is not obligated
to utilize any of the $20,000,000 available under the SEPA and there are no minimum commitments or minimum use penalties. The total
amount of funds that ultimately can be raised under the SEPA over the three-year term will depend on the market price for the Shares and
the number of Shares actually sold. The SEPA does not impose any restrictions on the Company’s operating activities.
Pursuant to the SEPA, the
Company also agreed to pay YA, a commitment fee, or the Commitment Fee, equal to $200,000, or 1% of the Commitment Amount, payable in
an amount of the Company’s ordinary shares equal to $200,000 divided by the daily VWAP of the ordinary
shares on the trading day immediately prior to the SEPA and also agreed to pay to an affiliate of YA a structuring fee in the amount of
$10,000. As of the date of this Report of Foreign Private Issuer on Form 6-K, the Company
is obligated to issue 55,293 Shares to YA to satisfy the Commitment Fee in full, or the Commitment Fee Shares.
Pursuant to the SEPA, the
Company is required to register the Shares eligible to be sold pursuant to the SEPA and the Commitment Fee Shares, referred to as the
Registrable Shares. The Company, in its sole discretion, may choose when to file a registration statement registering the Registrable
Shares for resale by YA.
The Company intends to use
the net proceeds from the sale of the Shares, if any, for working capital and general corporate purposes.
The Shares to be issued pursuant
to the SEPA and the Commitment Fee Shares are exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant
to Section 4(a)(2) thereof. This Report on Form 6-K shall not constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the Shares or the Commitment Fee Shares in any state or jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The descriptions of the SEPA
and Promissory Note set forth above are qualified in their entirety by reference to the full text of those documents, which are attached
hereto as Exhibits 10.1 and 4.1, respectively.
On
January 24, 2024, the Company issued a press release titled “SciSparc Ltd. Announces $20 Million Standby Equity Purchase Agreement,”
a copy of which is furnished as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K.
This
Report of Foreign Private Issuer on Form 6-K is incorporated by reference into the Company’s registration statements on
Form F-3 (File No. 333-275305,
File No. 333-269839, File No. 333-266047,
File No. 333-233417,
File No. 333-248670 and
File No. 333-255408)
and on Form S-8 (File No. 333-225773) filed with the SEC to
be a part thereof from the date on which this report is submitted, to the extent not superseded by documents or reports subsequently
filed or furnished.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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SciSparc Ltd. |
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Date: January 25, 2024 |
By: |
/s/ Oz Adler |
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Name: |
Oz Adler |
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Title: |
Chief Executive Officer and
Chief Financial Officer |
3
Exhibit 4.1
THIS NOTE HAS NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THIS NOTE HAS BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.
SCISPARC
LTD.
Promissory
Note
Original Principal
Amount: $[_________] |
Issuance Date: [_________]
Number: SPRC-[_]
FOR VALUE RECEIVED, SCISPARC
LTD., a company organized under the laws of the State of Israel corporation (the “Company”), hereby promises to pay to
the order of YA II PN, LTD., or its registered assigns (the “Holder”), the amount set out above as the Original Principal
Amount (as reduced pursuant to the terms hereof pursuant to repayment, redemption, conversion or otherwise, the “Principal”),
in each case when due, and to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate
(as defined below) from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due
and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance with the
terms hereof). Certain capitalized terms used herein are defined in Section (10). The Issuance Date is the date of the first issuance
of this Promissory Note (the “Note”) regardless of the number of transfers and regardless of the number of instruments,
which may be issued to evidence such Note. This Note was issued with a 5% original issue discount.
This Note is being issued pursuant
to Section 2.05 of the Standby Equity Purchase Agreement, dated [__________] (as may be amended, amended and restated, extended, supplemented
or otherwise modified in writing from time to time, the “SEPA”), between the Company and YA II PN, LTD.
(1) GENERAL
TERMS
(a) Maturity
Date. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding Principal, accrued
and unpaid Interest, and any other amounts outstanding pursuant to the terms of this Note. The “Maturity Date” shall
be [__________]1, as may be extended with
the prior written consent of the Holder.
(b) Interest
Rate and Payment of Interest. Interest shall accrue on the outstanding Principal balance hereof at an annual rate equal to 5% (“Interest
Rate”), which Interest Rate shall increase to an annual rate of 18% upon an Event of Default for so long as it remains uncured.
In the event that such Event of Default is subsequently cured (and no other Event
of Default then exists, including, without limitation, for the Company’s failure to pay such Interest at the default rate), the
adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of
such cure; provided that the interest as calculated and unpaid at such rate during the continuance of such Event of Default shall continue
to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure
of such Event of Default. Interest shall be calculated based on a 365-day year and the actual number of days elapsed, to the extent
permitted by applicable law.
(c) Monthly
Payments. On or before each date (each, an “Installment Date”) set forth on the repayment schedule attached hereto
as Exhibit I (the “Repayment Schedule”), the Company shall repay a portion of the outstanding balance of this
Note in an amount equal to the Principal amount set forth on the Repayment Schedule as of such Repayment Date, plus all accrued and unpaid
Interest on this Note as of such Installment Date (collectively, the “Installment Amount”). With respect to the payment
of any Installment Amount by the Company hereunder, the Company shall, at its own option, repay each Installment Amount either (i) in
cash on or before the Installment Date, or (ii) by submitting an Advance Notice (as defined in the SEPA) (an “Advance Repayment”),
or a series of Advance Notices, each with an Advance Date (as defined in the SEPA) on or before the applicable Installment Date, or any
combination of (i) or (ii) as determined by the Company. In respect of any Installment Amount, or portion thereof, to be repaid by the
Company in accordance with (i) of this Section 2(a), the Company shall pay to the Holder such Installment Amount to the Holder by wire
transfer of immediately available funds in cash on or before such Installment Date, which cash payment shall include the Payment Premium.
If the Company elects an Advance Repayment in accordance with (ii) of this Section 1(c), for all or a portion of an Installment Amount,
then the Company shall deliver an Advance Notice to the Holder in accordance with the terms and conditions of the SEPA, that will have
an Advance Date on or before the applicable Installment Date. Upon the closing of such Advance Notice in accordance with Section 2.02
of the SEPA, the Holder shall offset the amount due to be paid by the Holder to the Company under the SEPA against an equal amount of
the Installment Amount to be paid by the Advance Repayment. No Payment Premium shall apply in respect of an Advance Repayment. If, on
the Installment Date any portion of the Installment Amount remains unpaid, the Company shall repay such outstanding Payment Amount as
a cash repayment pursuant to (i) of this Section 1(c). The Repayment Schedule may be modified from time to time upon mutual consent.
For so long as this Note is
outstanding, unless otherwise agreed by the Holder, if the Company delivers an Advance Notice under the SEPA, the Company shall be deemed
to have elected an Advance Repayment in respect of such Advance Notice up to the Installment Amount due on such next Installment Date,
or subsequent Installment Dates, until this Note is fully repaid.
| 1 | 24 Months from the Issuance Date. |
(d) Payment
Dates. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.
(e) Prepayment.
The Company may prepay at any time and from time to time, in whole or in part, the outstanding Principal balance, plus the Payment Premium,
and accrued interest on the principal amount being prepaid to the date of repayment.
(2) EVENTS
OF DEFAULT.
(a) An
“Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it
shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body):
(i) the
Company’s failure to pay to the Holder any amount of Principal, Interest, or other amounts when and as due under this Note or any other
Transaction Document;
(ii) The
Company or any Subsidiary of the Company shall commence, or there shall be commenced against the Company or any Subsidiary of the Company
under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company or any Subsidiary
of the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any Subsidiary
of the Company any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of sixty one (61) days; or the
Company or any Subsidiary of the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Company or any Subsidiary of the Company suffers any appointment of any custodian, private or court
appointed receiver or the like for it or all or substantially all of its property which continues undischarged or unstayed for a period
of sixty one (61) days; or the Company or any Subsidiary of the Company makes a general assignment of all or substantially all of its
assets for the benefit of creditors; or the Company or any Subsidiary of the Company shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due; or the Company or any Subsidiary of the Company shall call
a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any Subsidiary
of the Company shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing;
or any corporate or other action is taken by the Company or any Subsidiary of the Company for the purpose of effecting any of the foregoing;
(iii) The
Company or any Subsidiary of the Company shall default beyond applicable grace and cure periods in any of its obligations under any other
debenture or any, mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which
there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of the Company or any Subsidiary of the Company in an amount exceeding $100,000, whether such indebtedness
now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable;
(iv) The
Ordinary Shares shall cease to be quoted or listed for trading, as applicable, on any Primary Market for a period of ten (10) consecutive
Trading Days;
(v) The
Company’s failure to timely file with the Commission any Periodic Report on or before the due date of such filing as established
by the Commission, it being understood, for the avoidance of doubt, that due date includes any permitted filing deadline extension under
Rule 12b-25 under the Exchange Act and such failure is not cured within 7 days;
(vi) Any
representation or warranty made or deemed to be made by the Company in or in connection with any Transaction Document, or any waiver hereunder
or thereunder, shall prove to have been incorrect in any material respect (or, in the case of any such representation or warranty already
qualified by materiality, such representation or warranty shall prove to have been incorrect) when made or deemed made;
(vii) Any
material provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder, ceases to be in full force and effect; or the Company purports in writing to revoke, terminate (other
than in line with the relevant termination provisions) or rescind any Transaction Document;
(viii) the
Company uses the proceeds of the issuance of this Note, whether directly or indirectly, and whether immediately, incidentally or ultimately,
to purchase or carry margin stock (within the meaning of Regulations T, U and X the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or thereof), or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose; or
(ix) Any
Event of Default (as defined in the Other Notes or in any Transaction Document other than this Note) occurs with respect to any Other
Notes, or any breach of any material term of any other debenture, note, or instrument held by the Holder in the Company or any agreement
between or among the Company and the Holder; or
(x) The
Company shall fail to observe or perform any material covenant, agreement or warranty contained in, or otherwise commit any material breach
or default of any provision of this Note (except as may be covered by Section (2)(a)(i) through (2)(a)(x) hereof) or any other Transaction
Document, which is not cured or remedied within the time prescribed therein, or if no time is prescribed, withing ten (10) Business Days.
(b) During
the time that any portion of this Note is outstanding, if any Event of Default has occurred and is continuing, (other than an event with
respect to the Company described in Section (2)(a)(ii)), the full unpaid Principal amount of this Note, together with interest and other
amounts owing in respect thereof, to the date of acceleration shall become at the Holder’s election given by notice pursuant to Section
(4), immediately due and payable in cash; provided that, in the case of any event with respect to the Company described in Section (2)(a)(ii),
the full unpaid Principal amount of this Note, together with interest and other amounts owing in respect thereof to the date of acceleration,
shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company. The Holder need not provide and the Company hereby waives any additional presentment, demand, protest
or other notice of any kind, (other than required notice of conversion and notices required pursuant to this Note) and the Holder may
immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such
declaration may be rescinded and annulled by the Holder in writing at any time prior to payment hereunder. No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent thereon. For the purposes hereof, an Event of Default relating
to default in payment is “continuing” if it has not been waived, and an Event of Default relating to circumstances
other than a default in payment is “continuing” if it has not been remedied or waived.
(3) REISSUANCE
OF THIS NOTE.
(a) Transfer.
If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and
deliver upon the order of the Holder a new Note (in accordance with Section (3)(d)), registered in the name of the registered transferee
or assignee, representing the outstanding Principal being transferred by the Holder (along with any accrued and unpaid interest thereof)
and, if less then the entire outstanding Principal is being transferred, a new Note (in accordance with Section (3)(d)) to the Holder
representing the outstanding Principal not being transferred.
(b) Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute and deliver
to the Holder a new Note (in accordance with Section (3)(d)) representing the outstanding Principal.
(c) Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Note or Notes (in accordance with Section (3)(d)) representing in the aggregate the outstanding Principal of
this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the Holder at the time
of such surrender.
(d) Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms hereof, such new Note (i) shall be of like
tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding, (iii) shall
have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have
the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest from the Issuance Date.
(4) NOTICES. Any
notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing by
letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered personally or
(ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly
addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail addresses for such
communications shall be:
If to the Company, to: |
SciSparc Ltd.
20 Raul Wallenberg Street, Tower A
Tel Aviv 697196 Israel |
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Attention: |
Oz Adler |
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Telephone: |
(+972) (3) 717-5777 |
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Email: |
oz@scisparc.com |
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with a copy (which shall not constitute notice) to: |
Meitar | Law Offices |
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16 Abba Hillel Road |
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Ramat-Gan 5250608 Israel |
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Telephone: |
+972-3-6103766 |
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Attention: |
Dr. Shachar Hadar, Adv. |
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E-mail: |
shacharh@meitar.com |
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Sullivan & Worcester LLP |
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1633 Broadway, 32nd Floor |
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New York, New York |
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Attention: |
Oded Har-Even |
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Telephone: |
212-660-5002 |
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Email: |
ohareven@sullivanlaw.com |
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If to the Holder: |
YA II PN, Ltd |
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c/o Yorkville Advisors Global, LLC
1012 Springfield Avenue |
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Mountainside, NJ 07092 |
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Attention: |
Mark Angelo |
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Telephone: |
201-985-8300 |
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Email: |
Legal@yorkvilleadvisors.com |
or at such other address and/or
email and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three
(3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice,
consent, waiver or other communication, (ii) electronically generated by the sender’s email service provider containing the time, date,
recipient email address or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal
service, receipt by email or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii)
above, respectively.
(5) Except
as expressly provided herein, no provision of this Note shall alter or impair the obligations of the Company, which are absolute and unconditional,
to pay the Principal of, interest and other charges (if any) on, this Note at the time, place, and rate, and in the currency, herein prescribed.
This Note is a direct obligation of the Company. As long as this Note is outstanding, the Company shall not and shall cause their subsidiaries
not to, without the consent of the Holder, amend its certificate of incorporation, bylaws or other charter documents so as to adversely
affect any rights of the Holder.
(6) CHOICE
OF LAW; VENUE; WAIVER OF JURY TRIAL
(a) Governing
Law. This Note and the rights and obligations of the Parties hereunder shall, in all respects, be governed by, and construed in accordance
with, the laws (excluding the principles of conflict of laws) of the State of New York (the “Governing Jurisdiction”)
(including Section 5-1401 and Section 5-1402 of the General Obligations Law of the State of New York), including all matters of construction,
validity and performance.
(b) Jurisdiction;
Venue; Service.
(i) The
Company hereby irrevocably consents to the non-exclusive personal jurisdiction of the state courts of the Governing Jurisdiction and,
if a basis for federal jurisdiction exists, the non-exclusive personal jurisdiction of any United States District Court for the Governing
Jurisdiction.
(ii) The
Company agrees that venue shall be proper in any court of the Governing Jurisdiction selected by the Holder or, if a basis for federal
jurisdiction exists, in any United States District Court in the Governing Jurisdiction. The Company waives any right to object to the
maintenance of any suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract
or in tort or otherwise, in any of the state or federal courts of the Governing Jurisdiction on the basis of improper venue or inconvenience
of forum.
(iii) Any
suit, claim, action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or tort or otherwise,
brought by the Company against the Holder arising out of or based upon this Note or any matter relating to this Note, or any other Transaction
Document, or any contemplated transaction, shall be brought in a court only in the Governing Jurisdiction. The Company shall not file
any counterclaim against the Holder in any suit, claim, action, litigation or proceeding brought by the Holder against the Company in
a jurisdiction outside of the Governing Jurisdiction unless under the rules of the court in which the Holder brought such suit, claim,
action, litigation or proceeding the counterclaim is mandatory, and not permissive, and would be considered waived unless filed as a counterclaim
in the suit, claim, action, litigation or proceeding instituted by the Holder against the Company. The Company agrees that any forum outside
the Governing Jurisdiction is an inconvenient forum and that any suit, claim, action, litigation or proceeding brought by the Company
against the Holder in any court outside the Governing Jurisdiction should be dismissed or transferred to a court located in the Governing
Jurisdiction. Furthermore, the Company irrevocably and unconditionally agrees that it will not bring or commence any suit, claim, action,
litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the
Holder arising out of or based upon this Note or any matter relating to this Note, or any other Transaction Document, or any contemplated
transaction, in any forum other than the courts of the State of New York sitting in New York County, and the United States District Court
of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally
submits to the jurisdiction of such courts and agrees that all claims in respect of any such suit, claim, action, litigation or proceeding
may be heard and determined in such New York State Court or, to the fullest extent permitted by applicable law, in such federal court.
The Company and the Holder agree that a final judgment in any such suit, claim, action, litigation or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
(iv) The
Company and the Holder irrevocably consent to the service of process out of any of the aforementioned courts in any such suit, claim,
action, litigation or proceeding by the mailing of copies thereof by registered or certified mail postage prepaid, to it at the address
provided for notices in this Note, such service to become effective thirty (30) days after the date of mailing.
(v) Nothing
herein shall affect the right of the Holder to serve process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against the Company or any other Person in the Governing Jurisdiction or in any other jurisdiction.
(c) THE
PARTIES MUTUALLY WAIVE ALL RIGHT TO TRIAL BY JURY OF ALL CLAIMS OF ANY KIND ARISING OUT OF OR BASED UPON THIS NOTE OR ANY MATTER RELATING
TO THIS NOTE, OR ANY OTHER TRANSACTION DOCUMENT, OR ANY CONTEMPLATED TRANSACTION. THE PARTIES ACKNOWLEDGE THAT THIS IS A WAIVER OF A LEGAL
RIGHT AND THAT THE PARTIES EACH MAKE THIS WAIVER VOLUNTARILY AND KNOWINGLY AFTER CONSULTATION WITH COUNSEL OF THEIR RESPECTIVE CHOICE.
THE PARTIES AGREE THAT ALL SUCH CLAIMS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION, WITHOUT A JURY.
(7) If
the Company fails to strictly comply with the terms of this Note, then the Company shall reimburse the Holder promptly for all fees, costs
and expenses, including, without limitation, attorneys’ fees and expenses incurred by the Holder in any action in connection with
this Note, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in connection with the rendering
of legal advice as to the Holder’s rights, remedies and obligations, (ii) collecting any sums which become due to the Holder, (iii)
defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal; or (iv) the protection, preservation or enforcement
of any rights or remedies of the Holder.
(8) Any
waiver by the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach
of such provision or of any breach of any other provision of this Note. The failure of the Holder to insist upon strict adherence to any
term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Note. Any waiver must be in writing.
(9) If
any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision
is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall
be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable
rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or
any portion of the Principal of or Interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly
waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded
the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law
has been enacted.
(10) CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a) “Business
Day” means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day
on which banking institutions are authorized or required by law or other government action to close.
(b) “Commission”
means the Securities and Exchange Commission.
(c) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
(d) “Other
Notes” means any other notes issued pursuant to the SEPA and any other debentures, notes, or other instruments issued in exchange,
replacement, or modification of the foregoing.
(e) “Payment
Premium” means an amount equal to 5% of the Principal amount being paid.
(f) “Periodic
Reports” shall mean the Company’s (i) Annual Report on Form 20-F, (ii) semi-annual report to be filed on Form 6-K or periodic
report to be filed on Form 6-K and (iii) all other reports required to be filed by the Company with the Commission under applicable laws
and regulations (including, without limitation, Regulation S-K) for so long as any amounts are outstanding under this Note or any Other
Note; provided that all such Periodic Reports shall include, when filed, all information, financial statements, audit reports (when
applicable) and other information required to be included in such Periodic Reports in compliance with all applicable laws and regulations.
(g) “Person”
means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof
or a governmental agency.
(h) “Primary
Market” shall mean the Nasdaq Capital Market; provided however, that in the event the Ordinary Shares are ever listed or traded
on the Nasdaq Global Select Market, the Nasdaq Global Market, the New York Stock Exchange, the NYSE American or the OTCBB, then the “Principal
Market” shall mean such other market or exchange on which the Ordinary Shares are then listed or traded to the extent such other
market or exchange is the principal trading market or exchange for the Ordinary Shares.
(i) “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(j) “Subsidiary”
shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority
of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration
of such Person, and the foregoing are collectively referred to herein as “Subsidiaries.”
(k) “Trading
Day” shall have the meaning set forth in the SEPA.
(l) “Transaction
Document” means, each of, the Other Notes, the SEPA, and any and all documents, agreements, instruments or other items executed
or delivered in connection with any of the foregoing.
[Signature Page Follows]
IN WITNESS WHEREOF,
the Company has caused this Promissory Note to be duly executed by a duly authorized officer as of the date set forth above.
EXHIBIT I
REPAYMENT SCHEUDLE
[For illustrative purposes only based on a Note
in the Principal amount of $1,500,000. Actual Repayment Schedule will depend on the actual principal amount of each Note.]
Principal Amount: | |
$ | 1,500,000 | |
Issuance Date: | |
| 1/15/24 | |
Days Following Issuance Date | |
Principal
Amount | | |
Accrued and
Unpaid
Interest(1) | | |
Installment
Amount | |
90 | |
$ | - | | |
$ | 18,493 | | |
$ | 18,493 | |
120 | |
$ | - | | |
$ | 6,164 | | |
$ | 6,164 | |
150 | |
$ | 150,000 | | |
$ | 6,164 | | |
$ | 156,164 | |
180 | |
$ | 150,000 | | |
$ | 5,548 | | |
$ | 155,548 | |
210 | |
$ | 150,000 | | |
$ | 4,932 | | |
$ | 154,932 | |
240 | |
$ | 150,000 | | |
$ | 4,315 | | |
$ | 154,315 | |
270 | |
$ | 150,000 | | |
$ | 3,699 | | |
$ | 153,699 | |
300 | |
$ | 150,000 | | |
$ | 3,082 | | |
$ | 153,082 | |
330 | |
$ | 150,000 | | |
$ | 2,466 | | |
$ | 152,466 | |
360 | |
$ | 150,000 | | |
$ | 1,849 | | |
$ | 151,849 | |
390 | |
$ | 150,000 | | |
$ | 1,233 | | |
$ | 151,233 | |
420 | |
$ | 150,000 | | |
$ | 616 | | |
$ | 150,616 | |
| |
$ | 1,500,000 | | |
$ | 58,562 | | |
$ | 1,558,562 | |
| (1) | Estimated
Accrued and Unpaid Interest. Actual amount may differ on an applicable Installment Date. |
Exhibit 10.1
EXECUTION VERSION
STANDBY EQUITY PURCHASE AGREEMENT
THIS STANDBY EQUITY PURCHASE
AGREEMENT (this “Agreement”) dated as of January 21, 2024 is made by and between YA II PN, LTD., a Cayman
Islands exempt limited partnership (the “Investor”), and SCISPARC LTD., a company incorporated under the laws
of the State of Israel (the “Company”).
WHEREAS, the parties
desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and sell to the
Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to $20 million of the Company’s
ordinary shares, no par value per share (the “Ordinary Shares”); and
WHEREAS, the Ordinary
Shares are listed for trading on the Nasdaq Capital Market under the symbol “SPRC;” and
WHEREAS, the offer
and sale of the Ordinary Shares issuable hereunder will be made in reliance upon Section 4(a)(2) under the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the “Securities Act”), or upon such other exemption
from the registration requirements of the Securities Act as may be available with respect to any or all of the transactions to be made
hereunder.
WHEREAS, in consideration
of the Investor’s execution and delivery of this Agreement, the Company shall issue to the Investor the Commitment Shares pursuant
to and in accordance with Section 12.04 herein.
NOW, THEREFORE,
the parties hereto agree as follows:
Article I. Certain Definitions
“Additional Shares”
shall have the meaning set forth in Section 2.01(d)(ii).
“Adjusted Advance
Amount” shall have the meaning set forth in Section 2.01(d)(i).
“Advance”
shall mean any issuance and sale of Ordinary Shares by the Company to the Investor pursuant to Article II hereof.
“Advance Date”
shall mean the first Trading Day after expiration of the applicable Pricing Period for each Advance.
“Advance Notice”
shall mean a written notice in the form of Exhibit A attached hereto to the Investor executed by an officer of the Company and setting
forth the number of Ordinary Shares that the Company desires to issue and sell to the Investor.
“Advance Notice Date”
shall mean each date the Company is deemed to have delivered (in accordance with Section 2.01(b) of this Agreement) an Advance Notice
to the Investor, subject to the terms of this Agreement.
“Advance Shares”
shall mean the Ordinary Shares that the Company shall issue and sell to the Investor pursuant to Advances hereunder.
“Affiliate”
shall have the meaning set forth in Section 3.07.
“Agreement”
shall have the meaning set forth in the preamble of this Agreement.
“Applicable Laws”
shall mean all applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines and codes having
the force of law, whether local, national, or international, as amended from time to time, including without limitation (i) all applicable
laws that relate to money laundering, terrorist financing, financial record keeping and reporting, (ii) all applicable laws that relate
to anti-bribery, anti-corruption, books and records and internal controls, including the United States Foreign Corrupt Practices Act of
1977, and (iii) any Sanctions laws.
“Average Price”
shall mean a price per Share 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.
“Black Out Period”
shall have the meaning set forth in Section 6.01(e).
“Closing”
shall have the meaning set forth in Section 2.02.
“Commitment Amount”
shall mean $20,000,000 of Ordinary Shares.
“Commitment Fee”
shall have the meaning set forth in Section 12.04.
“Commitment Period”
shall mean the period commencing on the Effective Date and expiring upon the date of termination of this Agreement in accordance with
Section 10.01.
“Commitment Shares”
shall have the meaning set forth in Section 12.04.
“Company”
shall have the meaning set forth in the preamble of this Agreement.
“Company Indemnitees”
shall have the meaning set forth in Section 5.02.
“Condition Satisfaction
Date” shall have the meaning set forth in Section 7.01.
“Current Report”
shall have the meaning set forth in Section 6.12.
“Daily Traded Amount”
shall mean the product obtained by multiplying the daily trading volume of the Company’s Ordinary Shares on the Principal Market
during regular trading hours as reported by Bloomberg L.P., by the VWAP for such Trading Day.
“Effective Date”
shall mean the date hereof.
“Environmental Laws”
shall have the meaning set forth in Section 4.13.
“Exchange Act”
shall mean the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Excluded Day”
shall have the meaning set forth in Section 2.01(d)(i).
“Hazardous Materials”
shall have the meaning set forth in Section 4.13.
“Indemnified Liabilities”
shall have the meaning set forth in Section 5.01.
“Investor”
shall have the meaning set forth in the preamble of this Agreement.
“Investor Indemnitees”
shall have the meaning set forth in Section 5.01.
“Market Price”
shall mean the lowest of the daily VWAPs of the Ordinary Shares during the relevant Pricing Period, other than the daily VWAP on any Excluded
Days.
“Material Adverse
Effect” shall mean any event, occurrence or condition that has had or would reasonably be expected to have (i) a material adverse
effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein, (ii) a material adverse
effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its Subsidiaries, taken
as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its
obligations under this Agreement.
“Material Outside
Event” shall have the meaning set forth in Section 6.08.
“Maximum Advance
Amount” in respect of each Advance Notice means the greater of: (i) an amount equal to 100% of the Daily Traded Amount during
the five Trading Days immediately preceding an Advance Notice, or (ii) $500,000 of Ordinary Shares, based on the market price of the Ordinary
Shares on the Principal Market at the time of delivery of each Advance Notice.
“Minimum Acceptable
Price” or “MAP” shall mean the minimum price notified by the Company to the Investor in each Advance Notice,
if applicable.
“OFAC”
shall have the meaning set forth in Section 4.30.
“Ordinary Shares”
shall have the meaning set forth in the recitals of this Agreement.
“Ownership Limitation”
shall have the meaning set forth in Section 2.01(c)(i).
“Person”
shall mean an individual, a corporation, a partnership, a limited liability company, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
“Plan of Distribution”
shall mean the section of a Registration Statement disclosing the plan of distribution of the Shares.
“Pricing Period”
shall mean the three (3) consecutive Trading Days commencing on the Advance Notice Date.
“Principal Market”
shall mean the Nasdaq Capital Market; provided however, that in the event the Ordinary Shares are ever listed or traded on the Nasdaq
Global Select Market, the Nasdaq Global Market, the New York Stock Exchange, the NYSE American or the OTCQB, then the “Principal
Market” shall mean such other market or exchange on which the Ordinary Shares are then listed or traded to the extent such other
market or exchange is the principal trading market or exchange for the Ordinary Shares.
“Prospectus”
shall mean any prospectus (including, without limitation, all amendments and supplements thereto) used by the Company in connection with
a Registration Statement.
“Prospectus Supplement”
shall mean any prospectus supplement to a Prospectus filed with the SEC from time to time pursuant to Rule 424(b) under the Securities
Act, including the documents incorporated by reference therein, including, without limitation, any prospectus supplement to be filed in
accordance with Section 6.01 hereof.
“Purchase Price”
shall mean the price per Advance Share obtained by multiplying the Market Price by 97%.
“Registrable Securities”
shall mean (i) the Shares, and (ii) any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend
or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise.
“Registration Limitation”
shall have the meaning set forth in Section 2.01(c)(ii).
“Registration Statement”
shall mean a registration statement on Form F-1 or Form F-3 or on such other form promulgated by the SEC for which the Company then qualifies
and which counsel for the Company shall deem appropriate, and which form shall be available for the registration of the resale by the
Investor of the Registrable Securities under the Securities Act, which registration statement provides for the resale from time to time
of the Shares as provided herein.
“Regulation D”
shall mean the provisions of Regulation D promulgated under the Securities Act.
“Sanctions”
shall have the meaning set forth in Section 4.30.
“Sanctioned Countries”
shall have the meaning set forth in Section 4.30.
“SEC” shall
mean the U.S. Securities and Exchange Commission.
“SEC Documents”
shall have the meaning set forth in Section 4.05.
“Securities Act”
shall have the meaning set forth in the recitals of this Agreement.
“Settlement Document”
shall have the meaning set forth in Section 2.02(a).
“Shares”
shall mean the Commitment Shares and the Ordinary Shares to be issued from time to time hereunder pursuant to an Advance.
“Subsidiaries”
shall mean any Person in which the Company, directly or indirectly, (x) owns a majority of the outstanding capital stock or holds a majority
of the equity or similar interest of such Person or (y) controls or operates all or substantially all of the business, operations or administration
of such Person, and the foregoing are collectively referred to herein as “Subsidiaries.”
“Trading Day”
shall mean any day during which the Principal Market shall be open for business.
“Transaction Documents”
shall have the meaning set forth in Section 4.02.
“VWAP” shall mean for any Trading
Day, the daily volume weighted average price of the Ordinary Shares for such Trading Day on the Principal Market during regular trading
hours as reported by Bloomberg L.P.
Article II. Advances
Section 2.01 Advances;
Mechanics. Upon the terms and subject to the conditions of this Agreement, during the Commitment Period, the Company, at 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, Ordinary Shares by the delivery to the Investor of Advance Notices on the following terms:
| (a) | Advance Notice. At any time during the Commitment Period the Company may require the Investor to
purchase Ordinary Shares by delivering an Advance Notice to the Investor, subject to the satisfaction or waiver by the Investor of the
conditions set forth in Section 7.01, and in accordance with the following provisions: |
| (i) | The Company shall, in its sole discretion, select the number of Ordinary Shares, not to exceed the Maximum
Advance Amount, it desires to issue and sell to the Investor in each Advance Notice and the time it desires to deliver each Advance Notice. |
| (ii) | There shall be no mandatory minimum Advances and no non-usages fee for not utilizing the Commitment Amount
or any part thereof. |
| (b) | Date of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with the instructions
set forth on the bottom of Exhibit A attached hereto. An Advance Notice shall be deemed delivered on (i) the day it is received
by the Investor if such notice is received by email at or before 9:00 a.m. Eastern Time (or later if waived by the Investor in its sole
discretion), or (ii) the immediately succeeding day if it is received by email after 9:00 a.m. Eastern Time. |
| (c) | Advance Limitations. Regardless of the number of Ordinary Shares requested by the Company in the
Advance Notice, the final number of Advance Shares to be issued and sold pursuant to an Advance shall be reduced (if at all) in accordance
with each of the following limitations: |
| (i) | Ownership Limitation; Commitment Amount. At the request of the Company, the Investor shall inform
the Company of the number of Ordinary Shares the Investor beneficially owns. Notwithstanding anything to the contrary contained in this
Agreement, the Investor shall not be obligated to purchase or acquire, and the Company shall not issue or sell to the Investor, any Ordinary
Shares under this Agreement which, when aggregated with all other Ordinary Shares 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 and its affiliates (on an aggregated basis) to exceed 4.99% of the then outstanding voting power or number of Ordinary
Shares (the “Ownership Limitation”). Upon the written request of the Investor, the Company shall promptly (but no later
than the next business day on which the transfer agent for the Ordinary Shares is open for business) confirm orally or in writing to the
Investor the number of Ordinary Shares then outstanding. In connection with each Advance Notice delivered by the Company, any portion
of the Advance that would (i) cause the Investor to exceed the Ownership Limitation or (ii) cause the aggregate number of Shares issued
and sold to the Investor hereunder to exceed the Commitment Amount, shall automatically be withdrawn with no further action required by
the Company, and such Advance Notice shall be deemed automatically modified to reduce the amount of the Advance requested by an amount
equal to such withdrawn portion; provided that in the event of any such automatic withdrawal and automatic modification, the Investor
will promptly notify the Company of such event. |
| (ii) | Registration Limitation. In no event shall an Advance exceed the number of Ordinary Shares registered
in respect of the transactions contemplated hereby under the Registration Statement then in effect (the “Registration Limitation”).
In connection with each Advance Notice, any portion of an Advance that would exceed the Registration Limitation shall automatically be
withdrawn with no further action required by the Company and such Advance Notice shall be deemed automatically modified to reduce the
aggregate amount of the requested Advance by an amount equal to such withdrawn portion; provided that in the event of any such automatic
withdrawal and automatic modification, the Investor will promptly notify the Company of such event. |
| (iii) | Compliance with Rules of Principal Market. Prior to the date hereof, the Company has taken all
actions required pursuant to Nasdaq Rule 5615(a)(3) to duly and validly rely on the exemption for foreign private issuers from applicable
rules and regulations of the Nasdaq by adopting the home country practice (the “Home Country Practice”) in connection
with the transactions contemplated hereunder (including an exemption from any Nasdaq rules that would otherwise require seeking shareholder
approval in respect of such transactions). The Company may issue Ordinary Shares to the Investor in connection with this Agreement without
regard to the limitations imposed by Nasdaq Rule 5635(d). The Company’s entry into and compliance with the obligations of the transactions
contemplated hereunder are not prohibited by its home country’s laws. |
| (d) | Minimum Acceptable Price. |
| (i) | With respect to each Advance Notice, the Company may notify the Investor of the MAP with respect to such
Advance by indicating a MAP on such Advance Notice. If no MAP is specified in an Advance Notice, then no MAP shall be in effect in connection
with such Advance. Each Trading Day during a Pricing Period for which (A) with respect to each Advance Notice with a MAP, the VWAP of
the Ordinary Shares is below the MAP in effect with respect to such Advance Notice, or (B) there is no VWAP (each such day, an “Excluded
Day”), shall result in an automatic reduction to the amount of the Advance set forth in such Advance Notice by one third (the
resulting amount of each Advance being the “Adjusted Advance Amount”), and each Excluded Day shall be excluded from
the Pricing Period for purposes of determining the Market Price. |
| (ii) | The total Advance Shares in respect of each Advance (after reductions have been made to arrive at the
Adjusted Advance Amount, if any) shall be automatically increased by such number of Ordinary Shares (the “Additional Shares”)
equal to the greater of (a) the number of Ordinary Shares sold by the Investor on such Excluded Day(s), if any, or (b) such number of
Ordinary Shares elected to be purchased by the Investor, and the purchase price paid per share for each Additional Share shall be equal
to the MAP in effect with respect to such Advance Notice multiplied by 97%, provided that this increase shall not cause the total Advance
to exceed the amount set forth in the original Advance Notice or any limitations set forth in Section 2.01(c). |
| (e) | Unconditional Contract. Notwithstanding any other provision in this Agreement, the Company and
the Investor acknowledge and agree that upon the Investor’s receipt of a valid Advance Notice from the Company, the parties shall
be deemed to have entered into an unconditional contract binding on both parties for the purchase and sale of the Advance Shares pursuant
to such Advance Notice in accordance with the terms of this Agreement and (i) subject to Applicable Laws and (ii) subject to Section
3.08, the Investor may sell Ordinary Shares during the Pricing Period. |
Section 2.02 Closings.
The closing of each Advance and each sale and purchase of Advance Shares (each, a “Closing”) shall take place as soon
as practicable on or after each Advance Date in accordance with the procedures set forth below. The parties acknowledge that the Purchase
Price is not known at the time the Advance Notice is delivered (at which time the Investor is irrevocably bound) but shall be determined
on each Closing as set forth herein. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations
as set forth below:
| (a) | On each Advance Date, the Investor shall deliver to the Company a written document, in the form attached
hereto as Exhibit B (each a “Settlement Document”), setting forth the final number of Shares to be purchased by the
Investor (taking into account any adjustments pursuant to Section 2.01), the Market Price, the Purchase Price, the aggregate proceeds
to be paid by the Investor to the Company, and a report by Bloomberg, L.P. indicating the VWAP for each of the Trading Days during the
Pricing Period (or, if not reported on Bloomberg, L.P., another reporting service reasonably agreed to by the parties), in each case in
accordance with the terms and conditions of this Agreement. |
| (b) | Promptly after receipt of the Settlement Document with respect to each Advance, the Investor shall pay
to the Company the aggregate Purchase Price of the Shares (as set forth in the Settlement Document) in cash in immediately available funds
to an account designated by the Company in writing and transmit notification to the Company that such funds transfer has been requested.
Promptly after receipt of such notice of payment with respect to each Advance (and, in any event, not later than two (2) Trading Days
after such receipt), the Company will, or will cause its transfer agent to, electronically transfer such number of Advance Shares to be
purchased by the Investor (as set forth in the Settlement Document) by crediting the Investor’s account or its designee’s
account at the Depository Trust Company through its Deposit Withdrawal at Custodian System or by such other means of delivery as may be
mutually agreed upon by the parties hereto, and transmit notification to the Investor that such share transfer has been requested. No
fractional shares shall be issued, and any fractional amounts shall be rounded to the next whole number of shares. To facilitate the transfer
of the Ordinary Shares by the Investor, the Ordinary Shares will not bear any restrictive legends so long as there is an effective Registration
Statement covering the resale of such Ordinary Shares (it being understood and agreed by the Investor that notwithstanding the lack of
restrictive legends, the Investor may only sell such Ordinary Shares pursuant to the Plan of Distribution set forth in the Prospectus
included in the Registration Statement and otherwise in compliance with the requirements of the Securities Act (including any applicable
prospectus delivery requirements) or pursuant to an available exemption). |
| (c) | On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents,
instruments and writings expressly required to be delivered by either of them pursuant to this Agreement in order to implement and effect
the transactions contemplated herein. |
| (d) | Notwithstanding anything to the contrary in this Agreement, if on any day during the Pricing Period (i)
the Company notifies Investor that a Material Outside Event has occurred, or (ii) the Company notifies the Investor of a Black Out Period,
the parties agree that the pending Advance shall end and the final number of Advance Shares to be purchased by the Investor at the Closing
for such Advance shall be equal to the number of Ordinary Shares sold by the Investor during the applicable Pricing Period prior to the
notification from the Company of a Material Outside Event or Black Out Period. |
Section 2.03 Hardship.
| (a) | In the event the Investor sells Ordinary Shares after receipt of an Advance Notice and the Company fails
to perform its obligations as mandated in Section 2.02, the Company agrees that in addition to and in no way limiting the rights and obligations
set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without
limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable
legal fees and expenses, but excluding punitive, indirect, incidental or consequential damages), as incurred, arising out of or in connection
with such default by the Company and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly
agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically
enforce (subject to Applicable Laws and the rules of the Principal Market), without the posting of a bond or other security, the terms
and provisions of this Agreement. |
| (b) | In the event the Company provides an Advance Notice and the Investor fails to perform its obligations
as mandated in Section 2.02, the Investor agrees that in addition to and in no way limiting the rights and obligations set forth in Article
V hereto and in addition to any other remedy to which the Company is entitled at law or in equity, including, without limitation, specific
performance, it will hold the Company harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses,
but excluding punitive, indirect, incidental or consequential damages), as incurred, arising out of or in connection with such default
by the Investor and acknowledges that irreparable damage may occur in the event of any such default. It is accordingly agreed that the
Company shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce (subject
to the Securities Act and other rules of the Principal Market), without the posting of a bond or other security, the terms and provisions
of this Agreement. |
Section 2.04 Completion
of Resale Pursuant to the Registration Statement. After the Investor has purchased the full Commitment Amount and has completed the
subsequent resale of the full Commitment Amount pursuant to the Registration Statement, Investor will notify the Company in writing (which
may be by e-mail) that all subsequent resales are completed and the Company will be under no further obligation to maintain the effectiveness
of the Registration Statement.
Section 2.05 Pre-Paid
Advances. Subject to the satisfaction of the conditions set forth in Annex I attached hereto, upon the request of the Company,
the Investor shall advance to the Company up to $5,000,000 (after deducting any discounts set forth herein) of the Commitment Amount hereunder
(each, a “Pre-Paid Advance”), which shall be evidenced by a promissory note in the form attached hereto as Exhibit
C (the “Promissory Note”). Each Pre-Paid Advance shall be advanced to the Company in whole or in part, within two
days of each request made by the Company (each, a “Pre-Advance Closing”). The Company may request up to $1,500,000
of Pre-Paid Advances (the “Pre-Effective Advances”) at any time from the date hereof until the earlier of (i) the date
that is 120 days following the date hereof, or (ii) the effective date of the initial Registration Statement, and the Company may request
up to $3,500,000 of Pre-Paid Advances less the amount of any Pre-Effective Advances (the “Post-Effective Advances”)
at any time from the effectiveness of the Registration Statement until the date that is 60 days following the effective date of the Registration
Statement, in each case subject to the satisfaction of the conditions set forth in Annex I attached hereto. Each Pre-Advance Closing
shall occur remotely by conference call and electronic delivery of documentation. At each Pre-Advance Closing the Investor shall advance
to the Company the amount of the Pre-Paid Advance, less a discount in the amount equal to 5% of the amount of the Pre-Paid Advance, in
immediately available funds to an account designated by the Company in writing, and the Company shall deliver the Promissory Note with
a principal amount equal to the full amount of the Pre-Paid Advance, duly executed on behalf of the Company. Unless otherwise agreed by
the Investor and the Company, any Advances delivered while the Promissory Note is outstanding shall first be used to satisfy any Installment
Amount (as defined in the Promissory Note) coming due.
Article III. Representations
and Warranties of the Investor
The Investor represents and
warrants to the Company, as of the date hereof, as of each Advance Notice Date and as of each Advance Date that:
Section 3.01 Organization
and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands and
has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to purchase or
acquire Shares in accordance with the terms hereof. The decision to invest and the execution and delivery of this Agreement by the Investor,
the performance by the Investor of its obligations hereunder and the consummation by the Investor of the transactions contemplated hereby
have been duly authorized and require no other proceedings on the part of the Investor. The undersigned has the right, power and authority
to execute and deliver this Agreement and all other instruments on behalf of the Investor or its shareholders. This Agreement has been
duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will
constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.
Section 3.02 Evaluation
of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the
merits and risks of, and bearing the economic risks entailed by, an investment in the Ordinary Shares of the Company and of protecting
its interests in connection with the transactions contemplated hereby. The Investor acknowledges and agrees that its investment in the
Company involves a high degree of risk, and that the Investor may lose all or a part of its investment.
Section 3.03 No Legal,
Investment or Tax Advice from the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the
transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely
on such counsel and advisors and not on any statements or representations of the Company or any of the Company’s representatives
or agents for legal, tax, investment or other advice with respect to the Investor’s acquisition of Ordinary Shares hereunder, the
transactions contemplated by this Agreement or the laws of any jurisdiction, and the Investor acknowledges that the Investor may lose
all or a part of its investment.
Section 3.04 Investment
Purpose. The Investor is acquiring the Ordinary Shares 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, except pursuant to sales registered under or exempt from the registration
requirements of the Securities Act; provided, however, that by making the representations herein, the Investor does not agree,
or make any representation or warranty, to hold any of the Shares for any minimum or other specific term and reserves the right to dispose
of the Shares at any time in accordance with, or pursuant to, the Registration Statement filed pursuant to this 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 Shares. The Investor acknowledges that it will be disclosed
as an “underwriter” and a “selling shareholder” 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 3.05 Accredited
Investor. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D. The
Investor has properly completed, executed and delivered to the Company a completed Accredited Investor Questionnaire in the form annexed
hereto as Exhibit D (dated as of the date hereof).
Section 3.06 Information.
The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and
operations of the Company and information the Investor deemed material to making an informed investment decision. The Investor and its
advisors (and its counsel), if any, have been afforded the opportunity to ask questions of the Company and its management and have received
answers to such questions. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors
(and its counsel), 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. The Investor acknowledges and agrees that the Company has not made to the
Investor, and the Investor acknowledges and agrees it has not relied upon, any representations and warranties of the Company, its employees
or any third party other than the representations and warranties of the Company contained in this Agreement. The Investor understands
that its investment involves a high degree of risk. The Investor has sought such accounting, legal and tax advice, as it has considered
necessary to make an informed investment decision with respect to the transactions contemplated hereby.
Section 3.07 Not an Affiliate.
The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled
by, or is under common control with the Company or any “Affiliate” of the Company (as that term is defined in Rule
405 promulgated under the Securities Act).
Section 3.08 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 principal account, any (i) “short sale” (as such
term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Ordinary Shares or (ii) hedging transaction, which establishes
a net short position with respect to the Ordinary Shares that remains in effect as of the date of this Agreement.
Section 3.09 General
Solicitation. Neither the Investor, nor any of its affiliates, nor any person acting on its or their behalf, has engaged or will
engage in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or
sale of the Ordinary Shares by the Investor.
Article IV. Representations
and Warranties of the Company
Except as set forth in the
SEC Documents, the Company represents and warrants to the Investor that, as of the date hereof, each Advance Notice Date and each Advance
Date (other than representations and warranties which address matters only as of a certain
date, which shall be true and correct as written as of such certain date):
Section 4.01 Organization
and Qualification. Each of the Company and its Subsidiaries is an entity duly organized and validly existing under the laws of their
respective jurisdiction of organization, and has the requisite power and authority to own its properties and to carry on its business
as now being conducted. Each of the Company and its Subsidiaries is duly qualified to do business and is in good standing (to the extent
applicable) in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.
Section 4.02 Authorization,
Enforcement, Compliance with Other Instruments. The Company has the requisite corporate power and authority to enter into and perform
its obligations under this Agreement and the other Transaction Documents and to issue the Shares in accordance with the terms hereof and
thereof. The execution and delivery by the Company of this Agreement and the other Transaction Documents, and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Ordinary Shares) have
been or (with respect to consummation) will be duly authorized by the Company’s board of directors (or a committee thereof) and
no further consent or authorization will be required by the Company, its board of directors or its shareholders. This Agreement and the
other Transaction Documents to which the Company is a party have been (or, when executed and delivered, will be) duly executed and delivered
by the Company and, assuming the execution and delivery thereof and acceptance by the Investor, constitute (or, when duly executed and
delivered, will be) the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies
and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction Documents”
means, collectively, this Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto
in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
Section 4.03 Authorization
of the Shares. The Shares to be issued under this Agreement have been, or with respect to Shares to be purchased by the Investor pursuant
to an Advance Notice, will be, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a
duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, duly and validly
authorized and issued and fully paid and nonassessable, free and clear of any pledge, lien, encumbrance, security interest or other claim,
including any statutory or contractual preemptive rights, resale rights, rights of first refusal or other similar rights, and will be
registered pursuant to Section 12 of the Exchange Act. The Shares, when issued, will conform to the description thereof set forth in or
incorporated into the Prospectus.
Section 4.04 No Conflict.
The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of the Ordinary Shares) will not (i) result in a violation
of the articles of incorporation or other organizational documents of the Company or its Subsidiaries (with respect to consummation, as
the same may be amended prior to the date on which any of the transactions contemplated hereby are consummated), (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or its Subsidiaries
is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities
laws and regulations) applicable to the Company or its Subsidiaries or by which any property or asset of the Company or its Subsidiaries
is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that would not reasonably be expected
to have a Material Adverse Effect.
Section 4.05 SEC Documents;
Financial Statements. Since January 1, 2022, the Company has timely filed (giving effect to permissible extensions in accordance with
Rule 12b-25 under the Exchange Act) all reports, schedules, forms, statements and other documents required to be filed by it with the
SEC pursuant to the Exchange Act and all documents and disclosures that have been incorporated by reference therein (all such documents
hereinafter referred to as the “SEC Documents”). The Company has delivered or made available to the Investor through
the SEC’s website at http://www.sec.gov, true and complete copies of the SEC Documents, as applicable. Except as disclosed in amendments
or subsequent filings to the SEC Documents, as of its filing date (or, if amended or superseded by a filing prior to the date hereof,
on the date of such amended or superseded filing), each SEC Documents complied in all material respects with the requirements of the Exchange
Act or the Securities Act, as applicable, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and did not contain any untrue statement of a material fact or omitted 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 were made, not misleading.
Section 4.06 Financial
Statements. The consolidated financial statements of the Company included or incorporated by reference in the SEC Documents, together
with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and
the Subsidiaries 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 and have been prepared in compliance with the requirements of the Securities Act and Exchange
Act and in conformity with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting
Standard Board, applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements may not contain all footnotes required by IFRS, and fairly present
in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit
adjustments. There are no financial statements (historical or pro forma) that are required to be included or incorporated by reference
in the SEC Documents that are not included or incorporated by reference as required, and the Company and the Subsidiaries do not have
any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not described in the SEC
Documents (excluding the exhibits thereto). The interactive data in eXtensible Business Reporting Language included or incorporated by
reference in the SEC Documents fairly presents the information called for in all material respects and has been prepared in accordance
with the SEC’s rules and guidelines applicable thereto.
Section 4.07 Registration
Statement and Prospectus. The Company and the transactions contemplated by this Agreement meet the requirements for and comply with
the conditions for the use of Form F-1 under the Securities Act. Each Registration Statement and the offer and sale of Shares as contemplated
hereby, if and when filed, will meet the requirements of Rule 415 under the Securities Act and comply in all material respects with
said Rule. Any statutes, regulations, contracts or other documents that are required to be described in a Registration Statement or a
Prospectus, or any amendment or supplement thereto, or to be filed as exhibits to a Registration Statement have been so described or filed.
Copies of each Registration Statement, any Prospectus, and any such amendments or supplements thereto and all documents incorporated by
reference therein that will be filed with the Commission will be delivered, or will be available through EDGAR, to the Investor and its
counsel. The Company has not distributed and, prior to the later to occur of each Advance Date and completion of the distribution of the
Shares, will not distribute any offering material in connection with the offering or sale of the Shares other than a Registration Statement,
Prospectus contained therein, and each other prospectus supplement.
Section 4.08 No Misstatement
or Omission. Each Registration Statement, when it becomes effective, and any Prospectus, on the date of such Prospectus or amendment
or supplement, conformed and will conform in all material respects with the requirements of the Securities Act. At each Advance Date,
the Registration Statement, and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities
Act. Each Registration Statement, when it becomes effective, will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein not misleading. Each Prospectus will not include
an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. The documents incorporated by reference in a Prospectus or any Prospectus Supplement did not,
and any further documents filed and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement
of a material fact or omit to state a material fact required to be stated in such document or necessary to make the statements in such
document, in light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or
omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by the Investor
specifically for use in the preparation thereof.
Section 4.09 Conformity
with Securities Act and Exchange Act. Each Registration Statement, each Prospectus, or any amendment or supplement thereto, and the
documents incorporated by reference in each Registration Statement, Prospectus or any amendment or supplement thereto, when such documents
are filed with the SEC under the Securities Act or the Exchange Act or become effective under the Securities Act, as the case may be,
will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.
Section 4.10 Equity Capitalization.
As of the date hereof, the authorized capital of the Company consists of 75,000,000 Ordinary Shares. As of the date hereof, the Company
had 708,438 Ordinary Shares outstanding.
The Ordinary Shares are registered
pursuant to Section 12(b) of the Exchange Act and is currently listed on a Principal Market under the trading symbol “SPRC.”
Other than as disclosed in the SEC Documents, the Company has taken no action designed to, or likely to have the effect of, terminating
the registration of the Ordinary Shares under the Exchange Act, delisting the Ordinary Shares from the Principal Market, nor has the Company
received any notification that the Commission or the Principal Market is contemplating terminating such registration or listing. To the
Company’s knowledge, it is in compliance with all applicable listing requirements of the Principal Market other than as provided
in the SEC Documents.
Section 4.11 Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade
names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights, if any, necessary to conduct their respective businesses as now conducted, except
as would not cause a Material Adverse Effect. The Company and its Subsidiaries have not received written notice of any infringement by
the Company or its Subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names,
service marks, service mark registrations, or trade secrets, except as would not cause a Material Adverse Effect. To the knowledge of
the Company, there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened
against the Company or its Subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service
names, service marks, service mark registrations, trade secret or other infringement; and, except as would not cause a Material Adverse
Effect, the Company is not aware of any facts or circumstances which might give rise to any of the foregoing.
Section 4.12 Employee
Relations. Neither the Company nor any of its Subsidiaries is involved in any labor dispute nor, to the knowledge of the Company or
any of its Subsidiaries, has any such dispute threatened, in each case which is reasonably likely to cause a Material Adverse Effect.
Section 4.13 Environmental
Laws. The Company and its Subsidiaries (i) have not received written notice alleging any failure to comply in all material respects
with all Environmental Laws (as defined below), (ii) have received all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have not received written notice alleging any failure to comply with
all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure
to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term “Environmental
Laws” means all applicable federal, state and local laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation,
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.
Section 4.14 Title.
Except as would not cause a Material Adverse Effect, the Company (or its Subsidiaries) has indefeasible fee simple or leasehold title
to its properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest other than such as are not material to the business of the Company. Any real property and facilities held under lease by the
Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.
Section 4.15 Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries
are engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have
a Material Adverse Effect.
Section 4.16 Regulatory
Permits. Except as would not cause a Material Adverse Effect, the Company and its Subsidiaries possess all material certificates,
authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to own their respective
businesses, and neither the Company nor any such Subsidiary has received any written notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permits.
Section 4.17 Internal
Accounting Controls. 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 generally accepted accounting principles 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, and management is not aware of any material weaknesses that are not disclosed in the SEC Documents
as and when required.
Section 4.18 Absence of
Litigation. Other than as disclosed in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or
by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Ordinary
Shares or any of the Company’s Subsidiaries, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.
Section 4.19 Subsidiaries.
The Company does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, association
or other business entity other than the Subsidiaries.
Section 4.20 Tax Status.
Each of the Company and its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments
and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested
in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to
the periods to which such returns, reports or declarations apply. The Company has not received written notification of any unpaid taxes
in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries
know of no basis for any such claim where failure to pay would cause a Material Adverse Effect.
Section 4.21 Certain Transactions.
Except as not required to be disclosed pursuant to Applicable Laws and other than as disclosed in the SEC Documents none of the officers
or directors of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring payments to or from any officer or director, or to the knowledge of the
Company, any corporation, partnership, trust or other entity in which any officer or director has a substantial interest or is an officer,
director, trustee or partner.
Section 4.22 Rights of
First Refusal. The Company is not obligated to offer the Ordinary Shares offered hereunder on a right of first refusal basis to any
third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third
parties.
Section 4.23 [Reserved].
Section 4.24 Acknowledgment
Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor is acting solely in the capacity
of an arm’s length investor with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges
that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement
and the transactions contemplated hereunder and any advice given by the Investor or any of its representatives or agents in connection
with this Agreement and the transactions contemplated hereunder is merely incidental to the Investor’s purchase of the Shares hereunder.
The Company is aware and acknowledges that it shall not be able to request Advances under this Agreement if the Registration Statement
is not effective or if any issuances of Ordinary Shares pursuant to any Advances would violate any rules of the Principal Market. The
Company acknowledges and agrees that it is capable of evaluating and understanding, and understands and accepts, the terms, risks and
conditions of the transactions contemplated by this Agreement.
Section 4.25 Finder’s
Fees. Neither the Company nor any of the Subsidiaries has incurred any liability for any finder’s fees, brokerage commissions
or similar payments in connection with the transactions herein contemplated.
Section 4.26 Relationship
of the Parties. Neither the Company, nor any of its Subsidiaries, affiliates, nor any person acting on its or their behalf is a client
or customer of the Investor or any of its affiliates and neither the Investor nor any of its affiliates has provided, or will provide,
any services to the Company or any of its affiliates, its subsidiaries, or any person acting on its or their behalf. The Investor’s
relationship to Company is solely as investor as provided for in the Transaction Documents.
Section 4.27 Operations.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with and neither
the Company nor the Subsidiaries, nor any director, officer, or employee of the Company or any Subsidiary nor, to the Company’s
knowledge, any agent, affiliate or other person acting on behalf of the Company or any Subsidiary has, not complied with Applicable Law;
and no action, suit or proceeding by or before any governmental authority involving the Company or any of its Subsidiaries with respect
to Applicable Laws is pending or, to the knowledge of the Company, threatened.
Section 4.28 [Reserved].
Section 4.29 Compliance
with Laws. The Company and each of its Subsidiaries are in compliance with Applicable Laws; the Company has not received a notice
of non-compliance, nor knows of, nor has reasonable grounds to know of, any facts that any director, officer, or employee of the Company
or any Subsidiary nor, to the Company’s knowledge, any agent, affiliate or other person acting on behalf of the Company or any Subsidiary
has, has not complied with Applicable Laws, or could give rise to a notice of non-compliance with Applicable Laws, and is not aware of
any pending change or contemplated change to any applicable law or regulation or governmental position; in each case that would have a
Material Adverse Effect.
Section 4.30 Sanctions
Matters. Neither the Company nor any of its Subsidiaries or, to the knowledge of the Company, any director, officer or controlled
affiliate of the Company or any director or officer of any Subsidiary, is a Person that is, or is owned or controlled by a Person that
is (i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Asset Control
(“OFAC”), the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant
sanctions authorities, including, without limitation, designation on OFAC’s Specially Designated Nationals and Blocked Persons List
or OFAC’s Foreign Sanctions Evaders List or other relevant sanctions authority (collectively, “Sanctions”), or
(ii) located, organized or resident in a country or territory that is the subject of Sanctions that broadly prohibit dealings with
that country or territory (including, without limitation, the Crimea, Zaporizhzhia and Kherson regions, the Donetsk People’s Republic
and Luhansk People’s Republic in Ukraine, Cuba, Iran, North Korea, Russia, Sudan and Syria (the “Sanctioned Countries”)).
Neither the Company nor any of its Subsidiaries will, directly or indirectly, use the proceeds from the sale of Advance Shares, or lend,
contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (a) for the purpose
of funding or facilitating any activities or business of or with any Person or in any country or territory that, at the time of such funding
or facilitation, is the subject of Sanctions or is a Sanctioned Country, or (b) in any other manner that will result in a violation
of Sanctions or Applicable Laws by any Person (including any Person participating in the transactions contemplated by this Agreement,
whether as underwriter, advisor, investor or otherwise). For the past five years, neither the Company nor any of its Subsidiaries has
engaged in, and is now not engaged in, any dealings or transactions with any Person, or in any country or territory, that at the time
of the dealing or transaction is or was the subject of Sanctions or was a Sanctioned Country. Neither the Company nor any of its Subsidiaries
nor, to the Company’s knowledge, any director, officer or controlled affiliate of the Company or any of its Subsidiaries, has ever
had funds blocked by a United States bank or financial institution, temporarily or otherwise, as a result of OFAC concerns.
Article V. Indemnification
The Investor and the Company
represent to the other the following with respect to itself:
Section 5.01 Indemnification
by the Company. In consideration of the Investor’s execution and delivery of this Agreement and acquiring the Shares hereunder,
and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and
hold harmless the Investor and its investment manager, Yorkville Advisors Global, LP, and each of their respective officers, directors,
managers, members, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated
by this Agreement) and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the “Investor Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and reasonable and documented expenses in connection therewith (irrespective
of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable,
documented attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by the Investor Indemnitees
or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any
related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided,
however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance
upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion therein;
(b) any material misrepresentation or breach of any material representation or material warranty made by the Company in this Agreement
or any other certificate, instrument or document contemplated hereby or thereby; or (c) any material breach of any material covenant,
material agreement or material obligation of the Company contained in this Agreement or any other certificate, instrument or document
contemplated hereby or thereby. To the extent that the foregoing undertaking by the Company may be unenforceable under Applicable Law,
the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible
under Applicable Law.
Section 5.02 Indemnification
by the Investor. In consideration of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s
other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers,
directors, shareholders, employees and agents (including, without limitation, those retained in connection with the transactions contemplated
by this Agreement) and each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities incurred
by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any
amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Investor will only be liable for written information relating to the Investor
furnished to the Company by or on behalf of the Investor specifically for inclusion in the documents referred to in the foregoing indemnity,
and will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with
written information furnished to the Investor by or on behalf of the Company specifically for inclusion therein; (b) any misrepresentation
or breach of any representation or warranty made by the Investor in this Agreement or any instrument or document contemplated hereby or
thereby executed by the Investor; or (c) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement
or any other certificate, instrument or document contemplated hereby or thereby executed by the Investor. To the extent that the foregoing
undertaking by the Investor may be unenforceable under Applicable Laws, the Investor shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities, which is permissible under Applicable Laws.
Section 5.03 Notice of
Claim. Promptly after receipt by an Investor Indemnitee or Company Indemnitee of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving an Indemnified Liability, such Investor Indemnitee or Company Indemnitee,
as applicable, shall, if a claim for an Indemnified Liability in respect thereof is to be made against any indemnifying party under this
Article V, deliver to the indemnifying party a written notice of the commencement thereof; but the failure to so notify the indemnifying
party will not relieve it of liability under this Article V except to the extent the indemnifying party is prejudiced by such failure.
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 reasonably satisfactory to
the indemnifying party and the Investor Indemnitee or Company Indemnitee, as the case may be; provided, however, that an Investor Indemnitee
or Company Indemnitee shall have the right to retain its own counsel with the actual and reasonable third party fees and expenses of not
more than one counsel for such Investor Indemnitee or Company Indemnitee to be paid by the indemnifying party, if, in the reasonable opinion
of counsel retained by the indemnifying party, the representation by such counsel of the Investor Indemnitee or Company Indemnitee and
the indemnifying party would be inappropriate due to actual or potential differing interests between such Investor Indemnitee or Company
Indemnitee and any other party represented by such counsel in such proceeding. The Investor Indemnitee or Company Indemnitee shall cooperate
fully 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 Investor Indemnitee or Company Indemnitee which
relates to such action or claim. The indemnifying party shall keep the Investor Indemnitee or Company Indemnitee reasonably apprised 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, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Investor
Indemnitee or Company Indemnitee, 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 Investor Indemnitee or Company Indemnitee of a release
from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party
shall be subrogated to all rights of the Investor Indemnitee or Company Indemnitee with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The indemnification required by this Article V shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, as and when bills are received and payment therefor
is due.
Section
5.04 Remedies. The remedies provided for in this Article V are not exclusive and shall not limit any right or remedy
which may be available to any indemnified person at law or equity. The obligations of
the parties to indemnify or make contribution under this Article V shall survive expiration
or termination of this Agreement.
Section 5.05 Limitation
of liability. Notwithstanding the foregoing, no party shall be entitled to recover from the other party for punitive, indirect, incidental
or consequential damages.
Article VI.
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 Commitment Period:
Section 6.01 Registration
Statement.
| (a) | Filing of a Registration Statement. The Company shall prepare and file with the SEC a Registration
Statement, or multiple Registration Statements for the resale by the Investor of the Registrable Securities. The Company in its sole discretion
may choose when to file such Registration Statements; provided, however, that the Company shall not have the ability to request
any Advances until the effectiveness of a Registration Statement. |
| (b) | Maintaining a Registration Statement. The Company shall maintain the effectiveness of any Registration
Statement that has been declared effective at all times during the Commitment Period, provided, however, that if the Company has received
notification pursuant to Section 2.04 that the Investor has completed resales pursuant to the Registration Statement for the full Commitment
Amount, then the Company shall be under no further obligation to maintain the effectiveness of the Registration Statement. Notwithstanding
anything to the contrary contained in this Agreement, the Company shall ensure that, when filed, 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. During the Commitment Period, the Company shall notify the Investor promptly
if (i) the Registration Statement shall cease to be effective under the Securities Act, (ii) the Ordinary Shares shall cease to be authorized
for listing on the Principal Market, (iii) the Ordinary Shares cease to be registered under Section 12(b) or Section 12(g) of the
Exchange Act or (iv) the Company fails to file in a timely manner all reports and other documents required of it as a reporting company
under the Exchange Act. |
| (c) | Filing Procedures. The Company shall (A) permit counsel to the Investor an opportunity to
review and comment upon (i) each Registration Statement at least three (3) Trading Days prior to its filing with the SEC and
(ii) all amendments and supplements to each Registration Statement (including, without limitation, the Prospectus contained therein)
(except for Annual Reports on Form 20-F, Reports of Foreign Private Issuer on Form 6-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 SEC, and (B) shall reasonably consider any comments of the Investor and its counsel on any such Registration
Statement or amendment or supplement thereto or to any Prospectus contained therein. If the
Investor fails to provide comments to the Company within such three (3) Trading Day period, then the Registration Statement, related amendment
or related supplement, as applicable, shall be deemed accepted by the Investor in the form originally delivered by the Company to the
Investor. The Company shall promptly furnish to the Investor, without charge, (i) electronic copies of any correspondence
from the SEC or the staff of the SEC 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 SEC, 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 to the extent such document is available on EDGAR). |
| (d) | Amendments and Other Filings. The Company shall (i) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a Registration Statement and the related prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the Commitment Period, and prepare and file with the SEC such additional Registration
Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related prospectus
to be amended or supplemented by any required prospectus supplement (subject to the terms of this Agreement), and as so supplemented or
amended to be filed pursuant to Rule 424 promulgated under the Securities Act; (iii) provide the Investor copies of all correspondence
from and to the SEC relating to a Registration Statement (provided that the Company may excise any information contained therein which
would constitute material non-public information, and (iv) comply with the provisions of the Securities Act with respect to the Registration
Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement,
including pursuant to this Section 6.01(d) by reason of the Company’s filing a report on Form 20-F or Form 6-K containing financial
statements of the Company or any analogous report under the Exchange Act, the Company shall file such report in a prospectus supplement
filed pursuant to Rule 424 promulgated under the Securities Act to incorporate such filing into the Registration Statement, if applicable,
or shall file such amendments or supplements with the SEC either on the day on which the Exchange Act report is filed which created the
requirement for the Company to amend or supplement the Registration Statement, if feasible, or otherwise promptly thereafter. |
| (e) | Blue-Sky. The Company shall use its commercially reasonable efforts to, if required by Applicable
Laws, (i) register and qualify the Ordinary Shares covered by a Registration Statement under such other securities or “blue sky”
laws of such jurisdictions in the United States as the Investor reasonably requests, (ii) prepare and file in those jurisdictions,
such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Commitment Period, (iii) take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Commitment Period, and (iv) take all other actions reasonably necessary or advisable
to qualify the Ordinary Shares for sale in such jurisdictions; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (w) make any change to its Articles of Incorporation or Bylaws or any other organizational documents
of the Company or any of its Subsidiaries, (x) qualify to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 6.01(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 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 Ordinary Shares 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 threat of any proceeding
for such purpose. |
Section 6.02 Suspension
of Registration Statement.
| (a) | Establishment of a Black Out Period. During the Commitment Period, the Company from time to time
may suspend the use of the Registration Statement by written notice to the Investor in the event that the Company determines in its sole
discretion in good faith that such suspension is necessary to amend or supplement the Registration Statement or Prospectus so that such
Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading
(a “Black Out Period”). |
| (b) | No Sales by Investor During the Black Out Period. During such Black Out Period, the Investor agrees
not to sell any Ordinary Shares of the Company pursuant to such Registration Statement, but may sell shares pursuant to an exemption from
registration, if available, subject to the Investor’s compliance with Applicable Laws. |
| (c) | Limitations on the Black Out Period. The Company shall not impose any Black Out Period that is
longer than twenty (20) calendar days or in a manner that is more restrictive (including, without limitation, as to duration) than the
comparable restrictions that the Company may impose on transfers of the Company’s equity securities by its directors and senior
executive officers. In addition, the Company shall not deliver any Advance Notice during any Black Out Period. If the public announcement
of such material, nonpublic information is made during a Black Out Period, the Black Out Period shall terminate immediately after such
announcement, and the Company shall immediately notify the Investor of the termination of the Black Out Period. |
Section 6.03 Listing of
Ordinary Shares. As of each Advance Date, the Shares to be sold by the Company from time to time hereunder will have been registered
under Section 12(b) of the Exchange Act and approved for listing on the Principal Market, subject to official notice of issuance.
Section 6.04 Opinion of
Counsel. Prior to the date of the delivery by the Company of the first Advance Notice, the Investor shall have received an opinion
letter from counsel to the Company in form and substance reasonably satisfactory to the Investor.
Section 6.05 Exchange
Act Registration. During the Commitment Period, the Company will file in a timely manner all reports and other documents required
of it as a foreign private issuer under the Exchange Act and will not take any action or file any document (whether or not permitted by
Exchange Act or the rules thereunder) to terminate or suspend its reporting and filing obligations under the Exchange Act.
Section 6.06 Transfer
Agent Instructions. During the Commitment Period (or such shorter time as permitted by Section 2.04 of this Agreement) and subject
to Applicable Laws, the Company shall cause (including, if necessary, by causing legal counsel for the Company to deliver an opinion)
the transfer agent for the Ordinary Shares to remove restrictive legends from Ordinary Shares purchased by the Investor pursuant to this
Agreement, provided that counsel for the Company shall have been furnished with such documents as they may require for the purpose of
enabling them to render the opinions or make the statements requested by the transfer agent, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the covenants, obligations or conditions, contained herein.
Section 6.07 Corporate
Existence. The Company will use commercially reasonable efforts to preserve and continue the corporate existence of the Company during
the Commitment Period, which for the avoidance of doubt shall not include any reorganization, acquisition, merger, business combination
or other transaction in which the corporate entity of the Company survives.
Section 6.08 Notice of
Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company will promptly notify the Investor, and
confirm in writing, upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement or
related Prospectus (in each of which cases the information provided to Investor will be kept strictly confidential): (i) except for requests
made in connection with SEC investigations disclosed in the SEC Documents, receipt of any request for additional information by the SEC
or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement or any request for
amendments or supplements to the Registration Statement or related Prospectus; (ii) the issuance by the SEC or any other Federal governmental
authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;
(iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Ordinary
Shares for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose; (iv) the happening of any
event that makes any statement made in the Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related
Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that
in the case of the related Prospectus, it will not contain any untrue statement of a material fact or omit to state any 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, or of the necessity to amend the Registration Statement or supplement a related Prospectus to comply with the Securities
Act or any other law (and the Company will promptly make available to the Investor any such supplement or amendment to the related Prospectus);
(v) the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be required under
Applicable Law; (vi) the Ordinary Shares shall cease to be authorized for listing on the Principal Market; or (vii) the Company fails
to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act. The Company shall
not deliver to the Investor any Advance Notice, and the Company shall not sell any Shares pursuant to any pending Advance Notice (other
than as required pursuant to Section 2.02(d)), during the continuation of any of the foregoing events (each of the events described in
the immediately preceding clauses (i) through (vii), inclusive, a “Material Outside Event”).
Section 6.09 Consolidation.
If an Advance Notice has been delivered to the Investor, then the Company shall not effect any consolidation of the Company with or into,
or a transfer of all or substantially all the assets of the Company to another entity before the transaction contemplated in such Advance
Notice has been closed in accordance with Section 2.02 hereof, and all Shares in connection with such Advance have been received by the
Investor.
Section 6.10 Issuance
of the Company’s Ordinary Shares. The issuance and sale of the Ordinary Shares hereunder shall be made in accordance with the
provisions and requirements of Section 4(a)(2) of the Securities Act and any applicable state securities law.
Section 6.11 Expenses.
The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses
incident to the performance of its obligations hereunder, including but not limited to (i) the preparation, printing and filing of the
Registration Statement and each amendment and supplement thereto, of each prospectus and of each amendment and supplement thereto; (ii)
the preparation, issuance and delivery of any Shares issued pursuant to this Agreement, (iii) all fees and disbursements of the Company’s
counsel, accountants and other advisors (but not, for the avoidance doubt, the fees and disbursements of Investor’s counsel, accountants
and other advisors), (iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including
filing fees in connection therewith, (v) the printing and delivery of copies of any prospectus and any amendments or supplements thereto
reasonably requested by the Investor, (vi) the fees and expenses incurred in connection with the listing or qualification of the Shares
for trading on the Principal Market, or (vii) filing fees of the SEC and the Principal Market.
Section 6.12 Current Report.
The Company shall, not later than 5:30 p.m., New York City time, on the fourth business day after the date of this Agreement, file with
the SEC a Report of Foreign Private Issuer on Form 6-K disclosing the execution of this Agreement by the Company and the Investor
(including any exhibits thereto, the “Current Report”). The Company shall provide the Investor and its legal counsel
a reasonable opportunity to comment on any description of this Agreement contained in a draft of the Current Report, including any exhibit
to be filed related thereto, as applicable, prior to filing the Current Report with the SEC and shall give due consideration to all such
comments. From and after the filing of the Current Report with the SEC, the Company shall have publicly disclosed all material, non-public
information delivered to the Investor (or the Investor’s representatives or agents) by the Company or any of its Subsidiaries, or
any of their respective officers, directors, employees, agents or representatives (if any) in connection with the transactions contemplated
by the Transaction Documents. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide the Investor with any material, non-public information regarding
the Company or any of its Subsidiaries without the express prior written consent of the Investor (which may be granted or withheld in
the Investor’s sole discretion); it being understood that the mere notification of Investor required pursuant to clause (iv) of
Section 6.08 shall not in and of itself be deemed to be material, non-public information. Notwithstanding anything contained in this Agreement
to the contrary, the Company expressly agrees that it shall publicly disclose in the Current Report or otherwise make publicly available
any information communicated to the Investor by or, to the knowledge of the Company, on behalf of the Company in connection with the transactions
contemplated herein, which, following the date hereof would, if not so disclosed, constitute material, non-public information regarding
the Company or its Subsidiaries. The Company understands and confirms that the Investor will rely on the foregoing representations in
effecting resales of Shares under a Registration Statement. In addition, effective upon the filing of the Current Report, the Company
acknowledges and agrees that any and all confidentiality or similar obligations with respect to the transactions contemplated by the Transaction
Documents under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers,
directors, affiliates, employees or agents, on the one hand, and Investor or any of its respective officers, directors, affiliates, employees
or agents, on the other hand, shall terminate.
Section 6.13 Advance Notice
Limitation. The Company shall not deliver an Advance Notice if a shareholder meeting or corporate action date, or the record date
for any shareholder meeting or any corporate action, would fall during the period beginning two Trading Days prior to the date of delivery
of such Advance Notice and ending two Trading Days following the Closing of such Advance.
Section 6.14 Use of Proceeds.
The proceeds from the sale of the Shares by the Company to Investor shall be used by the Company for working capital and other general
corporate purposes.
Section 6.15 Compliance
with Laws. The Company shall comply in all material respects with all Applicable Laws.
Section 6.16 Market Activities.
Neither the Company, nor any Subsidiary, nor any of their respective officers, directors or controlling persons will, directly or indirectly,
(i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute or result,
in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Ordinary Shares or
(ii) sell, bid for, or purchase Ordinary Shares in violation of Regulation M, or pay anyone any compensation for soliciting purchases
of the Shares.
Section 6.17 Trading Information.
Upon the Company’s request, the Investor agrees to provide the Company with trading reports setting forth the number and average
sales prices of Ordinary Shares sold by the Investor during the prior trading week.
Section 6.18 Selling Restrictions.
(i) Except as expressly set forth below, the Investor covenants that from and after the date hereof through and including the Trading
Day next following the expiration or termination of this Agreement as provided in Section 10.01 (the “Restricted Period”),
none of the Investor any of its officers, or any entity managed or controlled by the Investor (collectively, the “Restricted
Persons” and each of the foregoing is referred to herein as a “Restricted Person”) shall, directly or indirectly,
engage in any “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Ordinary Shares,
either for its own principal account or for the principal 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 Shares; or (2) selling a number of Ordinary Shares equal to the number of Advance Shares that such Restricted
Person is unconditionally obligated to purchase under a pending Advance Notice but has not yet received from the Company or the transfer
agent pursuant to this Agreement.
Section 6.19 Assignment.
This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns.
No Party shall have any power or any right to assign or transfer, in whole or in part, this Agreement, or any of its rights or any of
its obligations hereunder, including, without limitation, any right to pursue any claim for damages pursuant to this Agreement or the
transactions contemplated herein, or to pursue any claim for any breach or default of this Agreement, or any right arising from the purported
assignor’s due performance of its obligations hereunder, without the prior written consent of the other Party and any such purported
assignment in contravention of the provisions herein shall be null and void and of no force or effect. Without the consent of the Investor,
the Company shall not have the right to assign or transfer any of its rights, or provide any third party the right to bind or obligate
the Company, to deliver Advance Notices or effect Advances hereunder.
Article VII.
Conditions for Delivery of Advance Notice
Section 7.01 Conditions
Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance Notice and the
obligations of the Investor hereunder with respect to an Advance are subject to the satisfaction or waiver, on each Advance Notice Date
(a “Condition Satisfaction Date”), of each of the following conditions:
| (a) | Accuracy of the Company’s Representations and Warranties. The representations and warranties
of the Company in this Agreement shall be true and correct in all material respects as of the Advance Notice Date (other than representations
and warranties which address matters only as of a certain date, which shall be true and correct as written as of such certain date. |
| (b) | Issuance of Commitment Shares. The Company shall have issued the Commitment Shares to an account
designated by the Investor, in accordance with Section 12.04, all of which Commitment Shares shall be fully earned and non-refundable,
regardless of whether any Advance Notices are made or settled hereunder or any subsequent termination of this Agreement. |
| (c) | Registration of the Ordinary Shares with the SEC. There is an effective Registration Statement
pursuant to which the Investor is permitted to utilize the prospectus thereunder to resell all of the Ordinary Shares issuable pursuant
to such Advance Notice. The Company shall have filed with the SEC in a timely manner all reports, notices and other documents required
under the Exchange Act and applicable SEC regulations during the twelve-month period immediately preceding the applicable Condition Satisfaction
Date. |
| (d) | Authority. The Company shall have obtained all permits and qualifications required by any applicable
state for the offer and sale of all the Ordinary Shares issuable pursuant to such Advance Notice, or shall have the availability of exemptions
therefrom. The sale and issuance of such Ordinary Shares shall be legally permitted by all laws and regulations to which the Company is
subject. |
| (e) | No Material Outside Event. No Material Outside Event shall have occurred and be continuing. |
| (f) | Board. The board of directors of the Company has approved the transactions contemplated by the
Transaction Documents; said approval has not been amended, rescinded or modified and remains in full force and effect as of the date hereof,
and a true, correct and complete copy of such resolutions duly adopted by the board of directors of the Company shall have been provided
to the Investor. |
| (g) | Performance by the Company. The Company shall have performed, satisfied and complied in all material
respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company
at or prior the applicable Condition Satisfaction Date. |
| (h) | No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall
have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or
directly, materially and adversely affects any of the transactions contemplated by this Agreement. |
| (i) | No Suspension of Trading in or Delisting of Ordinary Shares. Trading in the Ordinary Shares shall
not have been suspended by the SEC, the Principal Market or FINRA, the Company shall not have received any final and non-appealable notice
that the listing or quotation of the Ordinary Shares on the Principal Market shall be terminated on a date certain (unless, prior to such
date certain, the Ordinary Shares is listed or quoted on any subsequent Principal Market), nor shall there have been imposed any suspension
of, or restriction on, accepting additional deposits of the Ordinary Shares, electronic trading or book-entry services by DTC with respect
to the Ordinary Shares 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 Ordinary Shares, electronic trading or book-entry services by DTC with respect
to the Ordinary Shares 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). |
| (j) | Authorized. There shall be a sufficient number of authorized but unissued and otherwise unreserved
Ordinary Shares for the issuance of all of the Shares issuable pursuant to such Advance Notice. |
| (k) | Executed Advance Notice. The representations contained in the applicable Advance Notice shall be
true and correct in all material respects as of the applicable Condition Satisfaction Date. |
| (l) | Consecutive Advance Notices. Except with respect to the first Advance Notice, the Company shall
have delivered all Shares relating to all prior Advances. |
Article VIII. Non Exclusive Agreement
Notwithstanding anything contained
herein, this Agreement and the rights awarded to the Investor hereunder are non-exclusive, and the Company may, at any time throughout
the term of this Agreement and thereafter, issue and allot, or undertake to issue and allot, any shares and/or securities and/or convertible
notes, bonds, debentures, options to acquire shares or other securities and/or other facilities which may be converted into or replaced
by Ordinary Shares or other securities of the Company, and to extend, renew and/or recycle any bonds and/or debentures, and/or grant any
rights with respect to its existing and/or future share capital.
Article IX. Choice of Law/Jurisdiction
This Agreement, and any and
all claims, proceedings or causes of action relating to this Agreement or arising from this Agreement or the transactions contemplated
herein, including, without limitation, tort claims, statutory claims and contract claims, shall be interpreted, construed, governed and
enforced under and solely in accordance with the substantive and procedural laws of the State of New York, in each case as in effect from
time to time and as the same may be amended from time to time, and as applied to agreements performed wholly within the State of New York.
The Parties further agree that any action between them shall be heard in New York County, New York, and expressly consent to the jurisdiction
and venue of the Supreme Court of New York, sitting in New York County, New York and the United States District Court of the Southern
District of New York, sitting in New York, New York, for the adjudication of any civil action asserted pursuant to this Agreement.
EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN, THE PERFORMANCE THEREOF OR THE FINANCINGS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY 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 PARAGRAPH.
Article X. Termination
Section 10.01 Termination.
| (a) | Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest
of (i) the first day of the month following the thirty-six (36) month anniversary of the Effective Date or (ii) the date on which
the Investor shall have made payment of Advances pursuant to this Agreement for Ordinary Shares equal to the Commitment Amount. |
| (b) | The Company may terminate this Agreement effective upon five Trading Days’ prior written notice
to the Investor; provided that (i) there are no outstanding Advance Notices, the Ordinary Shares under which have yet to be issued, and
(ii) the Company has paid all amounts owed to the Investor pursuant to this Agreement. 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. |
| (c) | Nothing in this Section 10.01 shall be deemed to release the Company or the Investor from any liability
for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other
party of its obligations under this Agreement. The indemnification provisions contained in Article V shall survive termination hereunder. |
Article XI. Notices
Other than with respect to
Advance Notices, which must be in writing and will be deemed delivered on the day set forth in Section 2.01(b), any notices, consents,
waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed
to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by e-mail if sent on a Trading Day, or,
if not sent on a Trading Day, on the immediately following Trading Day; (iii) 5 days after being sent by U.S. certified mail, return receipt
requested, (iv) 1 day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party
to receive the same. The addresses for such communications (except for Advance Notices which shall be delivered in accordance with Exhibit
A hereof) shall be:
If to the Company, to: |
|
SciSparc Ltd. |
|
|
20 Raul Wallenberg Street, Tower A |
|
|
Tel Aviv 697196 Israel |
|
|
Attention: |
Oz Adler |
|
|
Telephone: |
(+972) (3) 717-5777 |
|
|
Email: |
oz@scisparc.com |
With a copy to (which shall not |
|
Meitar | Law Offices |
constitute notice or delivery of |
|
16 Abba Hillel Road |
process) to: |
|
Ramat-Gan 5250608 Israel |
|
|
Telephone: |
+972-3-6103766 |
|
|
Attention: |
Dr. Shachar Hadar, Adv. |
|
|
E-mail: |
shacharh@meitar.com |
|
|
Sullivan & Worcester LLP |
|
|
1633 Broadway, 32nd Floor |
|
|
New York, New York |
|
|
Attention: |
Oded Har-Even, Esq |
|
|
Telephone: |
212-660-5002 |
|
|
Email: |
ohareven@sullivanlaw.com |
If to the Investor(s): |
|
YA II PN, Ltd. |
|
|
1012 Springfield Avenue |
|
|
Mountainside, NJ 07092 |
|
|
Attention: |
Mark Angelo |
|
|
|
Portfolio Manager |
|
|
Telephone: |
(201) 985-8300 |
|
|
Email: |
mangelo@yorkvilleadvisors.com |
With a Copy (which shall not |
|
David Fine, Esq. |
constitute notice or delivery of |
|
1012 Springfield Avenue |
process) to: |
|
Mountainside, NJ 07092 |
|
|
Telephone: |
(201) 985-8300 |
|
|
Email: |
legal@yorkvilleadvisors.com |
or at such other address and/or e-mail and/or
to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Trading
Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver
or other communication, (ii) electronically generated by the sender’s email service provider containing the time, date, recipient
email address or (iii) provided by a nationally recognized overnight delivery service shall be rebuttable evidence of personal service
in accordance with clause (i), (ii) or (iii) above, respectively.
Article XII. Miscellaneous
Section 12.01 Counterparts.
This Agreement may be executed in identical counterparts, both 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. Facsimile or other electronically scanned and delivered
signatures (including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the
Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com), including by e-mail attachment, shall be
deemed to have been duly and validly delivered and be valid and effective for all purposes of this Agreement.
Section 12.02 Entire Agreement;
Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their respective
affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains the entire understanding
of the parties with respect to the matters covered herein and, except as specifically set forth herein, neither the Company nor the Investor
makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived
or amended other than by an instrument in writing signed by the parties to this Agreement.
Section 12.03 Reporting
Entity for the Ordinary Shares. The reporting entity relied upon for the determination of the trading price or trading volume of the
Ordinary Shares on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto. The written
mutual consent of the Investor and the Company shall be required to employ any other reporting entity.
Section 12.04 Commitment
and Structuring Fee. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants,
appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby, except that the
Company has paid YA Global II SPV, LLC, a subsidiary of the Investor, a structuring fee in the amount of $10,000 and, and the Company
shall pay a commitment fee in an amount equal to 1.00% of the Commitment Amount (the “Commitment Fee”) by the issuance
to the Investor on the date hereof of such number of Ordinary Shares that is equal to the Commitment Fee divided by the daily VWAP of
the Ordinary Shares during the Trading Day immediately prior to the date hereof (collectively, the “Commitment Shares”).
Section 12.05 Brokerage.
Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker who will
demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other hand, agree
to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage commissions or
finder’s fees on account of services purported to have been rendered on behalf of the indemnifying party in connection with this
Agreement or the transactions contemplated hereby.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF,
the parties hereto have caused this Standby Equity Purchase Agreement to be executed by the undersigned, thereunto duly authorized, as
of the date first set forth above.
|
By: |
/s/ Oz Adler |
|
Name: |
Oz Adler |
|
Title: |
CEO |
|
By: |
/s/ Amitay Weiss |
|
Name: |
Amitay Weiss |
|
Title: |
Chairman of the Board |
|
By: |
Yorkville Advisors Global, LP |
|
Its: |
Investment Manager |
|
By: |
Yorkville Advisors Global II, LLC |
|
Its: |
General Partner |
|
By: |
/s/ Matt Beckman |
|
Name: |
Matt Beckman |
|
Title: |
Member |
EXHIBIT A
ADVANCE NOTICE
SCISPARC LTD.
Dated: ______________ |
Advance Notice Number: ____ |
The
undersigned, _______________________, hereby certifies, with respect to the sale of Ordinary Shares of
SCISPARC LTD. (the “Company”) issuable in connection with this Advance Notice, delivered pursuant to that certain Standby
Equity Purchase Agreement, dated as of [____________] (the “Agreement”), as follows (with capitalized terms used herein
without definition having the same meanings as given to them in the Agreement):
1. The
undersigned is the duly elected ______________ of the Company.
2. There
are no fundamental changes to the information set forth in the Registration Statement which would require the Company to file a post-effective
amendment to the Registration Statement.
3.The Company has performed
in all material respects all covenants and agreements to be performed by the Company contained in this Agreement on or prior to the Advance
Notice Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.
4. The
amount of the Advance the Company is requesting is _____________________.
5. The
Minimum Acceptable Price with respect to this Advance Notice is____________ (if left blank then no Minimum Acceptable Price will be applicable
to this Advance).
6. The
number of Ordinary Shares of the Company outstanding as of the date hereof is ___________.
The undersigned has executed
this Advance Notice as of the date first set forth above.
EXHIBIT B
FORM OF SETTLEMENT DOCUMENT
VIA EMAIL
SCISPARC LTD.
Attn:
Email:
|
Below please find the settlement information with respect to the Advance Notice Date of: |
|
1. |
Number of Ordinary Shares requested in the Advance Notice |
|
2. |
Minimum Acceptable Price for this Advance (if any) |
|
3. |
Number of Excluded Days (if any) |
|
4. |
Adjusted Advance Amount (if applicable) |
|
5. |
Market Price |
|
6. |
Purchase Price (Market Price x 97%) per share |
|
7. |
Number of Advance Shares due to the Investor |
|
8. |
Total Purchase Price due to Company (row 6 x row 7) |
|
If there were any Excluded
Days then add the following
9. |
Number of Additional Shares to be issued to the Investor |
|
10. |
Additional amount to be paid to the Company by the Investor (Additional Shares in row 9 x Minimum Acceptable Price x 97%) |
|
11. |
Total Amount to be paid to the Company (Purchase Price in row 8 + additional amount in row 10) |
|
12. |
Total Advance Shares to be issued to the Investor (Advance Shares due to the Investor in row 7 + Additional Shares in row 9) |
|
Please issue the number of Advance
Shares due to the Investor to the account of the Investor as follows:
Investor’s
DTC participant #:
ACCOUNT NAME:
ACCOUNT NUMBER:
ADDRESS:
CITY:
COUNTRY:
Contact person:
Number and/or email:
|
Sincerely, |
|
|
|
YA II PN, LTD. |
Agreed and approved By SCISPARC LTD.:
EXHIBIT C
FORM OF PROMISSORY NOTE
eXHIBIT
d
ACCREDITED INVESTOR QUESTIONNAIRE
The information contained
herein is being furnished to the SciSparc Ltd. (or the “Company”) in order for the Company to determine whether the
undersigned’s purchase of the Company’s ordinary shares (the “Securities”) may be accepted pursuant to
Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Regulation D promulgated thereunder
(“Regulation D”). The undersigned understands that (i) the Company will rely upon the following information for purposes
of complying with Federal and applicable state securities laws, (ii) the Securities will not be registered under the Securities Act in
reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Regulation D, and (iii) this
questionnaire is not an offer to sell nor the solicitation of an offer to buy any securities, or any other securities, to the undersigned.
The following representations
and information are furnished herewith:
1. Qualification
as an Accredited Investor. Please check the categories applicable to you indicating the basis upon which you qualify as an Accredited
Investor for purposes of the Securities Act and Regulation D thereunder.
|
☐ |
Individual
with Net Worth In Excess of $1.0 Million. A natural person (not an entity) whose net worth, or joint net worth with his or her
spouse, at the time of purchase exceeds $1,000,000. (Explanation: In calculating your net worth, you must exclude the value of your
primary residence. This means you must exclude both the equity in your primary residence and any mortgage or other debt secured by
your primary residence up to the fair market value of your primary residence; provided, however, that any indebtedness secured by
your primary residence that (i) you have incurred in the 60 day period prior to the date of your subscription to the Company or (ii)
is in excess of the fair market value of your primary residence should be considered a liability and deducted from your aggregate
net worth. In calculating your net worth, you may include your equity in personal property and real estate (excluding your primary
residence), cash, short-term investments, stock and securities. Your inclusion of equity in personal property and real estate (excluding
your primary residence) should be based on the fair market value of such property less debt secured by such property.) |
|
|
|
|
☐ |
Individual with a $200,000
Individual Annual Income. A natural person (not an entity) who had an individual income of more than $200,000 in each of the
preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year. |
|
|
|
|
☐ |
Individual with a $300,000
Joint Annual Income. A natural person (not an entity) who had joint income with his or her spouse in excess of $300,000 in each
of the preceding two calendar years, and has a reasonable expectation of reaching the same income level in the current year. |
|
☐ |
Corporations or Partnerships.
A corporation, partnership, or similar entity that has in excess of $5 million of assets and was not formed for the specific
purpose of acquiring Securities in the Company. |
|
|
|
|
☐ |
Revocable Trust. A
trust that is revocable by its grantors and each of whose grantors is an accredited investor. (If this category is checked,
please also check the additional category or categories under which the grantor qualifies as an accredited investor.) |
|
|
|
|
☐ |
Irrevocable Trust. A
trust (other than an ERISA plan) that (i) is not revocable by its grantors, (ii) has in excess of $5 million of assets, (iii) was
not formed for the specific purpose of acquiring Securities, and (iv) is directed by a person who has such knowledge and experience
in financial and business matters that such person is capable of evaluating the merits and risks of an investment in the Company. |
|
|
|
|
☐ |
Government Benefit Plan.
A plan established and maintained by a state, municipality, or any agency of a state or municipality, for the benefit of its
employees, with total assets in excess of $5 million. |
|
|
|
|
☐ |
Non-Profit Entity. An
organization described in Section 501(c)(3) of the Internal Revenue Code, as amended, with total assets in excess of $5 million (including
endowment, annuity and life income funds), as shown by the organization’s most recent audited financial statements. |
|
☐ |
Other Institutional Investor (check one). |
|
☐ |
A bank, as defined in Section 3(a)(2) of the Securities Act (whether acting for its own account or in a fiduciary capacity); |
|
☐ |
A savings and loan association or similar institution, as defined in Section 3(a)(5)(A) of the Securities Act (whether acting for its own account or in a fiduciary capacity); |
|
☐ |
A broker-dealer registered under the Securities Exchange Act of 1934, as amended; |
|
☐ |
An insurance company, as defined in section 2(a)(13) of the Securities Act; |
|
☐ |
An investment company registered under the Investment Company Act of 1940, as amended; |
|
☐ |
A “business development company,” as defined in Section 2(a)(48) of the Investment Company Act; |
|
☐ |
A small business investment company licensed under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended; or |
|
☐ |
A “private business development company” as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended. |
|
☐ |
Executive Officer or Director. A natural person who is an executive officer, director or managing member of the Company. |
|
|
|
|
☐ |
Entity Owned Entirely By Accredited Investors.
A corporation, partnership, private investment company or similar entity each of whose equity owners is an accredited investor.
(If this category is checked, please also check
the additional category or categories under which each equity owner qualifies as an accredited investor.) |
|
|
|
|
☐ |
I do not qualify for any of the above. |
2. Representations and Warranties By Limited Liability Companies, Corporations, Partnerships, Trusts and Estates
If the investor is a corporation,
partnership, limited liability company or trust, the investor and each person signing on behalf of investor certifies that the following
responses are accurate and complete:
|
|
Was the undersigned organized or reorganized for the purpose of acquiring interests in the Company? |
|
|
|
|
|
|
Yes ☐ |
No ☐ |
|
|
|
|
|
Is the signatory duly authorized to execute the Subscription Documents? |
|
|
|
|
|
|
Yes ☐ |
No ☐ |
To the best of my information and belief, the
above information supplied by me is true and correct in all respects.
[Signature
page follows]
Date:______________, 2024 |
|
|
|
|
|
SIGNATURE FOR INDIVIDUAL: |
|
SIGNATURE FOR PARTNERSHIP,
CORPORATION, TRUST OR
OTHER ENTITY: |
|
|
|
(Signature) |
|
(Print Name) |
|
|
|
|
|
|
(Print Name) |
|
(Signature of Authorized Signatory) |
|
|
|
|
|
|
(Signature of any joint tenant or co-holder of any security issued by the Company) |
|
(Name of Authorized Signatory) |
|
|
|
|
|
|
(Print Name) |
|
(Title) |
[Signature Page to Investor Questionnaire]
ANNEX I TO THE
STANDBY EQUITY PURCHASE AGREEMENT
CONDITIONS PRECEDENT TO THE INVESTOR’S
OBLIGATION TO FUND A PRE-PAID ADVANCE
Capitalized terms used in this Addendum and
not otherwise defined shall have the meanings ascribed to them in the Standby Equity Purchase Agreement
The obligation of the Investor to advance to the
Company each Pre-Paid Advance hereunder at the Pre-Advance Closing is subject to the satisfaction, as of the date of each Pre-Advance
Closing, of each of the following conditions, provided that these conditions are for the Investor’s sole benefit and may be waived
by the Investor at any time in its sole discretion by providing the Company with prior written notice thereof:
(a) The
Company shall have provided a written request for such Pre-Paid Advance which request (i) in respect of the Pre-Effective Advances, shall
have been delivered to the Investor prior to the date that is the earlier of (y) the effective date of the initial Registration Statement,
and (z) 120 days following the date hereof, and (ii) in respect of the Post-Effective Advances, shall have been delivered to the Investor
prior to the date that is 60 days after the effectiveness of the initial Registration Statement.
(b) The Company shall have duly executed and
delivered to the Investor each of the Transaction Documents to which it is a party and the Company shall have duly executed and
delivered to the Investor the Promissory Note with a principal amount corresponding to the amount of the Pre-Paid Advance (before
any deductions made thereto).
(c) The Investor shall have
received an opinion letter from counsel to the Company in form and substance reasonably satisfactory to the Investor.
(d) The
Investor shall have received a closing statement in a form substantially similar to the form attached hereto, duly executed by an officer
of the Company, setting forth wire transfer instructions of the Company for the payment of the amount of the Pre-Paid Advance, the amount
to be paid by the Investor, which shall be 95% of the full amount of the Pre-Paid Advance, and any other deductions that may be agreed
by the parties.
(e) The board of directors of the Company
has approved the transactions contemplated by the Transaction Documents; said approval has not been amended, rescinded or modified
and remains in full force and effect as of the date hereof, and a true, correct and complete copy of such resolutions duly adopted
by the board of directors of the Company shall have been provided to the Investor.
(f) Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations and
warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of the date of such
Pre-Advance Closing as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions set forth in each Transaction Documents required to be performed, satisfied or
complied with by the Company at or prior to the Pre-Advance Closing date.
(g) Trading
in the Ordinary Shares shall not have been suspended by the SEC, the Principal Market or FINRA, the Company shall not have received any
final and non-appealable notice that the listing or quotation of the Ordinary Shares on the Principal Market shall be terminated on a
date certain (unless, prior to such date certain, the Ordinary Shares is listed or quoted on any subsequent Principal Market).
(h) Since
the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in a Material Adverse Effect,
or an Event of Default.
(i) The
Company shall have delivered to the Investor a compliance certificate executed by the chief executive officer of the Company certifying
that Company has, in all material respects, complied with all of the conditions precedent to the Pre-Advance Closing set forth herein
and which may be relied upon by the Investor as evidence of satisfaction of such conditions without any obligation to independently verify.
(j) The
Company remain eligible to rely on the Home Country Practice exemption.
(k) Solely with respect to Subsequent
Pre-Paid Advances, the initial Registration Statement shall have been declared effective and remain in effect at all times.
Exhibit 99.1
SciSparc Ltd. Announces $20 Million Standby Equity Purchase Agreement
TEL AVIV, Israel, January
24, 2024 (GLOBE NEWSWIRE) – SciSparc Ltd. (Nasdaq: SPRC) (“Company” or “SciSparc”), a specialty clinical-stage
pharmaceutical company focusing on the development of therapies to treat disorders and rare diseases of the central nervous system, today
announced that it has entered into a standby equity purchase agreement (the “SEPA”)
with YA II PN, Ltd. (“YA”), a fund managed by Yorkville Advisors Global, LP. Under the terms of SEPA, YA is committed to purchase
up to $20 million of the Company’s ordinary shares over the next thirty-six-month period, subject to a beneficial ownership cap
of 4.99% of the share capital of the Company. The purchase price of the ordinary shares will be at a 3% discount of the weighted average
price of the Company’s ordinary shares during the three consecutive trading day period commencing on the trading day of the delivery of
an advance notice by the Company.
The
Company will have the right in its sole discretion to sell shares to YA from time to time upon the issuance of an advance notice, which
has no right to require the Company to sell any shares, following the effectiveness of a registration statement with the Securities and
Exchange Commission registering the ordinary shares issuable pursuant to the SEPA and other customary closing conditions.
The
Company intends to use the proceeds from the potential offering of the ordinary shares pursuant to the SEPA for working capital and other
general corporate purposes.
The securities described
herein have not been registered under the Securities Act of 1933, as amended, and may not be sold in the United States absent registration
or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation
of an offer to buy, nor shall there be any sale of these securities 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.
About SciSparc Ltd. (Nasdaq: SPRC):
SciSparc Ltd. is a specialty
clinical-stage pharmaceutical company led by an experienced team of senior executives and scientists. SciSparc’s focus is on creating
and enhancing a portfolio of technologies and assets based on cannabinoid pharmaceuticals. With this focus, the Company is currently engaged
in the following drug development programs based on THC and/or non-psychoactive CBD: SCI-110 for the treatment of Tourette Syndrome, for
the treatment of Alzheimer’s disease and agitation; SCI-160 for the treatment of pain; and SCI-210 for the treatment of ASD and status
epilepticus. The Company also owns a controlling interest in a subsidiary whose business focuses on the sale of hemp seeds oil-based products
on Amazon Marketplace.
Forward-Looking Statements:
This press release contains
express or implied forward-looking statements pursuant to U.S. Federal securities laws. For example, SciSparc is using forward-looking
statements when it discusses the potential sale of securities pursuant to the SEPA and the proposed use of proceeds from the SEPA. Because
such statements deal with future events and are based on SciSparc’s current expectations, they are subject to various risks and uncertainties
and actual results, performance or achievements of SciSparc could differ materially from those described in or implied by the statements
in this press release. The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties,
including those discussed under the heading “Risk Factors” in SciSparc’s Annual Report on Form 20-F filed with the SEC on May
1, 2023, and in subsequent filings with the U.S. Securities and Exchange Commission. Except as otherwise required by law, SciSparc disclaims
any intention or obligation to update or revise any forward-looking statements, which speak only as of the date they were made, whether
as a result of new information, future events or circumstances or otherwise.
Investor Contact:
IR@scisparc.com
Tel: +972-3-6167055
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