Item 1.01 Entry into a Material Definitive
Agreement.
On
August 4, 2022, Marpai, Inc., a Delaware corporation (the “Company”) entered into a Membership Interest Purchase Agreement
(the “Agreement”) by and among XL America Inc., a Delaware corporation, Seaview Re Holdings Inc., a Delaware corporation (XL
America Inc. and Seaview Re Holdings Inc. are collectively referred to herein as the “Equity Sellers”), and AXA S.A., a French
société anonyme (the “Debt Seller,” and, together with the Equity Sellers, collectively, the “Sellers”).
Pursuant to the terms of the Agreement, the Company agreed to acquire all of the membership interests (the “Units”) of Maestro
Health, LLC (“Maestro Health”), a Delaware limited liability company (the “Acquisition”). The Equity Sellers own
an aggregate of 100% of the issued and outstanding Units of Maestro Health. The Company expects the closing of the Acquisition to occur
within sixty (60) days of the execution of the Agreement.
Maestro
Health is a third-party administrator for employee health and benefits, which offers an end-to-end health plan solution, integrating care
management and cost containment for its customers. The Agreement contains representations and warranties customary for transactions of
this nature negotiated between sophisticated purchasers and sellers acting at arm’s length, certain of which are qualified as to
materiality and knowledge and subject to reasonable exceptions. The closing of the Acquisition is subject to certain customary closing
conditions as contained in the Agreement, including: (i) that the Equity Sellers shall have sold, assigned, transferred, conveyed and
delivered to the Company all of the Equity Sellers’ rights, title, and interests in and to all of the Units; and (ii) the Debt Seller
shall have irrevocably transferred and assigned to the Company all of the Debt Seller’s rights and obligations with respect to receiving
payments under that certain Term Loan Agreement, dated May 11, 2022, by and between the Debt Seller and Maestro Health, in the principal
amount of $59,900,000 (the “AXA Note”).
In
consideration for the Company’s acquisition of the Units, the Company has agreed to pay the Sellers an aggregate purchase price
(the “Purchase Price”) of $19,900,000 determined on the closing date (the “Base Purchase Price”), which shall
be payable on or before April 1, 2024 (the “Payment Date”), and shall accrue interest until such time that is paid, such that
on the Payment Date the Purchase Price, plus all accrued and unpaid interest, shall equal $22,100,000 (for clarity, the Base Purchase
Price shall be adjusted, in each case, pursuant to the terms of the Agreement). The Company agreed to pay the Equity Sellers an amount
of $100 with the balance of the Purchase Price to be paid to the Debt Seller for the repayment of the AXA Note. In no event will the Company
be responsible for any further payments for the repayment of the AXA Note other than the repayment of the Purchase Price as provided in
the Agreement. Following the Payment Date, any unpaid portion of the Purchase Price shall accrue interest at ten percent (10%) per annum,
compounding annually, calculated on the basis of a 365-day year for the actual number of days elapsed (the “Specified Rate”),
and shall be repaid as promptly as practicable to the Debt Seller. In addition, in the event the Company or its subsidiaries receive proceeds
from the sale of any securities in a private placement or public offering of securities (each an “Offering”), then the Company
shall pay to the Debt Seller an amount equal to thirty-five percent (35%) of the net proceeds of the Offering no later than sixty (60)
days after the closing of Offering until such time as the Purchase Price has been paid in full.
Notwithstanding
the foregoing, the Company shall be required to make accumulated annual payments to the Debt Seller, representing the Purchase Price,
as follows: (i) $5,000,000 to be paid by December 31, 2024, (ii) $11,000,000 to be paid by December 31, 2025, and (iii) $9,000,000 to
be paid by December 31, 2026. In addition, the Company shall be obligated to pay the full amount of any remaining unpaid Purchase Price
(inclusive of any accrued interest at the Specified Rate) by no later than year-end 2027, and in no event shall the Company be required
to pay total cash consideration equal to more than the aggregate amount of the Purchase Price (as adjusted pursuant to the terms of the
Agreement).
The
foregoing description of the terms of the Agreement is not intended to be complete and is qualified in its entirety by reference to the
Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.