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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM 8-K
____________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 25, 2024
____________________________
OWLET, INC.
(Exact name of registrant as specified in its charter)

Owlet Logomark (JPG).jpg
____________________________
Delaware001-3951685-1615012
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
3300 North Ashton BoulevardSuite 300
LehiUtah
84043
(Address of principal executive offices)(Zip Code)
(844334-5330
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
____________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Class A Common Stock, $0.0001 par value per share
OWLTNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o



Item 1.01 Entry Into a Material Definitive Agreement.

Investment Agreements

On February 25, 2024, Owlet, Inc. (the “Company”) entered into an Investment Agreement (the “Investment Agreement”) with certain investors listed on Schedule 1 thereto (the “Investors”), pursuant to which the Company will issue and sell to the Investors (i) an aggregate of 9,250 shares (the “Preferred Shares”) of the Company’s Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”) and (ii) warrants (“Warrants”) to purchase an aggregate of 1,799,021 shares of the Company’s Class A Common Stock, par value $0.0001 per share (the “Common Stock”), for an aggregate purchase price of $9.25 million (collectively, the “Private Placement”). The Company anticipates that the Private Placement will close on or about February 28, 2024, subject to customary closing conditions. The Company plans to use the net proceeds for general corporate purposes and to fund its strategic initiatives.

Investors who are purchasing Preferred Shares and Warrants in the Private Placement include (i) an entity affiliated with Eclipse Ventures LLC (“Eclipse”), (ii) entities affiliated with Trilogy Equity Partners, LLC (“Trilogy”), and (iii) John Kim, a member of the Company’s board of directors (the “Board”). Lior Susan, the chairman of the Board, and Marc Stoll, a member of the Board, are affiliated with Eclipse and Amy McCullough, a member of the Board, is affiliated with Trilogy. The Company’s prior material relationships with such parties are described under “Certain Relationships and Related Person Transactions” beginning on page 49 of the Company’s definitive proxy statement filed with the Securities and Exchange Commission on May 12, 2023, which description is incorporated herein by reference.

Series B Preferred Stock

In connection with the closing of the Private Placement, the Company will file the Certificate of Designation of Series B Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware setting forth the terms, rights, obligations and preferences of the Series B Preferred Stock.

Ranking and Dividends

The Series B Preferred Stock will rank, with respect to dividend rights, rights of redemption and rights upon a liquidation event, (i) equal to the Company’s Series A Convertible Preferred Stock par value $0.0001 per share (the “Series A Preferred Stock”), (ii) senior to the Common Stock and all other classes or series of equity securities of the Company established after the closing date of the Private Placement (the “Closing Date”), unless such shares or equity securities expressly provide that they rank in parity with or senior to the Series B Preferred Stock with respect to dividend rights, rights of redemption or rights upon a liquidation event, (iii) on parity with each class or series of equity securities of the Company established after the Closing Date, the terms of which expressly provide that it ranks on parity with the Series B Preferred Stock with respect to dividend rights, rights of redemption and rights upon a liquidation event and (iv) junior to each class or series of equity securities of the Company established after the Closing Date, the terms of which expressly provide that it ranks senior to the Series B Preferred Stock with respect to dividend rights, rights of redemption and rights upon a liquidation event.

The Series B Preferred Stock will have a liquidation preference of $1,000.00 per share (the “Liquidation Preference”). The Company has agreed not to declare, pay or set aside any dividends on shares of Common Stock unless the holders of the Preferred Shares then outstanding first receive, or simultaneously receive, a dividend on each outstanding share of Series B Preferred Stock in an amount at least equal to the product of (i) the dividend payable on each share of Common Stock multiplied by (ii) the number of shares of Common Stock issuable upon conversion of a share of Series B Preferred Stock to Common Stock thereunder, in each case calculated on the record date for determination of holders entitled to receive such dividend.

Conversion and Redemption

The Series B Preferred Stock will be convertible into Common Stock at the option of the holder at any time subsequent to the Closing Date. The number of shares issuable upon conversion will be determined by the number of Preferred Shares so converted multiplied by 129.6596 (the “Conversion Rate”). Cash will be paid in lieu of any fractional shares based on the closing market price of the Common Stock on the conversion date. The Conversion Rate will be subject to adjustment for customary anti-dilution protections, including for stock dividends, splits, and combinations, rights offerings, spin-offs, distributions of cash or other property (to the extent not participating on an as-converted basis) and above market self-tender or exchange offers. At any time from and after the five-year anniversary of the Closing Date, the holders of at least a majority of the then-outstanding Preferred Shares may specify a date and time or the occurrence of an event by vote or written consent that all, and not less than all, outstanding Preferred Shares will automatically be: (i) converted into shares of Common Stock at the Conversion Rate, (ii) subject to certain exceptions and limitations, redeemed for an amount per



share of Series B Preferred Stock equal to the Liquidation Preference plus all accrued or declared but unpaid dividends as of the redemption date and time or (iii) a combination of the foregoing.

Subject to certain exceptions, upon the occurrence of a fundamental change, voluntary or involuntary liquidation, dissolution or winding-up of the Company, the Company will be required to pay an amount per share of Series B Preferred Stock equal to the greater of (i) $1,000.00 per share or (ii) the consideration per share of Series B Preferred Stock as would have been payable had all Preferred Shares been converted to Common Stock immediately prior to the liquidation event, plus, in each case, the aggregate amount of all declared but unpaid dividends thereon to the date of final distribution to the holders of Series B Preferred Stock.

The Certificate of Designation will include certain provisions that prevent Eclipse from converting its Preferred Shares to the extent such action would result in Eclipse beneficially owning in excess of 48.9% of the Company’s outstanding Common Stock (the “Individual Holder Share Cap”), provided that such Individual Holder Share Cap is subject to removal at Eclipse’s sole discretion upon written notice to the Company, provided that any increase or removal of such Individual Holder Share Cap will not be effective before the sixty-first (61st) day after such written notice.

Voting and Consent Rights

Holders of Preferred Shares will be entitled to vote with the holders of shares of Common Stock on an as-converted to common basis at any annual or special meeting of stockholders of the Company, and not as a separate class, except as required by Delaware law. Holders of shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share, are also entitled to vote with the holders of shares of Common Stock on an as-converted to common basis at any annual or special meeting of stockholders of the Company, and not as a separate class, except as required by Delaware law.

Additionally, for so long as any Preferred Shares remain outstanding, the Company will be prohibited, without the consent of the holders of at least a majority of the Preferred Shares, from taking various corporate actions, including:

creating, authorizing or issuing any additional Preferred Shares or shares which rank senior to or on parity with the Preferred Shares;
amending, waiving or repealing the rights, preferences or privileges of the Preferred Shares;
increasing or decreasing the authorized number of Preferred Shares;
exchanging, reclassifying or canceling the Preferred Shares (except as contemplated by the Certificate of Designations);
declaring or paying any dividend on, or making any distribution to, or repurchasing any shares of Common Stock or other securities that rank junior to the Preferred Share, subject to certain exceptions;
incurring any indebtedness other than Permitted Indebtedness (as defined in the Certificate of Designation); and
creating, adopting, amending, terminating or repealing any equity (or equity-linked) compensation or incentive plan or increase the amount or number of equity securities reserved for issuance thereunder if the New York Stock Exchange would require stockholder approval of such action; provided that the Company’s 2021 Incentive Award Plan (as it exists on the Closing Date) (the “2021 Plan”) and any automatic annual increases pursuant to the 2021 Plan shall not require approval.

Restrictions on Transfer

The holders of Series B Preferred Stock are permitted to transfer their Preferred Shares subject to any applicable legends or legal restrictions arising under applicable law, subject to completion of certain procedures.

Warrants

The Warrants will be exercisable for a number of shares of Common Stock equal to (i) in the case of any Investors who purchases Preferred Shares, 150% of the number of shares of Common Stock into which such investor’s Series B Preferred Stock is initially convertible and (ii) in the case of any Investor who purchases Common Stock, 150% of the number of shares of Common Stock purchased by such Investor. In each case, the Warrants have a five-year term and an exercise price that is equal to $7.7125 per share. The Warrants also provide for an exercise on a cash or cashless net exercise basis at any time after the Closing Date and will be automatically exercised on a cashless basis if not exercised prior to the expiration of the five-year term. Upon a fundamental change or other liquidation event, the Warrants will automatically net exercise if not exercised before the consummation of such event.

The Warrant held by Eclipse will include certain provisions that prevent Eclipse from exercising its Warrant to the extent such action would result in Eclipse beneficially owning in excess of the Individual Holder Share Cap, provided that such Individual Holder Share Cap is subject to removal at Eclipse’s sole discretion upon written notice to the Company,



provided that any increase or removal of such Individual Holder Share Cap will not be effective before the sixty-first (61st) day after such written notice.

Registration Rights

As promptly as reasonably practicable after the Closing Date, but in any event within 30 days after the Closing Date, the Company will be required to file a shelf registration statement to register the resale of all the shares of Common Stock issuable upon conversion or exercise of the Preferred Shares or Warrants. The Company will use commercially reasonable efforts to cause the shelf registration statement to become effective within 60 days following the Closing Date, or within 90 days following the Closing Date if the Securities and Exchange Commission notifies the Company that it will review the shelf registration statement.

Shares of Common Stock underlying the Preferred Shares and Warrants held by Eclipse, Trilogy and Mr. Kim will be considered “Registrable Securities” for purposes of that certain Amended and Restated Registration Rights Agreement, dated as of July 15, 2021, by and among the Company and the holders party thereto, a copy of which was filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed July 21, 2021, which is incorporated herein by reference, which will entitle such holders to the demand and piggyback registration rights set forth therein.

Participation Rights

The Investment Agreement provides each Investor that purchases 3,000 Preferred Shares, for so long as such Investor and its affiliates continues to hold or beneficially own at least 3,000 Preferred Shares, with a right to participate as investors in future financing transactions by the Company. The right is limited to financing transactions involving equity securities or securities exercisable or convertible for equity securities of the Company, and will provide such Investor the right to buy up to a number of new securities, on the same terms and conditions offered to other potential investors, necessary for such Investor to maintain its pro rata ownership percentage in the Company (calculated as the fraction equal to (a) the number of outstanding shares of Common Stock plus the number of shares of Common Stock underlying the Investor’s Preferred Shares on an as-converted basis divided by (b) the number of outstanding shares of Common Stock plus the number of shares of Common Stock underlying all outstanding Preferred Shares on an as-converted basis).

The Investment Agreement contains customary representations, warranties, covenants, indemnification obligations of the Company and the Investors, and other obligations of the parties. The representations, warranties and covenants contained in the Investment Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties. The foregoing descriptions of the Certificate of Designation, Form of Warrant, the Investment Agreement, and the transactions contemplated thereby are only summaries and do not purport to be complete, and are qualified in its entirety by reference to the full text of such instruments, copies of which are attached to this Current Report on Form 8-K as Exhibit 3.1, Exhibit 4.1 and Exhibit 10.1, respectively, and incorporated herein by reference.

Amended and Restated Warrant

In connection with the Private Placement, the Company and Eclipse Early Growth Fund I, L.P. entered into an Amended and Restated Warrant (the “A&R Warrant”), which amends and restates that certain Warrant, dated February 17, 2023, by and between the Company and Eclipse Early Growth Fund I, L.P. The A&R Warrant (i) revises the Warrant Exercise Price and Warrant Share Number (each as defined in the A&R Warrant) reflect the Company’s reverse stock split effected on July 7, 2023 and (ii) implements certain provisions that will prevent Eclipse from exercising the A&R Warrant to the extent such action would result in Eclipse beneficially owning in excess of the Individual Holder Share Cap, provided that such Individual Holder Share Cap is subject to removal at Eclipse’s sole discretion upon written notice to the Company, provided that any increase or removal of such Individual Holder Share Cap will not be effective before the sixty-first (61st) day after such written notice. A copy of the A&R Warrant is attached to this Current Report on Form 8-K as Exhibit 4.2 and is incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

On February 26, 2024, the Company issued a press release reporting certain unaudited preliminary financial results for the fourth quarter ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The preliminary unaudited financial results included in Exhibit 99.1 to this Current Report on Form 8-K have been prepared by, and are the responsibility of, management of the Company. The Company’s independent registered public accounting firm has not audited, reviewed, compiled or applied agreed-upon procedures with respect to such preliminary unaudited financial results and has not expressed any opinion or other form of assurance with respect thereto.




The information in this Item 2.02, including the Exhibit 99.1 furnished under Item 9.01, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Furthermore, the information in this Item 2.02, including the Exhibit 99.1 furnished under Item 9.01, shall not be deemed incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The Private Placement was undertaken in reliance upon an exemption from the registration requirements of Section 4(a)(2) of the Securities Act. The securities issued or issuable pursuant to the Investment Agreement may not be re-offered or sold in the United States absent an effective registration statement or an exemption from the registration requirements under applicable federal and state securities laws. Any issuance of Common Stock upon exercise of the Warrants pursuant to a cashless exercise will be made pursuant to an exemption from registration under the Securities Act solely for the holder’s own account. The initial maximum number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock and exercise of the Warrants will be 2,998,369 shares, subject to customary anti-dilution adjustments.

Item 3.03 Material Modification to Rights of Security Holders.

Pursuant to the Investment Agreement, the Company will issue the Preferred Shares as set forth in Item 1.01 above, which is incorporated herein by reference. The powers, designations, preferences, and other rights of the Series B Preferred Stock as are set forth in the Certificate of Designation, a copy of which is filed as Exhibit 3.1 hereto and is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Pursuant to the Investment Agreement, the Company will issue the Preferred Shares as set forth in Items 1.01 and 3.03 above, which are incorporated herein by reference. In connection with the closing of the Private Placement, the Company will file the Certificate of Designation with the Secretary of State of the State of Delaware on the Closing Date setting forth the terms, rights, obligations and preferences of the Series B Preferred Stock. A copy of the Certificate of Designation is filed as Exhibit 3.1 hereto and is incorporated herein by reference.

Item 5.07 Submission of Matters to a Vote of Security Holders.

On February 25, 2024, holders of 22,917 shares of the Series A Preferred Stock, representing a majority of the outstanding shares of Series A Preferred Stock, approved the creation and authorization of the Series B Preferred Stock and the issuance of the Preferred Shares in the Private Placement, as required by the terms of the Company’s Certificate of Designation of Series A Convertible Preferred Stock. Such holders also approved that the Preferred Shares will be permitted indebtedness under the terms of the Company’s Certificate of Designation of Series A Convertible Preferred Stock.

Item 7.01 Regulation FD Disclosure.

On February 26, 2024, the Company issued a press release relating to the Private Placement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 7.01, including Exhibit 99.1 furnished hereunder, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. Furthermore, the information in this Item 7.01, including Exhibit 99.1 furnished hereunder, shall not be deemed incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act.



Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Owlet, Inc.
Date: February 26, 2024By:/s/ Kathryn R. Scolnick
Name:Kathryn R. Scolnick
Title:Chief Financial Officer

Exhibit 3.1
CERTIFICATE OF DESIGNATION OF
SERIES B CONVERTIBLE PREFERRED STOCK OF
OWLET, INC.

Pursuant to Section 151 of the Delaware General Corporation Law (as amended, supplemented or restated from time to time, the “DGCL”), Owlet, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”), in accordance with the provisions of Section 103 of the DGCL, DOES HEREBY CERTIFY THAT:

1.The Second Amended and Restated Certificate of Incorporation of the Company, as heretofore amended (the “Certificate of Incorporation”), authorizes the issuance of 117,883,928 shares of capital stock, consisting of 107,142,857 shares of Class A common stock, par value $0.0001 per share (the “Common Stock”), and 10,741,071 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”);

2.Pursuant to the provisions of the Certificate of Incorporation, the board of directors of the Company (the “Board”) is authorized to fix by resolution or resolutions the designations and the powers, including voting powers, if any, preferences and relative, participating, optional or other special rights, if any, and the qualifications, limitations or restrictions thereof, of any series of Preferred Stock, and to fix the number of shares constituting any such series; and

3.Pursuant to the authority conferred upon the Board by the Certificate of Incorporation, a duly authorized committee of the Board adopted the following resolution designating a new series of Preferred Stock as “Series B Convertible Preferred Stock:”

RESOLVED, that, pursuant to the authority vested in the Board in accordance with the provisions of Article IV of the Certificate of Incorporation and the provisions of Section 151 of the DGCL, a series of Preferred Stock of the Company is hereby authorized, and the number of shares to be included in such series, and the powers (including voting powers), designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations and restrictions of the shares of Preferred Stock included in such series, shall be as follows:

1.Number and Designation. This series of Preferred Stock shall be designated as the Series B Convertible Preferred Stock (the “Series B Preferred Stock”) of the Company, and the authorized number of shares (the “Series B Preferred Shares”) so designated shall initially be 9,250 shares. Each share of Series B Preferred Stock shall have a par value of $0.0001 per share. Capitalized terms used herein without definition shall have the meanings assigned thereto in the preamble above or in Section 9.
2.Ranking. The Series B Preferred Stock shall, with respect to dividend rights, rights of redemption and rights upon a Liquidation Event (as defined below), (i) rank senior to the Common Stock, and to all other classes or series of equity securities of the Company established hereafter, except for any such other class or series of equity securities the terms of which expressly provide that it ranks on parity with or senior to the Series B Preferred Stock



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with respect to dividend rights, rights of redemption or rights upon a Liquidation Event (the         securities described in this clause (i), including the Common Stock, the “Junior Securities”), (ii) rank on parity with the Company’s Series A Convertible Preferred Stock, par value $0.0001 (the “Series A Preferred Stock”) and each class or series of equity securities of the Company established hereafter, the terms of which expressly provide that it ranks on parity with the Series B Preferred Stock with respect to dividend rights, rights of redemption and rights upon a Liquidation Event (the securities described in this clause (ii), the “Parity Securities”) and (iii) rank junior to each class or series of equity securities of the Company established hereafter, the terms of which expressly provide that it ranks senior to the Series B Preferred Stock with respect to dividend rights, rights of redemption and rights upon a Liquidation Event (the securities described in this clause (iii), the “Senior Securities”). The respective definitions of Junior Securities, Parity Securities and Senior Securities shall also include any options, warrants and any other rights exercisable into, exchangeable for or convertible into any Junior Securities, Parity Securities or Senior Securities, as the case may be. The Series B Preferred Shares shall have no stated maturity and will not be subject to any sinking fund.
3.Dividends. The Company shall not declare, pay or set aside any dividends on shares of Common Stock (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in the Certificate of Incorporation, Bylaws or this Certificate of Designation) the holders of the Series B Preferred Shares then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series B Preferred Stock in an amount at least equal to the product of (a) the dividend payable on each share of Common Stock multiplied by (b) the number of shares of Common Stock issuable upon conversion of such Series B Preferred Shares to Common Stock hereunder, in each case calculated on the record date for determination of holders entitled to receive such dividend (without giving effect to any Individual Holder Share Cap). The Company shall not declare, pay or set aside any dividends on shares of Series A Preferred Stock unless (in addition to the obtaining of any consents required elsewhere in the Certificate of Incorporation, Bylaws or this Certificate of Designation) the holders of the Series B Preferred Shares then outstanding shall simultaneously receive at least an equal dividend on an as-converted to Common Stock basis per share of Series B Preferred Stock in an amount at least equal to the dividend paid on each such share of Series A Preferred Stock on an as-converted to Common Stock basis. If a dividend is payable solely in shares of Common Stock, the Series B Conversion Rate shall be adjusted in accordance with Section 7. In addition, any redemption, repurchase or other acquisition of shares of Common Stock by the Company shall be excluded from this Section 3. To the extent a dividend or other distribution would result in a holder of Series B Preferred Shares beneficially owning Common Stock or Total Voting Power above the Individual Holder Share Cap, such holder shall not be entitled to participate in such dividend or distribution to such extent (and shall not be entitled to beneficial ownership of such shares of Common Stock or voting power as a result of such dividend or distribution) and the portion of such dividend or distribution above the Individual Holder Share Cap shall be held in abeyance by the Company for the benefit of such holder until such time or times as all or a portion of such holder’s right thereto would not result in such holder’s beneficial ownership exceeding the Individual Holder Share Cap, at which time or times such holder shall be granted all or a portion of such dividend or distribution (and any dividends or distributions declared or made on such initial dividend or distribution or on any subsequent dividend or distribution held similarly in abeyance) to the same extent as if there had been no such limitation.
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4.Liquidation Preference.
(a)Preferential Payments. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company or a Deemed Liquidation Event (each, a “Liquidation Event”), (x) before any payment or distribution of the Company’s assets (whether capital or surplus) shall be made to or set apart for the holders of any Junior Securities and (y) after the payment of all claims of and liabilities to the Company’s creditors and any liquidation preferences payable on any Senior Securities, each holder of Series B Preferred Shares shall be entitled to receive, and the Company shall pay to each such holder to the extent the Company has assets or proceeds thereof available an amount per share of Series B Preferred Stock equal to the greater of (i) the Series B Liquidation Preference and (ii) the consideration per share of Series B Preferred Stock as would have been payable had all Series B Preferred Shares been converted into Common Stock pursuant to Section 5 (without giving effect to any Individual Holder Share Cap) immediately prior to such Liquidation Event, plus, in each case of clauses (i) and (ii), the aggregate amount of all declared but unpaid dividends thereon to the date of final distribution to the holders of Series B Preferred Stock (such amount, the “Liquidation Amount”). Notwithstanding anything to the contrary in this Certificate of Designation, the calculation of the Liquidation Amount on an as-converted to Common Stock basis shall not give effect to any Individual Holder Share Cap and to the extent it is deemed under applicable law that such Individual Holder Share Cap would reduce the Liquidation Amount payable to such holder of Series B Preferred Shares, the holder of such Series B Preferred Shares subject to such reduction shall instead be entitled to receive the fair market value (as determined by the Board acting in good faith) of such reduced amount in the form of cash and such cash consideration will be deemed to be part of the Liquidation Amount and a cash settlement thereof. After payment in full of the entire Liquidation Amount, such holders shall not be entitled to any further participation in any distribution of assets of the Company. If, upon any Liquidation Event, the Company’s assets, or proceeds thereof, distributable to the holders of Series B Preferred Stock and any Parity Securities are insufficient to pay the full Liquidation Amount in respect of all outstanding Series B Preferred Shares and Parity Securities, then such assets, or the proceeds thereof, shall be distributed among the holders of Series B Preferred Stock and any Parity Securities ratably in proportion to the respective amounts that would be payable on all outstanding Series B Preferred Shares and Parity Securities if all such amounts were paid in full.
(b)Payments to Holders of Junior Securities. After the Liquidation Amount has been paid on all outstanding Series B Preferred Shares and any Parity Securities, as provided in this Section 4, the holders of Junior Securities shall, subject to the terms and conditions (if any) applicable to the Junior Securities, be entitled to receive any and all assets remaining to be paid or distributed, and holders of Series B Preferred Stock shall not be entitled to share therein.
(c)Fundamental Change. A Fundamental Change shall be deemed to be a Liquidation Event (a “Deemed Liquidation Event”) unless the holders of at least a majority of the outstanding Series B Preferred Shares elect otherwise by written notice to the Company prior to the effective date of any such event. In the event of a Deemed Liquidation Event, the Company shall cause the holders of the Series B Preferred Shares to receive the Liquidation Amount at the closing of such transaction or otherwise at the same time as the applicable consideration is to be received by the holders of Common Stock in the manner described in Section 4(a).
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(d)Whenever the distribution provided for in this Section 4 shall be payable in securities or property other than cash, the value of such distribution shall be the fair market value (as determined by the Board acting in good faith) of such securities or property. If the holders of Common Stock are given an opportunity to make an election with respect to the type or amount of consideration to receive in a Liquidation Event, then the holders of the Series B Preferred Shares will receive the same notice, time and opportunity to make an election as the holders of the Common Stock.
5.Optional Conversion.
(a)Subject to the provisions of this Section 5, each holder of Series B Preferred Shares has the right, at any time and from time to time from the Series B Original Issue Date, at such holder’s option, to convert all or any portion of its Series B Preferred Shares into such number of fully paid and non-assessable shares of Common Stock as is determined by the number of Series B Preferred Shares so converted multiplied by the Series B Conversion Rate.
(b)Optional Conversion Procedures.
(i)In order for a holder of Series B Preferred Stock to voluntarily convert Series B Preferred Shares into shares of Common Stock, such holder shall:
(A)provide written notice to the Company at its principal office that such holder elects to convert all or any number of such holder’s Series B Preferred Shares (such notice shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Common Stock to be issued); and
(B)only if such holder’s shares are certificated, surrender the certificate or certificates for such Series B Preferred Shares (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Company to indemnify the Company against any claim that may be made against the Company on account of the alleged loss, theft or destruction of such certificate), at the principal office of the Company; provided, that, if required by the Company, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by the registered holder or his, her or its attorney duly authorized in writing.
(ii)The close of business on the date of receipt by the Company of such notice and, if applicable, certificates (or lost certificate affidavit and agreement) shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the specified shares shall be deemed to be outstanding of record as of such date.
(iii)The Company shall, as soon as practicable after the Conversion Time, cause (1) the issuance and delivery to such holder of Series B Preferred Shares, or to such holder’s nominees, documentation of the book entry for the number of whole
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shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and documentation of the book entry for the number (if any) of the Series B Preferred Shares represented by the surrendered certificate that were not converted into Common Stock and (2) pay in cash such amount as provided in Section 5(d) in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion.
(c)All shares of Common Stock delivered upon conversion of the Series B Preferred Stock will upon delivery be duly and validly issued and fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights.
(d)In connection with the conversion of any Series B Preferred Shares, no fractional shares of Common Stock shall be issued after aggregating all of the Series B Preferred Shares of each series held by such holder to be converted. In lieu thereof the Company shall pay a cash adjustment (rounded to the nearest cent) in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Current Market Price on the day on which such Series B Preferred Shares are deemed to have been converted.
(e)From the Conversion Time, in lieu of dividends on any such converted Series B Preferred Shares pursuant to Section 3, such converted Series B Preferred Shares shall participate equally and ratably with the holders of Common Stock in all dividends paid on Common Stock as if such Series B Preferred Shares had been converted to shares of Common Stock at the Conversion Time, as the case may be; provided, however, for the avoidance of doubt, dividends shall not be paid with respect to such Series B Preferred Shares as if such Series B Preferred Shares had been converted to shares of Common Stock to the extent such holder is instead entitled to receive such dividends pursuant to Section 3. Any accrued or declared but unpaid dividends on the Series B Preferred Shares at the Conversion Time shall be paid with respect to the converted Series B Preferred Shares at the earlier of: (i) the payment of such dividends with respect to other Series B Preferred Shares entitled to receive such dividend or (ii) the payment of such dividends with respect to the Common Stock.
(f)Notwithstanding the foregoing or anything else in this Certificate of Designation to the contrary but subject to the last sentence of this Section 5(f), no shares of Common Stock will be issued or delivered upon conversion of any Series B Preferred Stock of any holder, and no Series B Preferred Stock of any holder will be convertible, in each case to the extent, and only to the extent, that such issuance, delivery, conversion or convertibility would result in such holder becoming the beneficial owner of shares of Common Stock or Total Voting Power, in each case, in excess of such holder’s Individual Holder Share Cap (the “Conversion Restriction”). Any purported delivery of shares of Common Stock upon conversion of the Series B Preferred Stock will be void and have no effect to the extent, but only to the extent, that such delivery would result in any holder becoming the beneficial owner of shares of Common Stock outstanding at such time in excess of such holder’s Individual Holder Share Cap. For the avoidance of doubt, a holder may effect a conversion of its shares of Series B Preferred Stock pursuant to this Section 5 up to such holder’s Individual Holder Share Cap, in each case subject to the other applicable requirements of this Certificate of Designation. If any consideration otherwise due upon the conversion of any Series B Preferred Stock pursuant to this Section 5 is not delivered as a result of the Conversion Restriction, then the Company’s obligation to deliver
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such consideration will not be extinguished, and the Company will deliver such consideration as soon as reasonably practicable after such delivery will not contravene the Conversion Restriction, including by a holder of Series B Preferred Stock providing written evidence that its beneficial ownership and aggregate amount of voting power is such that additional shares of Common Stock issuable upon conversion of the Series B Preferred Stock may be delivered without contravening the Conversion Restriction. The satisfaction by a holder of Series B Preferred Stock of the requirements set for in Section 5(b)(i) to convert such Series B Preferred Stock will be deemed to be a representation by such holder to the Company that the settlement of such conversion in full and without regard to this Section 5(f) will not contravene the Conversion Restriction. Notwithstanding anything to the contrary in this Certificate of Designation, (i) to the extent this Section 5(f) is deemed to conflict with Section 4(a), the provisions of Section 4(a) shall control and (ii) this Section 5(f) shall not restrict the number of shares of Common Stock which the holder of Series B Preferred Stock may receive or beneficially own in order to determine the amount of securities or other consideration that the Holder may receive in the event of a Mandatory Redemption, Mandatory Conversion or Mandatory Exit Event as contemplated in Section 6 of this Certificate of Designation.
6.Mandatory Conversion or Redemption by Holders of Series B Preferred Shares.
(a)At any time from and after the five-year anniversary of the Series B Original Issue Date, the holders of at least a majority of the then-outstanding Series B Preferred Shares may specify a date and time or the occurrence of an event by vote or written consent (in any case, subject to Section 6(b)) that all, and not less than all, outstanding Series B Preferred Shares shall automatically be: (i) converted into shares of Common Stock at the Series B Conversion Rate in effect at the date and time of such conversion (with such date and time so specified deemed to be the Conversion Time) (the “Mandatory Conversion”), (ii) subject to compliance with the agreements governing the then-outstanding Indebtedness of the Company and to the extent permitted by applicable law, redeemed by the Company (the “Mandatory Redemption”) for an amount per share equal to the Series B Original Issue Price plus all accrued or declared but unpaid dividends (the “Series B Redemption Price”) as of a specified redemption date and time (the “Redemption Time”); or (iii) any combination thereof (collectively, the “Mandatory Exit Event”); provided that in the case of a Mandatory Redemption, the holders of the Series B Preferred Shares being called for redemption shall have the right as set forth herein to convert all or any portion of such Series B Preferred Shares to Common Stock pursuant to Section 5 before such redemption. For the avoidance of doubt, a holder of Series B Preferred Shares cannot require the redemption of their Series B Preferred Shares unless subject to a Mandatory Redemption as set forth above.
(b)The Company shall send written notice of any Mandatory Exit Event (including the applicable Conversion Time or Redemption Time) to all holders of the Series B Preferred Shares at least 10 Business Days prior to the applicable Conversion Time or Redemption Time. Any such holder that complies with the requirements of Section 5 to convert their Series B Preferred Shares prior to the applicable Conversion Time or Redemption Time will not have their Series B Preferred Shares become subject to the Mandatory Exit Event.
(c)In the event any Series B Preferred Shares are required to be redeemed by the Company hereunder, then as a condition to receiving the applicable Series B Redemption
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Price, each holder of Series B Preferred Shares being redeemed shall, if a holder of shares in certificated form, surrender the certificate or certificates representing such shares (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Company to indemnify the Company against any claim that may be made against the Company on account of the alleged loss, theft or destruction of such certificate) to the Company, and thereupon the Series B Redemption Price for such shares shall be payable to the holder of the applicable redeemed Series B Preferred Shares.
(d)Mandatory Conversion Procedures.
(i)Each holder of Series B Preferred Shares subject to Mandatory Conversion which are in certificated form shall surrender such holder’s certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Company to indemnify the Company against any claim that may be made against the Company on account of the alleged loss, theft or destruction of such certificate) to the Company. Each holder shall state such holder’s name or the names of the nominees in which such holder wishes the shares of Common Stock to be issued. If so required by the Company, any certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Company, duly executed by the registered holder or by such holder’s attorney duly authorized in writing.
(ii)As soon as practicable after the Conversion Time and, if applicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for Series B Preferred Stock to the Company, as applicable, shall (1) issue and deliver to such holder of Series B Preferred Stock, or such holder’s nominees, documentation of the book entry for the number of whole shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and documentation of the book entry of the number (if any) of the Series B Preferred Shares represented by the surrendered certificate that were not converted into Common Stock and (2) pay in cash such amount as provided in Section 5(d)in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion.
(iii)The provisions of Sections 5(c) through 5(e) shall apply to any Mandatory Conversion.
7.Adjustment of the Series B Conversion Rate.
(a)Adjustments. The Series B Conversion Rate will be subject to adjustment, without duplication, upon the occurrence of the following events, except that the Company shall not make any adjustment to the Series B Conversion Rate if each holder of the Series B Preferred Shares participates, at the same time and upon the same terms as holders of shares of Common Stock and solely as a result of holding Series B Preferred Shares, in any transaction described in this Section 7(a), without having to convert its Series B Preferred Shares, as if it held a number of shares of Common Stock equal to the number of shares of Common Stock into which the
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Series B Preferred Shares held by such holder are then convertible pursuant to Section 5 (for the avoidance of doubt, without giving effect to any Individual Holder Share Cap).
(i)The issuance of shares of Common Stock as a dividend or distribution on all or substantially all of the shares of Common Stock, or a subdivision or combination of shares of Common Stock or a reclassification of shares of Common Stock into a greater or lesser number of shares of Common Stock, in which event the Series B Conversion Rate shall be adjusted based on the following formula:
CR1 = CR0 x (OS1 / OS0)
CR0 = the Series B Conversion Rate in effect immediately prior to the open of business on (i) the Ex-Dividend Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification

CR1 = the new Series B Conversion Rate in effect immediately after the open of business on (i) the Ex-Dividend Date for such dividend or distribution, or (ii) the effective date of such subdivision, combination or reclassification

OS0 = the number of shares of Common Stock outstanding immediately prior to the open of business on (i) the Ex-Dividend Date for such dividend or distribution or (ii) the effective date of such subdivision, combination or reclassification

OS1 = the number of shares of Common Stock outstanding immediately after, and solely as a result of, the completion of such event
Any adjustment made pursuant to this clause (i) shall be effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or the effective date of such subdivision, combination or reclassification, as applicable. If any such event is announced or declared but does not occur, the Series B Conversion Rate shall be readjusted, effective as of the date the Company announces that such event shall not occur, to the Series B Conversion Rate that would then be in effect if such event had not been announced or declared.

(ii)The dividend, distribution or other issuance to all or substantially all holders of shares of Common Stock of rights (other than rights, options or warrants distributed in connection with a stockholders rights plan (in which event the provisions of Section 7(a)(vi) shall apply)), options or warrants entitling them to subscribe for or purchase shares of Common Stock for a period expiring forty-five (45) days or less from the date of issuance thereof, at a price per share that is less than the Current Market Price as of the trading date before the date of such dividend, distribution or other issuance is publicly announced (the “Public Announcement Date”) for such issuance, in which event the Series B Conversion Rate will be increased based on the following formula:
CR1 = CR0 x [(OS0 + X) / (OS0 + Y)]

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CR0 = the Series B Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend, distribution or issuance

CR1 = the new Series B Conversion Rate in effect immediately following the open of business on the Ex-Dividend Date for such dividend, distribution or issuance

OS0 = the number of shares of Common Stock outstanding immediately prior to the open of business on the Ex-Dividend Date for such dividend, distribution or issuance

X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants

Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the Current Market Price as of the Public Announcement Date for such dividend, distribution or issuance

For purposes of this clause (ii), in determining whether any rights, options or warrants entitle the holders to purchase the shares of Common Stock at a price per share that is less than the Current Market Price as of the Public Announcement Date for such dividend, distribution or issuance, there shall be taken into account any consideration the Company receives for such rights, options or warrants, and any amount payable on exercise thereof, with the value of such consideration, if other than cash, to be the Fair Market Value thereof.

Any adjustment made pursuant to this clause (ii) shall become effective immediately following the open of business on the Ex-Dividend Date for such dividend, distribution or issuance. In the event that such rights, options or warrants are not so issued, the Series B Conversion Rate shall be readjusted, effective as of the date the Company publicly announces its decision not to issue such rights, options or warrants, to the Series B Conversion Rate that would then be in effect if such dividend, distribution or issuance had not been declared. To the extent that such rights, options or warrants are not exercised prior to their expiration or shares of Common Stock are otherwise not delivered pursuant to such rights, options or warrants upon the exercise of such rights, options or warrants, the Series B Conversion Rate shall be readjusted to the Series B Conversion Rate that would then be in effect had the adjustments made upon the dividend, distribution or issuance of such rights, options or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered.

(iii)The distribution by the Company to all or substantially all holders of its shares of Common Stock (other than for cash in lieu of fractional shares), shares of any class of its share capital, evidences of its indebtedness, assets, other property, securities or special cash dividends, but excluding (A) dividends or distributions referred to in Section 7(a)(i) or Section 7(a)(ii) hereof, (B) Distribution Transactions as to which Section 7(a)(iv) shall apply, (C) rights, options or warrants distributed in connection with
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a shareholder rights plan as to which Section 7(a)(vi) shall apply and (D) distributions of Exchange Property described in Section 7(c) hereof (any of such shares of its share capital, indebtedness, assets, property, securities or special cash dividends that are not so excluded are hereinafter called the “Distributed Property”), then, in each such case the Series B Conversion Rate shall be adjusted based on the following formula:
CR1 = CR0 x [SP0 / (SP0 - FMV)]
CR0 = the Series B Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such dividend or distribution

CR1 = the new Series B Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution

SP0 = the Current Market Price as of the trading date before the Ex-Dividend Date for such dividend or distribution

FMV = the Fair Market Value of the portion of Distributed Property distributed with respect to each outstanding share of Common Stock on the Ex-Dividend Date for such dividend or distribution; provided that in the event of a dividend or distribution of cash, FMV shall equal the amount in cash per share of Common Stock the Company distributes to all or substantially all holders of its shares of Common Stock; provided further that, if FMV is equal or greater than SP0, then in lieu of the foregoing adjustment, the Company shall distribute to each holder of Series B Preferred Shares on the date the applicable Distributed Property is distributed to holders of shares of Common Stock, but without requiring such holder to convert its Series B Preferred Shares, in respect of each Series B Preferred Share held by such holder, the amount of Distributed Property such holder would have received had such holder owned a number of shares of Common Stock equal to the Series B Conversion Rate on the Ex-Dividend Date for such dividend or distribution

Any adjustment made pursuant to this clause (iii) shall be effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. If any such dividend or distribution is declared but does not occur, the Series B Conversion Rate shall be readjusted, effective as of the date the Company announces that such dividend or distribution shall not occur, to the Series B Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(iv)The Company effects a Distribution Transaction, in which case the Series B Conversion Rate shall be increased based on the following formula:
CR1 = CR0 x [(FMV + MP0) / MP0]
CR0 = the Series B Conversion Rate in effect immediately prior to the end of the Valuation Period (as defined below)


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CR1 = the new Series B Conversion Rate in effect immediately after the end of the Valuation Period

FMV = the arithmetic average of the Weighted Average Prices for a share of common stock or similar equity interest distributed per share of Common Stock to holders of Common Stock over the first ten (10) consecutive Trading Day period after, and including, the Ex-Dividend Date for the Distribution Transaction (the “Valuation Period”); provided that, if there is no Weighted Average Price of the common stock or similar equity interest distributed to holders of the Common Stock on such Ex-Dividend Date, the Valuation Period shall be the ten (10) consecutive Trading Day period after, and including, the first Trading Day such Weighted Average Price is available

MP0 = the arithmetic average of the Weighted Average Price per share of Common Stock over the Valuation Period

Such adjustment shall become effective immediately following the close of business on the last Trading Day of the Valuation Period. If an adjustment to the Series B Conversion Rate is required under this Section 7(a)(iv), delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under this Section 7(a)(iv) shall be delayed to the extent necessary in order to complete the calculations provided for in this Section 7(a)(iv). If any Distribution Transaction is declared but not so paid or made, the Series B Conversion Rate shall be immediately decreased, effective as of the date the Board determines not to pay or make such dividend or distribution, to the Series B Conversion Rate that would then be in effect if such dividend or distribution had not been declared or announced.

(v)If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the shares of Common Stock that is subject to the then applicable tender offer rules under the Exchange Act, other than an odd lot tender offer pursuant to Rule 13e-4(h)(5) under the Exchange Act, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceeds the average of the Weighted Average Prices of the shares of Common Stock over the ten (10) consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Series B Conversion Rate shall be increased based on the following formula:
CR1 = CR0 x [AC + (SP1 x OS1)] / (OS0 x SP1)
CR0 = the Series B Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires

CR1 = the Series B Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires


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AC = the aggregate value of all cash and any other consideration (as determined by the Company) paid or payable for shares of Common Stock purchased in such tender or exchange offer

OS0 = the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer)

OS1 =     the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer)

SP1 = the average of the Weighted Average Prices of the shares of Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires

The adjustment to the Series B Conversion Rate under this Section 7(a)(v) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires. If an adjustment to the Series B Conversion Rate is required under this Section 7(a)(v), delivery of any additional shares of Common Stock that may be deliverable upon conversion as a result of an adjustment required under this Section 7(a)(v) shall be delayed to the extent necessary in order to complete the calculations provided for in this Section 7(a)(v). If the Company or one of its Subsidiaries is obligated to purchase shares of Common Stock pursuant to any such tender or exchange offer described in the preceding paragraph but the Company is, or such Subsidiary is, permanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded, the Series B Conversion Rate will be decreased to be the Series B Conversion Rate that would then be in effect if such tender or exchange offer had not been made or had been made only in respect of the purchases that have been effected.

(vi)If the Company has a stockholder rights plan in effect with respect to the shares of Common Stock at any Conversion Time, upon conversion of any of the Series B Preferred Shares, holders of such shares will receive, in addition to the applicable number of shares of Common Stock, the rights under such rights plan relating to such shares of Common Stock, unless, prior to such Conversion Time, the rights have (A) become exercisable or (B) separated from the shares of Common Stock (the first of such events to occur, a “Trigger Event”), in which case, the Series B Conversion Rate will be adjusted, effective automatically at the time of such Trigger Event, as if the Company had made a distribution of such rights to all holders of the shares of Common Stock as described in Section 7(a)(ii) (without giving effect to the forty-five (45) day limit on the exercisability of rights, options or warrants ordinarily subject to such Section
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7(a)(ii)), subject to appropriate readjustment in the event of the expiration, termination or redemption of such rights prior to the exercise, deemed exercise or exchange thereof. Notwithstanding the foregoing, to the extent any such stockholder rights are exchanged by the Company for shares of Common Stock or other property or securities, the Series B Conversion Rate shall be appropriately readjusted as if such stockholder rights had not been issued, but the Company had instead issued such shares of Common Stock or other property or securities as a dividend or distribution of shares of Common Stock pursuant to Section 7(a)(i) or 7(a)(iii), as applicable.
To the extent that such rights are not exercised prior to their expiration, termination or redemption, the Series B Conversion Rate shall be readjusted to the Series B Conversion Rate that would then be in effect had the adjustments made upon the occurrence of the Trigger Event been made on the basis of the issuance of, and the receipt of the exercise price with respect to, only the number of shares of Common Stock actually issued pursuant to such rights.

Notwithstanding anything to the contrary in this 7(a)(vi), no adjustment shall be required to be made to the Series B Conversion Rate with respect to any holder which is, or is an “affiliate” or “associate” of, an “acquiring person” (or analogous term) under such stockholder rights plan or with respect to any direct or indirect transferee of such holder who receives Series B Preferred Shares in such transfer after the time such holder becomes, or its affiliate or associate becomes, an “acquiring person” (or analogous term).

(b)Calculation of Adjustments. All adjustments to the Series B Conversion Rate shall be calculated by the Company to the nearest 1/10,000th of one share of Common Stock (or if there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment to the Series B Conversion Rate will be required unless such adjustment would require an increase or decrease of at least one percent of the Series B Conversion Rate; provided, however, that any such adjustment that is not required to be made will be carried forward and taken into account in any subsequent adjustment; provided further that any such adjustment of less than one percent that has not been made will be made upon any conversion.
(c)Reorganization Events.
(i)In the event of:
(A)any reclassification, statutory exchange, merger, consolidation or other similar business combination of the Company with or into another Person, in each case, pursuant to which at least a majority of the Common Stock is changed or converted into, or exchanged for, cash, securities or other property of the Company or another Person;
(B)any sale, transfer, lease or conveyance to another Person of all or a majority of the property and assets of the Company, in each case pursuant to which the Common Stock is converted into cash, securities or other property; or
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(C)any statutory exchange of securities of the Company with another Person (other than in connection with a merger or acquisition) or reclassification, recapitalization or reorganization of the Common Stock into other securities;
other than, in each case, any such transaction that constitutes a Deemed Liquidation Event, with respect to which, for the avoidance of doubt, the provisions of Section 4 shall apply (each of which is referred to as a “Reorganization Event”), each share of Series B Preferred Stock outstanding immediately prior to such Reorganization Event will, without the consent of the holders thereof, remain outstanding but shall become convertible into, out of funds legally available therefor, the number, kind and amount of securities, cash and other property (the “Exchange Property”) (with anti-dilution and other adjustments that are as nearly equivalent as practicable to the adjustments provided for in this Section 7) that the holder of such share of Series B Preferred Stock would have received in such Reorganization Event had such holder converted its shares of Series B Preferred Stock into the applicable number of shares of Common Stock immediately prior to the effective date of the Reorganization Event using the Series B Conversion Rate applicable immediately prior to the effective date of the Reorganization Event (for the avoidance of doubt, without giving effect to any Individual Holder Share Cap). If the holders of Common Stock are given an opportunity to make an election with respect to the Exchange Property, then the holders of the Series B Preferred Shares will receive the same notice, time and opportunity to make an election with respect to the Exchange Property as the holders of the Common Stock.
(ii)Successive Reorganization Events. The above provisions of this Section 7(c) shall similarly apply to successive Reorganization Events and the provisions of Section 7(a) shall apply to any shares of Capital Stock received by the holders of the Common Stock in any such Reorganization Event.
(iii)Reorganization Event Notice. The Company (or any successor) shall, no less than thirty (30) days prior to the anticipated effective date of any Reorganization Event, provide written notice to the holders of Series B Preferred Shares of such occurrence of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 7(c).
(iv)Reorganization Event Agreements. The Company shall not enter into any agreement for a transaction constituting a Reorganization Event unless (i) such agreement provides for or does not interfere with or prevent (as applicable) conversion of the Series B Preferred Stock into the Exchange Property in a manner that is consistent with and gives effect to this Section 7(c), and (ii) to the extent that the Company is not the surviving corporation in such Reorganization Event or will be dissolved in connection with such Reorganization Event, proper provision shall be made in the agreements governing such Reorganization Event for the conversion of the Series B Preferred Stock into Capital Stock of the Person surviving such Reorganization Event or such other continuing entity in such Reorganization Event.
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(d)When No Adjustment Required.
(i)Except as otherwise provided in this Section 7, the Series B Conversion Rate will not be adjusted for the issuance of shares of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or carrying the right to purchase any of the foregoing, or for the repurchase of shares of Common Stock.
(ii)Except as otherwise provided in this Section 7, the Series B Conversion Rate will not be adjusted as a result of the issuance of, the distribution of separate certificates representing, the exercise or redemption of, or the termination or invalidation of, rights pursuant to any stockholder rights plans.
(iii)No adjustment to the Series B Conversion Rate will be made:
(A)upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan in which purchases are made at market prices on the date or dates of purchase, without discount, and whether or not the Company bears the ordinary costs of administration and operation of the plan, including brokerage commissions;
(B)upon the issuance of any shares of Common Stock or options or rights to purchase such shares pursuant to any present or future employee, director or officer benefit or equity incentive arrangement, plan or program of or assumed by the Company or any of its Subsidiaries or of any employee agreements or arrangements or programs, including, without limitation, the Company’s 2021 Plan (as defined below) and 2021 Employee Stock Purchase Plan;
(C)except as otherwise provided in this Section 7 upon the issuance of any shares of Common Stock, including pursuant to any option, warrant, right, or exercisable, exchangeable or any shares or securities directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock;
(D)for dividends or distributions declared or paid to holders of shares of Common Stock in which holders of Series B Preferred Shares participate pursuant to Section 3;
(E)for a change in the par value of the Common Stock; or
(F)for a third-party tender offer or exchange offer by any party other than a tender offer or exchange offer by the Company or one or more of the Company’s Subsidiaries as described in Section 7(a)(v).
(e)Successive Adjustments. After an adjustment to the Series B Conversion Rate under this Section 7, any subsequent event requiring an adjustment under this Section 7 shall cause an adjustment to each such Series B Conversion Rate as so adjusted.
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(f)Multiple Adjustments. For the avoidance of doubt, if an event occurs that would trigger an adjustment to the Series B Conversion Rate pursuant to this Section 7 under more than one subsection hereof, such event, to the extent fully taken into account in a single adjustment, shall not result in multiple adjustments hereunder; provided, however, that if more than one subsection of this Section 7 is applicable to a single event, the subsection shall be applied that produces the highest adjusted Series B Conversion Rate.
(g)Notice of Adjustments. Whenever the Series B Conversion Rate is adjusted as provided under this Section 7, the Company shall within 10 Business Days following the occurrence of an event that requires such adjustment (or if the Company is not aware of such occurrence, within 10 Business Days after becoming so aware) compute the adjusted applicable Series B Conversion Rate in accordance with this Section 7 and prepare and transmit to the holders setting forth the applicable Series B Conversion Rate, the method of calculation thereof, and the facts requiring such adjustment and upon which such adjustment is based.
8.Voting Rights.
(a)Except as otherwise provided herein or as required by law, holders of Series B Preferred Shares shall be entitled to vote with the holders of shares of Common Stock (and any other class or series that may similarly be entitled to vote with the holders of Common Stock) and not as a separate class, at any annual or special meeting of stockholders of the Company. In the event of any vote or action by written consent with respect to a vote together with the Common Stock, but not with respect to a vote of any Preferred Stock as a separate class or series, each holder of Series B Preferred Shares shall be entitled to that number of votes, not to exceed such holder’s Individual Holder Share Cap, equal to the whole number of shares of Common Stock into which such holder’s aggregate number of Series B Preferred Shares are convertible (pursuant to Section 5 hereof) as of the close of business on the record date fixed for such vote or such written consent. Fractional votes by the holders of Series B Preferred Shares shall not be permitted, and any fractional voting rights shall (after aggregating all shares into which Series B Preferred Shares held by each holder could be converted) be rounded down to the nearest whole number. The holders of Series B Preferred Stock shall be entitled to notice of any meeting of stockholders in accordance with the bylaws of the Company (the “Bylaws”).
(b)In addition to any other vote or consent required herein or by law, for so long as any Series B Preferred Shares remain outstanding, the Company shall not, directly or indirectly, by amendment, merger, consolidation, recapitalization, reclassification, or otherwise, without the vote or written consent of the holders of at least a majority of the outstanding Series B Preferred Shares:
(i)create, authorize or issue any additional Series B Preferred Shares, any Parity Securities or Senior Securities or securities exchangeable for or convertible or exercisable into Series B Preferred Shares, Parity Securities or Senior Securities;
(ii)amend this Certificate of Designation or amend, waive or repeal the rights, preferences or privileges of the Series B Preferred Shares;
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(iii)amend, waive or repeal any provision of this Certificate of Designation, the Certificate of Incorporation or the Bylaws so as to adversely affect the rights, preferences, or privileges of the Series B Preferred Stock (it being understood that the authorization or issuance of Junior Securities shall be deemed not to adversely affect the rights, preferences or privileges of the Series B Preferred Stock);
(iv)increase or decrease (other than by conversion or redemption in accordance with the terms hereof) the authorized number of Series B Preferred Shares;
(v)exchange, reclassify or cancel the Series B Preferred Shares, except as explicitly contemplated by this Certificate of Designation;
(vi)declare or pay, or take any action resulting in the payment or declaration of, any dividend on, make any distribution to, or repurchase any shares of Common Stock or other Junior Securities other than: (x) a dividend payable solely in shares of Common Stock or other Junior Securities or (y) any redemption or acquisition of shares of Common Stock in connection with (1) the repurchase or withholding of shares of Common Stock upon vesting, exercise or settlement or equity awards granted pursuant to the Company’s equity incentive programs approved by the Board; or (2) the repurchase of shares of Common Stock held by employees, officers, directors or consultants of the Company in connection with the termination of their employment or services pursuant to agreements or arrangements approved by the Board;
(vii)incur any Indebtedness other than Permitted Indebtedness; or
(viii)create, adopt, amend, terminate or repeal any equity (or equity-linked) compensation or incentive plan or increase the amount or number of equity securities reserved for issuance thereunder if the New York Stock Exchange would require stockholder approval of such action; provided that the Company’s 2021 Incentive Award Plan (as it exists on the Series B Original Issue Date) (the “2021 Plan”) and any automatic annual increases pursuant to the 2021 Plan shall not require approval under this clause 8(b)(viii).
(c)In addition to any vote or consent required by applicable law, this Certificate of Designation may only be amended, waived or modified by the prior affirmative vote or written consent of holders of at least a majority of the outstanding Series B Preferred Shares and any provision may be to the contrary, in addition to any vote required by applicable law.
(d)Each holder of Series B Preferred Shares shall be entitled to receive the same prior notice of any stockholders meeting as is provided to the holders of shares of Common Stock in accordance with the Bylaws of the Company, as well as prior notice of all stockholder actions to be taken by legally available means in lieu of a meeting, and shall vote as a class with the holders of Common Stock as if they were a single class of securities upon any matter submitted to a vote of stockholders, except those matters required by law or by the terms hereof to be submitted to a class vote of the holders of Series B Preferred Shares, in which case the holders of Series B Preferred Shares only shall vote as a separate class, or those matters required
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by law to be submitted to a class vote of solely the holders of Common Stock, in which case such holders only shall vote as a separate class. In addition, notwithstanding any provisions to the contrary in the Certificate of Incorporation or Bylaws, the holders of Series B Preferred Shares may act by written consent with respect to Section 8(b).
9.Transfers; Certain Tax Matters.
(a)The Series B Preferred Shares shall be transferable by the holder thereof from time to time subject to any applicable legends or legal restrictions arising under applicable law; provided, that, notwithstanding anything herein to the contrary, the transferee that has received the Series B Preferred Shares pursuant to such transfer shall provide the Company with a properly completed IRS Form W-8 or W-9, as applicable (and any applicable successor form reasonably requested by the Company) upon such transfer. The Company will not impose any service charge on any holder for any transfer, conversion, redemption or exchange of any Series B Preferred Shares, but the Company may require payment of a sum sufficient to cover the amount of any stock transfer, documentary, stamp and similar taxes or similar governmental charges that may be imposed in connection with any transfer of Series B Preferred Shares, except in connection with the original issuance of the Series B Preferred Shares or pursuant to Section 9(b) below.
(b)The Company shall pay any and all issuance, delivery and transfer taxes in respect of the issuance or delivery of shares of Common Stock on conversion of the Series B Preferred Shares pursuant hereto. The Company shall not, however, be required to pay any tax in respect of any transfer involved in the issuance or delivery of shares of Common Stock in a name other than that of the holder of the Series B Preferred Shares so converted, and no such issuance or delivery shall be made unless and until the Person requesting such issuance or delivery has paid to the Company the amount of any such tax or has established to the Company’s satisfaction that such tax has been paid.
10.No Sinking Fund. Shares of Series B Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinking fund.
11.Certain Definitions. As used herein, the following terms will have the following meanings.
Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York, New York generally are open for use by customers on such day.
Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.
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close of business” shall mean 5:00 p.m., New York City time, on any applicable Business Day.
Contingent Obligation” is, for any Person, any direct or indirect liability of that Person for (a) any direct or indirect guaranty by such Person of any indebtedness, lease, dividend, letter of credit, credit card or other obligation of another, (b) any other obligation endorsed, co-made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (c) any obligations for undrawn letters of credit for the account of that Person; and (d) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.
Current Market Price” means, on any determination date, (i) if the shares of Common Stock are then listed and traded on a national securities exchange, the closing price on the applicable determination date as reported by the principal national securities exchange on which such shares are listed and traded and (ii) if such shares are not then listed and traded on a national securities exchange, the fair market value per share of Common Stock as determined by the Board in good faith.
Disqualified Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than for Qualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than for Qualified Capital Stock), in whole or in part, (b) is or becomes convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Capital Stock that would constitute Disqualified Capital Stock, (c) contains any mandatory repurchase obligation or any other repurchase obligation at the option of the holder thereof (other than for Qualified Capital Stock), in whole or in part or (d) provides for the scheduled payments of dividends in cash. Notwithstanding the preceding sentence, (i) the Series A Preferred Stock shall not constitute Disqualified Capital Stock and (ii) in the case of any Capital Stock issued pursuant to any plan for the benefit of, or by any such plan to, any director, employee or service provider to the Company or any of its Subsidiaries, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by the issuer thereof pursuant to an agreement approved by the Board.
Distribution Transaction” means any transaction by which a Subsidiary of the Company ceases to be a Subsidiary of the Company by reason of the distribution of such Subsidiary’s equity securities to holders of the Common Stock, whether by means of a spin-off, split-off, redemption, reclassification, exchange, share dividend, share distribution, rights offering or similar transaction, which equity securities are, or when issued, will be, listed or admitted for trading on a U.S. national securities exchange.
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Ex-Dividend Date” means, with respect to an issuance, dividend or distribution on the shares of Common Stock, the first date on which such shares of Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such issuance, dividend or distribution (including pursuant to due bills or similar arrangements required by the relevant share exchange). For the avoidance of doubt, any alternative trading convention on the applicable exchange or market in respect of the shares of Common Stock under a separate ticker symbol or CUSIP number will not be considered “regular way” for this purpose.
Exchange Act” means the Securities Exchange Act of 1934, as amended.
Fair Market Value” with respect to the value of a security or other property or asset shall mean:
(i)if traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the twenty (20) day period ending three (3) days prior to the closing of the transaction giving rise to such distribution;
(ii)if actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the twenty (20) day period ending three (3) days prior to the closing of the transaction giving rise to such distribution; and
(iii)if there is no active public market, the value shall be the fair market value thereof, as determined by the Board acting in good faith.
Fundamental Change” means: (1) a merger, reorganization, consolidation or other business combination of the Company with or into any other corporation or corporations or other business entity or entities (unless the stockholders of the Company immediately prior to such merger, reorganization or consolidation hold immediately after such merger, reorganization or consolidation at least 50% of the Total Voting Power of the surviving corporation or business entity (or if the surviving or resulting corporation is a Wholly Owned Subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation)); or (2) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions of all or substantially all of the assets of the Company and its Subsidiaries, taken as a whole, except where such sale, conveyance, exchange or transfer is to one or more Wholly Owned Subsidiaries of the Company.
Indebtedness” means:
(a)indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit;
(b)obligations evidenced by notes, bonds, debentures, loans or similar instruments;
(c)capital lease obligations to the extent recorded as a liability on a balance sheet prepared in accordance with GAAP;
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(d)Disqualified Capital Stock;
(e)the face amount of any letter of credit issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings;
(f)Contingent Obligations;
(g)other short- and long-term obligations under debt agreements, lines of credit and extensions of credit; and
(h)any guarantee of any of the foregoing.
The principal amount of any Indebtedness shall be deemed to the stated principal or face amount as such amount may be increased through payment-in-kind interest, redemption or “make whole” premiums (with any potential future increases assumed to have occurred at the time of the initial incurrence of such Indebtedness in the calculation of such principal or face amount).
Individual Holder Share Cap” means, with respect to Eclipse Early Growth Fund I, L.P., the maximum number of shares of Common Stock or Total Voting Power that could be beneficially owned by such holder, or a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) that includes such holder, initially equal to 48.9%, with such specified percentage subject to change or removal from time to time by written notice by such holder to the Company in such holder’s sole discretion; provided, however, that any increase in such holder’s Individual Holder Share Cap will not be effective before the sixty-first (61st) day after such written notice is delivered to the Company. So long as the Individual Holder Share Cap is applicable pursuant to the provisions of this Certificate of Designation, the Individual Holder Share Cap shall be interpreted to restrict the exercise of voting rights or conversion rights hereunder solely to the extent that such holder of Series B Preferred Shares (collectively with other “persons” or “groups” under 13(d)(3) of the Exchange) would be able to exercise more than the specified percentage of the Total Voting Power or hold or beneficially own more than the specified percentage of the number of outstanding shares of Common Stock as of the applicable record date, voting date or conversion date.
Market Disruption Event” means, with respect to the Common Stock or any other security of the Company, (i) a failure by the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted to open for trading during its regular trading session or (ii) the occurrence or existence for more than one-half hour period in the aggregate on any Scheduled Trading Day for Common Stock or such other security of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted or otherwise) of the Common Stock or such other security or in any options contracts or future contracts relating to the Common Stock or such other security, and such suspension or limitation occurs or exists at any time before 1:00 p.m., New York City time, on such day.
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Permitted Indebtedness” means:
(i)Indebtedness existing on the Series B Original Issue Date (other than Indebtedness that qualifies as “Permitted Indebtedness” pursuant to clause (iv) below);
(ii)Indebtedness of the Company or any Wholly Owned Subsidiary of the Company owing to the company or any Wholly Owned Subsidiary of the Company;
(iii)unsecured Indebtedness to trade creditors incurred in the ordinary course of business;
(iv)Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;
(v)Indebtedness pursuant to the Revolving Line (as defined in the SVB Loan Agreement as in effect as of the Series B Original Issue Date);
(vi)extensions, exchanges, replacements, renewals, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (i) through (v) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more materially burdensome terms (when taken as a whole) upon the Company or its Subsidiaries (plus any premium, accrued interest, and fees and expenses incurred in connection with such extension, exchange, replacement, renewal, refinancing, modification, amendment or restatement) plus (without duplication) an amount equal to any existing commitment unutilized thereunder and letters of credit undrawn thereunder, as the case may be;
(vii)Indebtedness that, together with all Indebtedness that does not qualify for any preceding clause of this definition of Permitted Indebtedness, has an aggregate principal amount not in excess of $11,000,000.
Person” means any individual, corporation, estate, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or any other entity.
Qualified Capital Stock” means Capital Stock that is not Disqualified Capital Stock.
Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal exchange or market on which the Common Stock or such security of the Company, as applicable, is so listed or quoted. If the Common Stock is not listed on any U.S. national securities exchange, then Scheduled Trading Day shall be deemed to mean a Business Day.
Securities Act” means the Securities Act of 1933, as amended.
Series B Conversion Rate” shall initially be 129.6596 shares of Common Stock per Series B Preferred Share. The Series B Conversion Rate is subject to adjustment from time to time pursuant to Section 7.
Series B Liquidation Preference” shall mean the Series B Original Issue Price.
Series B Original Issue Date” shall mean February 28, 2024.
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Series B Original Issue Price” means $1,000.00 per share.
Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.
SVB Loan Agreement” means the Company’s Third Amended and Restated Loan and Security Agreement, dated as of November 23, 2022 (as amended), as in effect as of the Series B Original Issue Date.
Total Voting Power” means the aggregate number of votes which may be cast by holders of outstanding Voting Securities, calculated on an as-if converted basis in the case of securities that become Voting Securities only upon exercise or conversion thereof.
Trading Day” means a day on which (i) there is no Market Disruption Event, (ii) trading in the Common Stock generally occurs on the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted, and (iii) the Current Market Price for the Common Stock is available on such securities exchange or market; provided that if the Common Stock is not so listed or traded, “Trading Day” means a Business Day.
Voting Securities” means all securities of the Company entitled, in the ordinary course, to vote in the election of directors of the Company.
Weighted Average Price” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “OWLT <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock) on such Trading Day reasonably determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company. The Weighted Average Price shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%.”
12.General Provisions.
(a)All notices or communications in respect of the Series B Preferred Stock shall be sufficiently given if given in writing and delivered in person or by e-mail, facsimile or first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designation, in the Certificate of Incorporation or Bylaws or by applicable law or
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regulation. Notwithstanding the foregoing, if the Series B Preferred Stock is issued in book-entry form through The Depository Trust Company or any similar facility, such notices may be given to the holders of the Series B Preferred Stock in any manner permitted by such facility.
(b)Any Series B Preferred Shares which are converted, repurchased or redeemed shall be automatically and immediately retired and shall not be reissued, sold or transferred.
(c)Any waiver by the Company or a holder of Series B Preferred Shares of a breach of any provision of this Certificate of Designation 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 Certificate of Designation or a waiver by any other holders. The failure of the Company or a holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Company or a holder must be in writing.
(d)Without limiting the generality of Sections 4(c), 6 and 8(b), in determining whether the holders of the required number of Series B Preferred Shares have concurred in any approval, direction, waiver or consent, Series B Preferred Shares owned by the Company or any of its Subsidiaries will be deemed not to be outstanding.
(e)In the event any Series B Preferred Shares shall be converted, redeemed, repurchased or otherwise acquired by the Company or any of its Subsidiaries or is otherwise no longer outstanding, such shares shall be canceled and shall not be reissued by the Company. Upon the receipt of instructions to convert Series B Preferred Shares under Section 5 (or in the case of any certificated shares, surrender of certificates representing such Series B Preferred Shares) or following the Conversion Time or Redemption Time pursuant to a Mandatory Exit Event, such shares shall no longer be deemed to be outstanding and all rights of a holder with respect to such shares shall immediately terminate except the rights to receive shares of Common Stock, the Series B Redemption Price and all other amounts payable pursuant to this Certificate of Designation, as applicable.
(f)If any term of the Series B Preferred Stock (or part thereof) set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other terms (or parts thereof) set forth herein which can be given effect without the invalid, unlawful or unenforceable term will, nevertheless, remain in full force and effect, and no term herein (or parts thereof) set forth will be deemed dependent upon any other such term unless so expressed herein.
(g)The headings of the sections of this Certificate of Designation are for convenience of reference only and shall not define, limit or affect any of the provisions hereof.



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IN WITNESS WHEREOF, the Company has caused this Certificate of Designation to be executed this ______ day of February, 2024.

OWLET, INC.
By:
Name:Kurt Workman
Title:Chief Executive Officer


[Signature Page to Certificate of Designation]

Exhibit 4.1

Form Final

FORM OF WARRANT
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
WARRANT
TO PURCHASE
SHARES OF CLASS A COMMON STOCK
OF
OWLET, INC.
[__________], 2024
No. W-[__]
FOR VALUE RECEIVED, the undersigned, Owlet, Inc., a Delaware corporation (together with its successors and assigns, the “Company”), hereby certifies that:
[____________________]
or its registered assign is entitled to subscribe for and purchase, at the Warrant Exercise Price per share, the Warrant Share Number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock. This Warrant is issued pursuant to that certain Investment Agreement, dated as of February 25, 2024, by and among the Company and the purchasers named therein (the “Investment Agreement”). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 7 hereof.
1.Term. The right to subscribe for and purchase Warrant Shares represented hereby shall expire at 5:00 P.M. (New York City time) on February 28, 2029 (such period from the date hereof until such date being the “Term”).
2.Method of Exercise; Payment; Issuance of New Warrant; Transfer and Exchange.
(a)Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time, and in the event that this Warrant has not been exercised in full as of the last Business Day during the Term, to the extent the fair market value of one share of Common Stock as determined in accordance with Section 2(c) is greater than the Warrant Exercise Price, the purchase rights represented by this Warrant shall be deemed to be automatically exercised in full by the Holder as of such last Business Day on a net-issue basis pursuant to Section 2(c) (the “Automatic Exercise”), provided, that, notwithstanding anything to the contrary set forth herein, any exercise of this Warrant shall be subject to and conditioned upon making and receipt of all filings, notifications, expirations of waiting periods, waivers and approvals under the HSR Act or any foreign antitrust or competition laws, requirements or regulations necessary in connection with the issuance of the applicable Warrant Shares upon exercise of this Warrant in accordance with Sections 2(b) and 2(c) as contemplated by Section 4.04 of the Investment Agreement. Notwithstanding anything to the contrary set forth in this Warrant, if the Warrant is exercised, in whole or in part, in connection with the exercise of the Holder’s registration rights in accordance with the Registration Rights Agreement or Investment Agreement, as applicable, then this Warrant shall not be deemed to have been exercised to the extent that the applicable Warrant Shares are not sold in the applicable offering due to the Company’s breach of its obligations or exercise of its suspension rights thereunder.



(b)Cash Exercise. The Holder may exercise this Warrant in whole or in part by electing on one or more occasions, at any time prior to the expiration of the Term, to receive Warrant Shares issuable in accordance with this Warrant by (i) surrender of this Warrant at the principal office of the Company together with notice of such election and (ii) payment to the Company of the Warrant Exercise Price for the number of Warrant Shares in respect of which this Warrant is then being exercised. Payment of the aggregate Warrant Exercise Price upon exercise pursuant to this Section 2(b) shall be made by delivery of a check to the principal office of the Company, or by wire transfer of immediately available funds in accordance with written wire transfer instructions to be provided by the Company. For the avoidance of doubt, the Holder may not elect to exercise this Warrant for cash under this Section 2(b) in the event of an Automatic Exercise.
(c)Net Exercise. In lieu of exercising this Warrant on a cash basis pursuant to Section 2(b), the Holder may exercise this Warrant in whole or in part on a net-issue basis by electing on one or more occasions, at any time prior to the expiration of the Term, to receive Warrant Shares issuable in accordance with this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder a number of Warrant Shares computed using the following formula:
X = Y(A - B)
A

Where:    X = the number of the Warrant Shares to be issued to the Holder.
Y = the number of the Warrant Shares with respect to which the Warrant is exercised.
A = the fair market value of one share of Common Stock on the date of determination.
B = the Warrant Exercise Price (as adjusted to the date of such calculation).
For purposes of this Section 2(c), the fair market value of one share of Common Stock on the date of determination shall mean:
(i)if the Common Stock is publicly traded, the per share fair market value of the Common Stock shall be the closing price of the Common Stock as quoted on the NYSE, or the principal exchange or market on which the Common Stock is listed, on the last Trading Day ending prior to the date of determination; and
(ii)if the Common Stock is not so publicly traded, the per share fair market value of the Common Stock shall be such fair market value as determined in good faith by the Board of Directors of the Company; provided that Holder shall have a right to receive from the Board of Directors the calculations performed to arrive at such fair market value.
The date of determination for purposes of this Section 2(c) shall be the date the notice of exercise is delivered by the Holder to the Company.
(d)Issuance of Warrant Shares and New Warrant. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) the Warrant Shares so purchased shall be delivered by the Company within two (2) Business Days after such exercise and delivery of this Warrant and the exercise form (including payment of the Warrant Exercise Price) via (A) book-entry transfer crediting the account of the Holder through the Company’s transfer agent and registrar for the Common Stock (which as at the issuance of this Warrant is Continental Stock Transfer & Trust Company) or (B) if requested by the Holder, in the form of certificates in the name of the Holder, and (ii) unless this Warrant has expired, a new Warrant representing the number of Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder within such time.

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(e)Transferability of Warrant. The Holder may transfer this Warrant or the Warrant Shares to be issued upon exercise hereof at any time without the prior written approval of the Company; provided, that, notwithstanding anything herein to the contrary, the transferee that has received the Warrant pursuant to such transfer shall provide the Company with a properly completed IRS Form W-8 or W-9, as applicable (and any applicable successor form reasonably requested by the Company) upon such transfer.
(f)Compliance with Securities Laws.
(i)The Holder, by acceptance hereof, acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof have not been registered under the Act or under any U.S. state security laws and are being acquired pursuant to an exemption from registration under the Act solely for the Holder’s own account, and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Act and any applicable state securities laws.
(ii)Except as provided in paragraph (iii) below, this Warrant and all Warrant Shares issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (which, in the case of Warrant Shares, shall be in the form of an appropriate book entry notation):
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
(iii)Upon request of the Holder and, if requested by the Company, receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such legend is no longer required under the Act and applicable state securities laws, the Company shall promptly cause the legend to be removed from any certificate or other instrument for this Warrant or Warrant Shares to be transferred in accordance with the terms of this Warrant.
(g)No Fractional Shares or Scrip. No fractional shares or scrip representing fractional Warrant Shares shall be issued upon the exercise of this Warrant. In lieu of any fractional Warrant Share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the fair market value of one Warrant Share on the last Trading Day ending prior to the payment date multiplied by such fraction.
(h)Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in

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the case of mutilation, on surrender and cancellation of this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.
(i)No Rights of Stockholders. The Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise.
(j)Exercise Upon Fundamental Change. In the event of a Fundamental Change at any time during the Term, unless the Holder exercises this Warrant prior to the effectiveness of such Fundamental Change, this Warrant shall be deemed to be automatically exercised (with such exercise being deemed to be an Automatic Exercise) in full by the Holder as of immediately prior to the consummation of such Fundamental Change on a net-issue basis pursuant to Section 2(c). The Company shall provide the Holder with written notice of the contemplated Fundamental Change at least ten (10) business days before the consummation thereof (the “Fundamental Change Notice”).
(k)Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 2(j), in the event of a Fundamental Change, the Holder shall have the option to receive in lieu of the net-issue basis pursuant to Section 2(c), upon written notice to the Company within five (5) Business Days of the Fundamental Change Notice, cash on the date of the consummation of such Fundamental Change in an amount equal to the Black Scholes Value of such remaining unexercised portion. “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Change for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a five-year period, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Change, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Change and (D) a remaining option time equal to the remaining Term of this Warrant from the date of the public announcement of the applicable Fundamental Change. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds on the effective date of the Fundamental Change. 
(l)Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a Fundamental Change, such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.
(m)[Reserved] [For Eclipse: Individual Holder Share Cap.
(i)Notwithstanding anything to the contrary in this Warrant but subject to Section 2(m)(iii), no shares of Common Stock will be issued or delivered upon any exercise of this Warrant, and no Warrant of any Holder will be exercisable, in each case, to the extent, and only to the extent, that such exercise would result in the Holder, including as a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) that includes such Holder,

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beneficially owning shares of Common Stock, or total voting power with respect to the Company’s voting securities, in each case, in excess of such Holder’s Individual Holder Share Cap. For purposes of calculating beneficial ownership and total voting power, the aggregate number of shares of Common Stock and aggregate amount of voting power beneficially owned by the Holder shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted portion of this Warrant beneficially owned by the Holder, (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Holder (including, without limitation, any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise analogous to the limitation contained herein and (C) the number of votes of any securities that are subject to a limitation on voting analogous to the limitation contained herein; provided, that this exception only applies to the securities in excess of such Holder’s Individual Share Cap. For purposes of this Section 2(m), beneficial ownership and calculations of percentage ownership and total voting power will be determined in accordance with Rule 13d-3 under the Exchange Act. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the United States Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written request of the Holder, the Company shall within two (2) Business Days confirm to the Holder the number of shares of Common Stock and aggregate amount of total voting power then outstanding.
(i)Any purported exercise (and delivery of shares of Common Stock upon such exercise) will be void and have no effect to the extent, but only to the extent, that such exercise and delivery of shares of Common Stock would result in any Holder becoming the beneficial owner of shares of Common Stock or total voting power with respect to the Company’s voting securities, in each case, in excess of such Holder’s Individual Holder Share Cap. For the avoidance of doubt, to the extent that an exercise would exceed such Holder’s Individual Holder Share Cap, the Company shall effect such exercise in an amount up to such Holder’s Individual Holder Share Cap, if any.
(ii)Notwithstanding anything to the contrary in this Warrant, this Section 2(m) shall not apply with respect to the determination of the amount of securities or other consideration that the Holder may receive, and not otherwise restrict the number of shares of Common Stock or other securities, cash, property or other consideration which the Holder may receive or beneficially own, in the event of an Automatic Exercise, a Fundamental Change or the exercise of rights pursuant to Section 2(k).]
3.Certain Representations and Agreements. The Company represents, covenants and agrees:
(a)This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.
(b)All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company, and free from all taxes, liens and charges. The Company further covenants and agrees that during the period within which this Warrant may be exercised, the Company will at all times have authorized and reserved (as unissued or held in treasury) a sufficient number of shares of Common Stock to provide for the exercise

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in full of this Warrant. The Company will procure, subject to issuance or notice of issuance, the listing of any Warrant Shares issuable upon exercise of this Warrant on the principal stock exchange on which shares of Common Stock are then listed or traded.
(c)Subject to Section 4.04 of the Investment Agreement, the Company shall take all such actions as may be necessary to ensure that all Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any securities exchange upon which shares of the Company’s capital stock may be listed at the time of such exercise.
(d)The Company shall not amend or modify any provision of the Certificate of Incorporation or the by-laws of the Company in any manner that would materially and adversely affect the powers, preferences or relative participating, optional or other special rights of the Common Stock in a manner which would disproportionately and adversely affect the rights of the Holder.
4.Adjustments and Other Rights. The Warrant Exercise Price and Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as follows; provided, that no single event shall cause an adjustment under more than one subsection of this Section 4 so as to result in duplication.
(a)Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company shall at any time or from time to time (i) declare, order, pay or make a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) split, subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares or (iii) combine or reclassify the outstanding shares of Common Stock into a smaller number of shares, the number of Warrant Shares issuable upon exercise of this Warrant at the time of the record date for such dividend or distribution or the effective date of such split, subdivision, combination or reclassification shall be proportionately adjusted so that the Holder immediately after such record date or effective date, as the case may be, shall be entitled to purchase the number of shares of Common Stock which such Holder would have owned or been entitled to receive in respect of the shares of Common Stock subject to this Warrant after such date had this Warrant been exercised in full immediately prior to such record date or effective date, as the case may be. In the event of such adjustment, the Warrant Exercise Price in effect at the time of the record date for such dividend or distribution or the effective date of such split, subdivision, combination or reclassification shall be immediately adjusted to the number obtained by dividing (x) the product of (1) the number of Warrant Shares issuable upon the exercise of this Warrant in full before the adjustment determined pursuant to the immediately preceding sentence and (2) the Warrant Exercise Price in effect immediately prior to the record or effective date, as the case may be, for the dividend, distribution, split, subdivision, combination or reclassification giving rise to such adjustment by (y) the new number of Warrant Shares issuable upon exercise of the Warrant in full determined pursuant to the immediately preceding sentence.
(b)Distributions.
(i)If the Company shall fix a record date for the making of a dividend or other distribution (by spin-off or otherwise) on shares of Common Stock other than in cash, whether in other securities of the Company (including rights), evidences of indebtedness of the Company or any other Person or any other property (including securities or evidences of indebtedness of a subsidiary), or any combination thereof, excluding (i) dividends or distributions subject to adjustment pursuant to Section 4(a) or (ii) dividends or distributions of rights in connection with the adoption of a stockholder rights plan in customary form (including with respect to the receipt of such rights in respect of shares of Common Stock (including Warrant Shares) issued subsequent to the initial dividend or distribution of such rights), then in each such case, the

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number of Warrant Shares issuable upon exercise of this Warrant in full shall be increased by multiplying such number of Warrant Shares by a fraction, the numerator of which is the Market Price per share of Common Stock on such record date and the denominator of which is the Market Price per share of Common Stock on such record date less the Distribution Fair Market Value of the securities and/or any other property, as applicable, to be so paid or distributed in such dividend or distribution in respect of one share of Common Stock (in each case as of the record date of such dividend or distribution); such adjustment shall be effective as of the record date for such dividend or distribution. In the event of such adjustment, the Warrant Exercise Price shall immediately be decreased by multiplying such Warrant Exercise Price by a fraction, the numerator of which is the number of Warrant Shares issuable upon the exercise of this Warrant in full immediately prior to such adjustment, and the denominator of which is the new number of Warrant Shares issuable upon exercise of this Warrant determined in accordance with the immediately preceding sentence. Notwithstanding the foregoing, in the event that the Distribution Fair Market Value of the securities and/or any other property, as applicable, to be so paid or distributed in such dividend or distribution in respect of one share of Common Stock (in each case as of the record date of such dividend or distribution) is equal to or greater than the Market Price per share of Common Stock on such record date, then proper provision shall be made such that upon exercise of this Warrant, the Holder shall receive, in addition to the applicable Warrant Shares, the amount and kind of such securities and/or any other property such Holder would have received had such Holder exercised this Warrant immediately prior to such record date.
(ii)If the Company shall fix a record date for the making of a cash dividend on shares of Common Stock, the Warrant Exercise Price in effect prior thereto shall be reduced immediately thereafter by the per share amount of such cash dividend.
(iii)For purposes of the foregoing subsections (i) and (ii), in the event that such dividend or distribution in question is ultimately not so made, the Warrant Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant then in effect shall be readjusted, effective as of the date when the Board of Directors of the Company determines not to make such dividend or distribution, to the Warrant Exercise Price that would then be in effect and the number of Warrant Shares that would then be issuable upon exercise of this Warrant if such record date had not been fixed.
(c)Business Combinations. In case of any Business Combination or reclassification of Common Stock (other than a Business Combination or reclassification of Common Stock subject to adjustment pursuant to Section 4(a) or which qualifies as a Fundamental Change providing for the automatic exercise of the Warrant pursuant to Section 2(j)), notwithstanding anything to the contrary contained herein, (i) the Company shall notify the Holder in writing of such Business Combination or reclassification as promptly as practicable (but in no event later than five (5) Business Days prior to the consummation thereof), and (ii) the Holder’s right to receive Warrant Shares upon exercise of this Warrant shall be converted, effective upon the occurrence of such Business Combination or reclassification, into the right to exercise this Warrant to acquire the number of shares of stock or other securities or property (including cash) that the Common Stock issuable (at the time of such Business Combination or reclassification) upon exercise of this Warrant in full immediately prior to such Business Combination or reclassification would have been entitled to receive upon consummation of such Business Combination or reclassification; and in any such case, if applicable, the provisions set forth herein with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the Holder’s right to exercise this Warrant in exchange for any shares of stock or other securities or property pursuant to this paragraph. In determining the kind and amount of stock, securities or the property receivable upon exercise of this Warrant upon and following adjustment pursuant to this paragraph, if the holders of Common Stock have the right to elect the kind or amount of consideration receivable upon consummation of such Business Combination, then the Holder shall have the right to make the same election upon exercise of this Warrant with respect to the number of shares of stock or other securities or property which the Holder will receive upon exercise of this Warrant.

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(d)Certain Repurchases of Common Stock. In case the Company effects a Pro Rata Repurchase of Common Stock, then the Warrant Exercise Price shall be reduced to the price determined by multiplying the Warrant Exercise Price in effect immediately prior to the Effective Date of such Pro Rata Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase and (y) the Market Price of a share of Common Stock on the Trading Day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the denominator shall be the product of (x) the number of shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so repurchased and (y) the Market Price per share of Common Stock on the Trading Day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon the exercise of this Warrant in full shall be increased to the number obtained by dividing (i) the product of (x) the number of shares of Common Stock issuable upon the exercise of this Warrant before such adjustment, and (y) the Warrant Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this adjustment by (ii) the new Warrant Exercise Price determined in accordance with the immediately preceding sentence.
(e)Rounding of Calculations; Minimum Adjustments. All calculations under this Section 4 shall be made to the nearest one-hundredth (1/100th) of a cent or to the nearest one-tenth (1/10th) of a share, as the case may be. No adjustment in the Warrant Exercise Price or the number of Warrant Shares into which this Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.
(f)Timing of Issuance of Additional Securities Upon Certain Adjustments. In any case in which (1) the provisions of this Section 4 shall require that an adjustment (the “Subject Adjustment”) shall become effective immediately after a record date (the “Subject Record Date”) for an event and (2) the Holder exercises this Warrant after the Subject Record Date and before the consummation of such event, the Company may defer until the consummation of such event (or if later, the calculation of the Distribution Fair Market Value, if applicable) (i) issuing to such Holder the incrementally additional shares of Common Stock or other property issuable upon such exercise by reason of the Subject Adjustment and (ii) paying to such Holder any amount of cash in lieu of a fractional share of Common Stock; provided, that the Company upon request shall promptly deliver to such Holder a due bill or other appropriate instrument evidencing such Holder’s right to receive such additional shares (or other property, as applicable), and such cash, upon (and subject to) the consummation of such event (or completion of such calculation).
(g)Statement Regarding Adjustments. Whenever the Warrant Exercise Price or the Warrant Shares into which this Warrant is exercisable shall be adjusted as provided in this Section 4, the Company shall, within 10 Business Days thereafter, send a written notice to Holder, including a statement showing in reasonable detail the facts requiring such adjustment and the Warrant Exercise Price that shall be in effect and the Warrant Shares into which this Warrant shall be exercisable after such adjustment.
(h)Adjustment Rules. Any adjustments pursuant to this Section 4 shall be made successively whenever an event referred to herein shall occur. If an adjustment in Warrant Exercise Price

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made hereunder would reduce the Warrant Exercise Price to an amount below par value of the Common Stock, then such adjustment in Warrant Exercise Price made hereunder shall reduce the Warrant Exercise Price to the par value of the Common Stock.
(i)Proceedings Prior to any Action Requiring Adjustment. As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 4, the Company shall take such actions as are necessary, which may include obtaining regulatory, stock exchange or stockholder approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all shares of Common Stock that the Holder is entitled to receive upon exercise of this Warrant pursuant to this Section 4.
5.Taxes.
(a)Withholding. The Company and its paying agent shall be entitled to deduct and withhold taxes on all payments and distributions (or deemed distributions) with respect to the Warrants (or upon the exercise thereof) to the extent required by applicable law. If the Company or its paying agent determine that such deduction or withholding is required pursuant to applicable law, it shall notify the Holder of such determination at least 5 days prior to making such deduction or withholding, and the Company agrees to cooperate with the Holder in order to minimize or avoid the withholding to the maximum extent permitted by applicable law. To the extent that any amounts are so deducted or withheld and timely remitted to the appropriate governmental authority, such deducted or withheld amounts shall be treated for all purposes of this Warrant as having been paid to the Person in respect of which such deduction or withholding was made. In the event the Company previously remitted any amounts to a governmental authority on account of taxes required to be deducted or withheld in respect of any payment or distribution (or deemed distribution) with respect to a Warrant or upon the exercise thereof, the Company shall be entitled (i) to offset any such amounts against any amounts otherwise payable in respect of such Warrant, any Warrant Shares otherwise required to be issued upon the exercise of such Warrant or any amounts otherwise payable in respect of Warrant Shares received upon the exercise of such Warrant, or (ii) to require the Person in respect of whom such deduction or withholding was made to reimburse the Company for such amounts (and such Person shall promptly so reimburse the Company upon demand).
(b)Transfer Taxes. The Company shall pay any and all documentary, stamp and similar issue or transfer tax (“Transfer Taxes”) due on (x) the issue of Warrants and (y) the issue of Warrant Shares pursuant to the exercise of a Warrant. However, in the case of the exercise of a Warrant, the Company shall not be required to pay any Transfer Tax that may be payable in respect of the issue or delivery (or any transfer involved in the issue or delivery) of Warrant Shares to a beneficial owner other than the beneficial owner of the Warrant immediately prior to such exercise, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such Transfer Tax or has established to the satisfaction of the Company that such Transfer Tax has been paid or is not payable.
6.Frustration of Purpose. The Company shall not, by amendment of its certificate of incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith cooperate in the carrying out of all the provisions of this Warrant.
7.Definitions. For the purposes of this Warrant, the following terms have the following meanings:
Act” has the meaning specified under the legend hereto.

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Action” has the meaning specified under the Investment Agreement.
Affiliate” has the meaning specified under the Investment Agreement.
Business Combination” means a merger, consolidation, statutory share exchange, reorganization, recapitalization or similar extraordinary transaction (which may include a reclassification) involving the Company.
Business Day” has the meaning specified under the Investment Agreement.
Capital Stock” of any Person means any and all shares, interests, participations or other equivalents (however designated) of capital stock of such Person and all warrants or options to acquire such capital stock.
Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of the Company, as heretofore amended and as in effect on the Closing Date, and as it may subsequently be amended, modified, supplemented or restated from time to time in accordance with its terms and pursuant to applicable law.
Closing Date” has the meaning specified under the Investment Agreement.
Common Stock” means the Class A common stock, par value $0.0001 per share, of the Company.
Company” has the meaning specified in the preamble hereof.
Distribution Fair Market Value” means, with respect to any security or other property, the fair market value of such security or other property as determined by the Board of Directors of the Company based on the advice of a nationally recognized independent investment banking firm retained by the Company for this purpose, evidenced by a certified resolution of the fair market value from the Board of Directors of the Company delivered as promptly as practicable to the Holder; provided, that in the event that the Company shall set a record date for any distribution by the Company on shares of Common Stock of property or securities, other than securities of the Company, which become publicly traded upon completion of the distribution, then the Distribution Fair Market Value of such securities shall be the average of the closing prices of such security as quoted on the principal exchange or market on which such security is listed, on the five Trading Days following the effective date of such distribution. For the avoidance of doubt, the Distribution Fair Market Value of cash shall be the amount of such cash.
Exchange Act” means the Securities Exchange Act of 1934, as amended.
Fundamental Change” means: (1) a merger, reorganization, consolidation or other business combination of the Company with or into any other corporation or corporations or other business entity or entities (unless the stockholders of the Company immediately prior to such merger, reorganization or consolidation hold immediately after such merger, reorganization or consolidation at least 50% of the total voting power of the surviving corporation or business entity (or if the surviving or resulting corporation is a Wholly Owned Subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation)); or (2) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, except where such sale, conveyance, exchange or transfer is to one or more Wholly Owned Subsidiaries of the Company.
Holder” means the Person or Persons who shall from time to time own this Warrant.

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HSR Act” has the meaning specified under the Investment Agreement.
Individual Holder Share Cap” means, with respect to any Holder, the maximum number of shares of Common Stock or total voting power of the Company’s voting securities that could be beneficially owned by such Holder, or a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) that includes such Holder, equal to 48.9%, with such specified percentage subject to change or removal from time to time by written notice by such holder to the Company in such holder’s sole discretion; provided, however, that any increase in such holder’s Individual Holder Share Cap will not be effective before the sixty-first (61st) day after such written notice is delivered to the Company. For these purposes, beneficial ownership and calculations of percentage ownership or voting power will be determined in accordance with Rule 13d-3 under the Exchange Act.
Market Disruption Event” means, with respect to the Common Stock or any other security, (i) a failure by the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted to open for trading during its regular trading session or (ii) the occurrence or existence for more than one-half hour period in the aggregate on any Scheduled Trading Day for Common Stock or such other security of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted or otherwise) of the Common Stock or such other security or in any options contracts or future contracts relating to the Common Stock or such other security, and such suspension or limitation occurs or exists at any time before 1:00 p.m., New York City time, on such day.
Market Price” means, with respect to the Common Stock or any other security, on any given day, the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, of the shares of the Common Stock or of such security, as applicable, on the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted.
NYSE” means the New York Stock Exchange.
Person” means an individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization or any other entity.
Pro Rata Repurchase” means any purchase of shares of Common Stock by the Company or any Affiliate thereof pursuant to any tender offer or exchange offer subject to Section 13(e) of the Exchange Act, in each case whether for cash, shares of capital stock of the Company, other securities of the Company, evidences of indebtedness of the Company or any other Person or any other property, or any combination thereof, effected while this Warrant is outstanding; provided, however, that a Pro Rata Repurchase shall exclude any purchase of shares by the Company or any Affiliate thereof made in accordance with the requirements of Rule 10b-18 as in effect under the Exchange Act. The “Effective Date” of a Pro Rata Repurchase shall mean the date of acceptance of shares for purchase or exchange under any tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any Pro Rata Repurchase that is not a tender or exchange offer.
Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted. If the Common Stock is not listed on any U.S. national securities exchange, Scheduled Trading Day means a Business Day.
Subsidiary” of any Person means any corporation, association, partnership or other business entity of which more than fifty percent (50%) of the total voting power of the shares, interests,


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participations or other equivalents (however designated) of Capital Stock ordinarily entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, trustees or other voting members of the governing body thereof is at the time owned or controlled, directly or indirectly, by (a) such Person, (b) such Person and one or more Subsidiaries of such Person or (c) one or more Subsidiaries of such Person.
Term” has the meaning specified in Section 1 hereof.
Trading Day” means a day on which (i) there is no Market Disruption Event, (ii) trading in the Common Stock generally occurs on the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted, and (iii) the Market Price for the Common Stock is available on such securities exchange or market; provided that if the Common Stock is not so listed or traded, “Trading Day” means a Business Day.
VWAP” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “OWLT <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock) on such Trading Day reasonably determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company. The VWAP shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
Warrant” means this Warrant and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(d) hereof.
Warrant Exercise Price” means $7.7125, subject to adjustment as set forth herein.
Warrant Share Number” means [•],1 subject to adjustment as set forth herein.
Warrant Shares” means shares of Common Stock issuable upon exercise of this Warrant.
Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%.”
8.Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Company and the Holder.
9.Governing Law; Jurisdiction; Specific Performance. This Warrant shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Delaware. All Actions arising out of or relating to this Warrant shall be heard and determined in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any Action, any state or federal court within the State of Delaware) and the parties hereto hereby
1 NTD: To equal 150% of the number of shares of Common Stock that such Holder’s shares of Series B preferred stock are initially convertible.

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irrevocably submit to the exclusive jurisdiction and venue of such courts in any such Action and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such Action. The consents to jurisdiction and venue set forth in this Section 9 shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto. Each party hereto agrees that service of process upon such party in any Action arising out of or relating to this Warrant shall be effective if notice is given by overnight courier at the address set forth in Section 10 of this Warrant. The parties hereto agree that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law; provided, however, that nothing in the foregoing shall restrict any party’s rights to seek any post-judgment relief regarding, or any appeal from, a final trial court judgment. The parties hereto agree that irreparable damage for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Warrant in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties acknowledge and agree that the parties shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Warrant and to enforce specifically the terms and provisions hereof in the courts without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Warrant, and this right of specific enforcement is an integral part of the terms of this Warrant. The parties agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, and agree not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law. The parties acknowledge and agree that any party shall not be required to provide any bond or other security in connection with its pursuit of an injunction or injunctions to prevent breaches of this Warrant and to enforce specifically the terms and provisions hereof.
10.Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next Business Day, (c) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) Business Day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next Business Day delivery, with written verification of receipt, to the parties at the following addresses (or at such other address for a party hereto as shall be specified in a notice given in accordance with this Section 10):
(a)If to the Company:
Owlet, Inc.
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84042
Attn: Chief Legal Officer
Email: legal@owletcare.com
with a copy to (which copy alone shall not constitute notice):
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626-1925
Attn: Drew Capurro
Email: Drew.Capurro@lw.com



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(b) if to the Holder, as set forth on the Holder’s signature page hereto.
11.Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the Company and the Holder and their respective successors and permitted assigns (subject to Section 2(f) with respect to the Holder).
12.Modification and Severability. The provisions of this Warrant will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of any other provision hereof. To the fullest extent permitted by law, if any provision of this Warrant, or the application thereof to any Person or circumstance, is invalid or unenforceable (a) a suitable and equitable provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Warrant and the application of such provision to other Persons, entities or circumstances will not be affected by such invalidity or unenforceability.
13.Interpretation.
(a)When a reference is made in this Warrant to a Section, such reference shall be to a Section of this Warrant unless otherwise indicated. The headings contained in this Warrant are for reference purposes only and shall not affect in any way the meaning or interpretation of this Warrant. Whenever the words “include,” “includes” or “including” are used in this Warrant, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Warrant shall refer to this Warrant as a whole and not to any particular provision of this Warrant unless the context requires otherwise. The words “date hereof” when used in this Warrant shall refer to the date of this Warrant. The terms “or,” “any” and “either” are not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” All terms defined in this Warrant shall have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Warrant are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Unless otherwise specifically indicated, all references to “dollars” or “$” shall refer to the lawful money of the United States. References to a Person are also to its permitted assigns and successors. When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant to this Warrant, the date that is the reference date in calculating such period shall be excluded (unless otherwise required by law, if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day).
[Signature pages follow]


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IN WITNESS WHEREOF, the Company has duly executed this Warrant as of the first date written above.
OWLET, INC.
By:
Name:
Title:




[Signature Page to Warrant]


Agreed and Acknowledged:
By:
Name:
Title:
Notice information per Section 10:











[Signature Page to Warrant]
Exhibit 4.2
WARRANT
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
This Amended and Restated Warrant, dated as of February 25, 2024, hereby amends and restates, in its entirety, that certain Warrant to Purchase Shares of Common Stock issued by the Company (as defined below) to Eclipse Early Growth Fund I, L.P. (“Eclipse”) on February 17, 2023, in order to (a) revise the Warrant Exercise Price and Warrant Share Number (each as defined below) to reflect the Company’s reverse stock split effective on July 7, 2023 and (b) amend certain other terms as contained herein.

AMENDED AND RESTATED WARRANT
TO PURCHASE
SHARES OF CLASS A COMMON STOCK
OF
OWLET, INC.
February 25, 2024
No. W-1
FOR VALUE RECEIVED, the undersigned, Owlet, Inc., a Delaware corporation (together with its successors and assigns, the “Company”), hereby certifies that
Eclipse Early Growth Fund I, L.P.
or its registered assign is entitled to subscribe for and purchase, at the Warrant Exercise Price per share, the Warrant Share Number of duly authorized, validly issued, fully paid and non-assessable shares of Common Stock. This Warrant is issued pursuant to that certain Investment Agreement, dated as of February 17, 2023, by and among the Company and the purchasers named therein (the “Investment Agreement”). Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 7 hereof.
1.Term. The right to subscribe for and purchase Warrant Shares represented hereby shall expire at 5:00 P.M. (New York City time) on February 17, 2028 (such period from the date hereof until such date being the “Term”).
2.Method of Exercise; Payment; Issuance of New Warrant; Transfer and Exchange.
(a)Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part at any time and from time to time, and in the event that this Warrant has not been exercised in full as of the last Business Day during the Term, to the extent the fair market value of one share of Common Stock as determined in accordance with Section 2(c) is greater than the Warrant Exercise Price, the purchase rights represented by this Warrant shall be deemed to be automatically exercised in full by the



Holder as of such last Business Day on a net-issue basis pursuant to Section 2(c) (the “Automatic Exercise”), provided, that, notwithstanding anything to the contrary set forth herein, any exercise of this Warrant shall be subject to and conditioned upon making and receipt of all filings, notifications, expirations of waiting periods, waivers and approvals under the HSR Act or any foreign antitrust or competition laws, requirements or regulations necessary in connection with the issuance of the applicable Warrant Shares upon exercise of this Warrant in accordance with Sections 2(b) and 2(c) as contemplated by Section 4.04 of the Investment Agreement. Notwithstanding anything to the contrary set forth in this Warrant, if the Warrant is exercised, in whole or in part, in connection with the exercise of the Holder’s registration rights in accordance with the Registration Rights Agreement or Investment Agreement, as applicable, then this Warrant shall not be deemed to have been exercised to the extent that the applicable Warrant Shares are not sold in the applicable offering due to the Company’s breach of its obligations or exercise of its suspension rights thereunder.
(b)Cash Exercise. The Holder may exercise this Warrant in whole or in part by electing on one or more occasions, at any time prior to the expiration of the Term, to receive Warrant Shares issuable in accordance with this Warrant by (i) surrender of this Warrant at the principal office of the Company together with notice of such election and (ii) payment to the Company of the Warrant Exercise Price for the number of Warrant Shares in respect of which this Warrant is then being exercised. Payment of the aggregate Warrant Exercise Price upon exercise pursuant to this Section 2(b) shall be made by delivery of a check to the principal office of the Company, or by wire transfer of immediately available funds in accordance with written wire transfer instructions to be provided by the Company. For the avoidance of doubt, the Holder may not elect to exercise this Warrant for cash under this Section 2(b) in the event of an Automatic Exercise.
(c)Net Exercise. In lieu of exercising this Warrant on a cash basis pursuant to Section 2(b), the Holder may exercise this Warrant in whole or in part on a net-issue basis by electing on one or more occasions, at any time prior to the expiration of the Term, to receive Warrant Shares issuable in accordance with this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder a number of Warrant Shares computed using the following formula:
X = Y(A - B)
A

Where:    X = the number of the Warrant Shares to be issued to the Holder.
Y = the number of the Warrant Shares with respect to which the Warrant is exercised.
A = the fair market value of one share of Common Stock on the date of determination.
B = the Warrant Exercise Price (as adjusted to the date of such calculation).
For purposes of this Section 2(c), the fair market value of one share of Common Stock on the date of determination shall mean:
(i)if the Common Stock is publicly traded, the per share fair market value of the Common Stock shall be the closing price of the Common Stock as quoted on the NYSE, or the principal exchange or market on which the Common Stock is listed, on the last Trading Day ending prior to the date of determination; and
(ii)if the Common Stock is not so publicly traded, the per share fair market value of the Common Stock shall be such fair market value as determined in good faith by the Board of Directors of the Company; provided that Holder shall have a right to receive from the Board of Directors the calculations performed to arrive at such fair market value.


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The date of determination for purposes of this Section 2(c) shall be the date the notice of exercise is delivered by the Holder to the Company.
(d)Issuance of Warrant Shares and New Warrant. In the event of any exercise of the rights represented by this Warrant in accordance with and subject to the terms and conditions hereof, (i) the Warrant Shares so purchased shall be delivered by the Company within two (2) Business Days after such exercise and delivery of this Warrant and the exercise form (including payment of the Warrant Exercise Price) via (A) book-entry transfer crediting the account of the Holder through the Company’s transfer agent and registrar for the Common Stock (which as at the issuance of this Warrant is Continental Stock Transfer & Trust Company) or (B) if requested by the Holder, in the form of certificates in the name of the Holder, and (ii) unless this Warrant has expired, a new Warrant representing the number of Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder within such time.
(e)Transferability of Warrant. The Holder may transfer this Warrant or the Warrant Shares to be issued upon exercise hereof at any time without the prior written approval of the Company; provided, that, notwithstanding anything herein to the contrary, the transferee that has received the Warrant pursuant to such transfer shall provide the Company with a properly completed IRS Form W-8 or W-9, as applicable (and any applicable successor form reasonably requested by the Company) upon such transfer.
(f)Compliance with Securities Laws.
(i)The Holder, by acceptance hereof, acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof have not been registered under the Act or under any U.S. state security laws and are being acquired pursuant to an exemption from registration under the Act solely for the Holder’s own account, and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Act and any applicable state securities laws.
(ii)Except as provided in paragraph (iii) below, this Warrant and all Warrant Shares issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (which, in the case of Warrant Shares, shall be in the form of an appropriate book entry notation):
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.
(iii)Upon request of the Holder and, if requested by the Company, receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such legend is no longer required under the Act and applicable state securities laws, the Company shall promptly cause the legend to be removed from any certificate or other instrument for this Warrant or Warrant Shares to be transferred in accordance with the terms of this Warrant.
(g)No Fractional Shares or Scrip. No fractional shares or scrip representing fractional Warrant Shares shall be issued upon the exercise of this Warrant. In lieu of any fractional Warrant Share to which

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the Holder would otherwise be entitled, the Company shall make a cash payment equal to the fair market value of one Warrant Share on the last Trading Day ending prior to the payment date multiplied by such fraction.
(h)Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.
(i)No Rights of Stockholders. The Holder shall not be entitled to vote or receive dividends or be deemed the holder of Common Stock or any other securities of the Company that may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise.
(j)Exercise Upon Fundamental Change. In the event of a Fundamental Change at any time during the Term, unless the Holder exercises this Warrant prior to the effectiveness of such Fundamental Change, this Warrant shall be deemed to be automatically exercised (with such exercise being deemed to be an Automatic Exercise) in full by the Holder as of immediately prior to the consummation of such Fundamental Change on a net-issue basis pursuant to Section 2(c). The Company shall provide the Holder with written notice of the contemplated Fundamental Change at least ten (10) business days before the consummation thereof (the “Fundamental Change Notice”).
(k)Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 2(j), in the event of a Fundamental Change, the Holder shall have the option to receive in lieu of the net-issue basis pursuant to Section 2(c), upon written notice to the Company within five (5) Business Days of the Fundamental Change Notice, cash on the date of the consummation of such Fundamental Change in an amount equal to the Black Scholes Value of such remaining unexercised portion. “Black Scholes Value” means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Change for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a five-year period, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the applicable Fundamental Change, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Change and (D) a remaining option time equal to the remaining Term of this Warrant from the date of the public announcement of the applicable Fundamental Change. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds on the effective date of the Fundamental Change. 
(l)Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a Fundamental Change, such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.


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(m)Individual Holder Share Cap.
(i)Notwithstanding anything to the contrary in this Warrant but subject to Section 2(m)(iii), no shares of Common Stock will be issued or delivered upon any exercise of this Warrant, and no Warrant of any Holder will be exercisable, in each case, to the extent, and only to the extent, that such exercise would result in the Holder, including as a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) that includes such Holder, beneficially owning shares of Common Stock, or total voting power with respect to the Company’s voting securities, in each case, in excess of such Holder’s Individual Holder Share Cap. For purposes of calculating beneficial ownership and total voting power, the aggregate number of shares of Common Stock and aggregate amount of voting power beneficially owned by the Holder shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which the determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted portion of this Warrant beneficially owned by the Holder, (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company beneficially owned by the Holder (including, without limitation, any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise analogous to the limitation contained herein and (C) the number of votes of any securities that are subject to a limitation on voting analogous to the limitation contained herein; provided, that this exception only applies to the securities in excess of such Holder’s Individual Share Cap. For purposes of this Section 2(m), beneficial ownership and calculations of percentage ownership and total voting power will be determined in accordance with Rule 13d-3 under the Exchange Act. For purposes of this Warrant, in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the United States Securities and Exchange Commission, as the case may be, (2) a more recent public announcement by the Company or (3) any other written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written request of the Holder, the Company shall within two (2) Business Days confirm to the Holder the number of shares of Common Stock and aggregate amount of total voting power then outstanding.
(ii)Any purported exercise (and delivery of shares of Common Stock upon such exercise) will be void and have no effect to the extent, but only to the extent, that such exercise and delivery of shares of Common Stock would result in any Holder becoming the beneficial owner of shares of Common Stock or total voting power with respect to the Company’s voting securities, in each case, in excess of such Holder’s Individual Holder Share Cap. For the avoidance of doubt, to the extent that an exercise would exceed such Holder’s Individual Holder Share Cap, the Company shall effect such exercise in an amount up to such Holder’s Individual Holder Share Cap, if any.
(iii)Notwithstanding anything to the contrary in this Warrant, this Section 2(m) shall not apply with respect to the determination of the amount of securities or other consideration that the Holder may receive, and not otherwise restrict the number of shares of Common Stock or other securities, cash, property or other consideration which the Holder may receive or beneficially own, in the event of an Automatic Exercise, a Fundamental Change or the exercise of rights pursuant to Section 2(k).
3.Certain Representations and Agreements. The Company represents, covenants and agrees:
(a)This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

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(b)All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company, and free from all taxes, liens and charges. The Company further covenants and agrees that during the period within which this Warrant may be exercised, the Company will at all times have authorized and reserved (as unissued or held in treasury) a sufficient number of shares of Common Stock to provide for the exercise in full of this Warrant. The Company will procure, subject to issuance or notice of issuance, the listing of any Warrant Shares issuable upon exercise of this Warrant on the principal stock exchange on which shares of Common Stock are then listed or traded.
(c)Subject to Section 4.04 of the Investment Agreement, the Company shall take all such actions as may be necessary to ensure that all Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any securities exchange upon which shares of the Company’s capital stock may be listed at the time of such exercise.
(d)The Company shall not amend or modify any provision of the Certificate of Incorporation or the by-laws of the Company in any manner that would materially and adversely affect the powers, preferences or relative participating, optional or other special rights of the Common Stock in a manner which would disproportionately and adversely affect the rights of the Holder.
4.Adjustments and Other Rights. The Warrant Exercise Price and Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as follows; provided, that no single event shall cause an adjustment under more than one subsection of this Section 4 so as to result in duplication.
(a)Stock Splits, Subdivisions, Reclassifications or Combinations. If the Company shall at any time or from time to time (i) declare, order, pay or make a dividend or make a distribution on its Common Stock in shares of Common Stock, (ii) split, subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares or (iii) combine or reclassify the outstanding shares of Common Stock into a smaller number of shares, the number of Warrant Shares issuable upon exercise of this Warrant at the time of the record date for such dividend or distribution or the effective date of such split, subdivision, combination or reclassification shall be proportionately adjusted so that the Holder immediately after such record date or effective date, as the case may be, shall be entitled to purchase the number of shares of Common Stock which such Holder would have owned or been entitled to receive in respect of the shares of Common Stock subject to this Warrant after such date had this Warrant been exercised in full immediately prior to such record date or effective date, as the case may be. In the event of such adjustment, the Warrant Exercise Price in effect at the time of the record date for such dividend or distribution or the effective date of such split, subdivision, combination or reclassification shall be immediately adjusted to the number obtained by dividing (x) the product of (1) the number of Warrant Shares issuable upon the exercise of this Warrant in full before the adjustment determined pursuant to the immediately preceding sentence and (2) the Warrant Exercise Price in effect immediately prior to the record or effective date, as the case may be, for the dividend, distribution, split, subdivision, combination or reclassification giving rise to such adjustment by (y) the new number of Warrant Shares issuable upon exercise of the Warrant in full determined pursuant to the immediately preceding sentence.
(b)Distributions.
(i)If the Company shall fix a record date for the making of a dividend or other distribution (by spin-off or otherwise) on shares of Common Stock other than in cash, whether in other securities of the Company (including rights), evidences of indebtedness of the Company or

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any other Person or any other property (including securities or evidences of indebtedness of a subsidiary), or any combination thereof, excluding (i) dividends or distributions subject to adjustment pursuant to Section 4(a) or (ii) dividends or distributions of rights in connection with the adoption of a stockholder rights plan in customary form (including with respect to the receipt of such rights in respect of shares of Common Stock (including Warrant Shares) issued subsequent to the initial dividend or distribution of such rights), then in each such case, the number of Warrant Shares issuable upon exercise of this Warrant in full shall be increased by multiplying such number of Warrant Shares by a fraction, the numerator of which is the Market Price per share of Common Stock on such record date and the denominator of which is the Market Price per share of Common Stock on such record date less the Distribution Fair Market Value of the securities and/or any other property, as applicable, to be so paid or distributed in such dividend or distribution in respect of one share of Common Stock (in each case as of the record date of such dividend or distribution); such adjustment shall be effective as of the record date for such dividend or distribution. In the event of such adjustment, the Warrant Exercise Price shall immediately be decreased by multiplying such Warrant Exercise Price by a fraction, the numerator of which is the number of Warrant Shares issuable upon the exercise of this Warrant in full immediately prior to such adjustment, and the denominator of which is the new number of Warrant Shares issuable upon exercise of this Warrant determined in accordance with the immediately preceding sentence. Notwithstanding the foregoing, in the event that the Distribution Fair Market Value of the securities and/or any other property, as applicable, to be so paid or distributed in such dividend or distribution in respect of one share of Common Stock (in each case as of the record date of such dividend or distribution) is equal to or greater than the Market Price per share of Common Stock on such record date, then proper provision shall be made such that upon exercise of this Warrant, the Holder shall receive, in addition to the applicable Warrant Shares, the amount and kind of such securities and/or any other property such Holder would have received had such Holder exercised this Warrant immediately prior to such record date.
(ii)If the Company shall fix a record date for the making of a cash dividend on shares of Common Stock, the Warrant Exercise Price in effect prior thereto shall be reduced immediately thereafter by the per share amount of such cash dividend.
(iii)For purposes of the foregoing subsections (i) and (ii), in the event that such dividend or distribution in question is ultimately not so made, the Warrant Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant then in effect shall be readjusted, effective as of the date when the Board of Directors of the Company determines not to make such dividend or distribution, to the Warrant Exercise Price that would then be in effect and the number of Warrant Shares that would then be issuable upon exercise of this Warrant if such record date had not been fixed.
(c)Business Combinations. In case of any Business Combination or reclassification of Common Stock (other than a Business Combination or reclassification of Common Stock subject to adjustment pursuant to Section 4(a) or which qualifies as a Fundamental Change providing for the automatic exercise of the Warrant pursuant to Section 2(j)), notwithstanding anything to the contrary contained herein, (i) the Company shall notify the Holder in writing of such Business Combination or reclassification as promptly as practicable (but in no event later than five (5) Business Days prior to the consummation thereof), and (ii) the Holder’s right to receive Warrant Shares upon exercise of this Warrant shall be converted, effective upon the occurrence of such Business Combination or reclassification, into the right to exercise this Warrant to acquire the number of shares of stock or other securities or property (including cash) that the Common Stock issuable (at the time of such Business Combination or reclassification) upon exercise of this Warrant in full immediately prior to such Business Combination or reclassification would have been entitled to receive upon consummation of such Business Combination or

7


reclassification; and in any such case, if applicable, the provisions set forth herein with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the Holder’s right to exercise this Warrant in exchange for any shares of stock or other securities or property pursuant to this paragraph. In determining the kind and amount of stock, securities or the property receivable upon exercise of this Warrant upon and following adjustment pursuant to this paragraph, if the holders of Common Stock have the right to elect the kind or amount of consideration receivable upon consummation of such Business Combination, then the Holder shall have the right to make the same election upon exercise of this Warrant with respect to the number of shares of stock or other securities or property which the Holder will receive upon exercise of this Warrant.
(d)Certain Repurchases of Common Stock. In case the Company effects a Pro Rata Repurchase of Common Stock, then the Warrant Exercise Price shall be reduced to the price determined by multiplying the Warrant Exercise Price in effect immediately prior to the Effective Date of such Pro Rata Repurchase by a fraction of which the numerator shall be (i) the product of (x) the number of shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase and (y) the Market Price of a share of Common Stock on the Trading Day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate purchase price of the Pro Rata Repurchase, and of which the denominator shall be the product of (x) the number of shares of Common Stock outstanding immediately prior to such Pro Rata Repurchase minus the number of shares of Common Stock so repurchased and (y) the Market Price per share of Common Stock on the Trading Day immediately preceding the first public announcement by the Company or any of its Affiliates of the intent to effect such Pro Rata Repurchase. In such event, the number of shares of Common Stock issuable upon the exercise of this Warrant in full shall be increased to the number obtained by dividing (i) the product of (x) the number of shares of Common Stock issuable upon the exercise of this Warrant before such adjustment, and (y) the Warrant Exercise Price in effect immediately prior to the Pro Rata Repurchase giving rise to this adjustment by (ii) the new Warrant Exercise Price determined in accordance with the immediately preceding sentence.
(e)Rounding of Calculations; Minimum Adjustments. All calculations under this Section 4 shall be made to the nearest one-hundredth (1/100th) of a cent or to the nearest one-tenth (1/10th) of a share, as the case may be. No adjustment in the Warrant Exercise Price or the number of Warrant Shares into which this Warrant is exercisable shall be made if the amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of Common Stock, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of Common Stock, or more.
(f)Timing of Issuance of Additional Securities Upon Certain Adjustments. In any case in which (1) the provisions of this Section 4 shall require that an adjustment (the “Subject Adjustment”) shall become effective immediately after a record date (the “Subject Record Date”) for an event and (2) the Holder exercises this Warrant after the Subject Record Date and before the consummation of such event, the Company may defer until the consummation of such event (or if later, the calculation of the Distribution Fair Market Value, if applicable) (i) issuing to such Holder the incrementally additional shares of Common Stock or other property issuable upon such exercise by reason of the Subject Adjustment and (ii) paying to such Holder any amount of cash in lieu of a fractional share of Common Stock; provided, that the Company upon request shall promptly deliver to such Holder a due bill or other appropriate instrument evidencing such Holder’s right to receive such additional shares (or other property, as applicable), and such cash, upon (and subject to) the consummation of such event (or completion of such calculation).
(g)Statement Regarding Adjustments. Whenever the Warrant Exercise Price or the Warrant Shares into which this Warrant is exercisable shall be adjusted as provided in this Section 4, the Company

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shall, within 10 Business Days thereafter, send a written notice to Holder, including a statement showing in reasonable detail the facts requiring such adjustment and the Warrant Exercise Price that shall be in effect and the Warrant Shares into which this Warrant shall be exercisable after such adjustment.
(h)Adjustment Rules. Any adjustments pursuant to this Section 4 shall be made successively whenever an event referred to herein shall occur. If an adjustment in Warrant Exercise Price made hereunder would reduce the Warrant Exercise Price to an amount below par value of the Common Stock, then such adjustment in Warrant Exercise Price made hereunder shall reduce the Warrant Exercise Price to the par value of the Common Stock.
(i)Proceedings Prior to any Action Requiring Adjustment. As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 4, the Company shall take such actions as are necessary, which may include obtaining regulatory, stock exchange or stockholder approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all shares of Common Stock that the Holder is entitled to receive upon exercise of this Warrant pursuant to this Section 4.
5.Taxes.
(a)Withholding. The Company and its paying agent shall be entitled to deduct and withhold taxes on all payments and distributions (or deemed distributions) with respect to the Warrants (or upon the exercise thereof) to the extent required by applicable law. If the Company or its paying agent determine that such deduction or withholding is required pursuant to applicable law, it shall notify the Holder of such determination at least 5 days prior to making such deduction or withholding, and the Company agrees to cooperate with the Holder in order to minimize or avoid the withholding to the maximum extent permitted by applicable law. To the extent that any amounts are so deducted or withheld and timely remitted to the appropriate governmental authority, such deducted or withheld amounts shall be treated for all purposes of this Warrant as having been paid to the Person in respect of which such deduction or withholding was made. In the event the Company previously remitted any amounts to a governmental authority on account of taxes required to be deducted or withheld in respect of any payment or distribution (or deemed distribution) with respect to a Warrant or upon the exercise thereof, the Company shall be entitled (i) to offset any such amounts against any amounts otherwise payable in respect of such Warrant, any Warrant Shares otherwise required to be issued upon the exercise of such Warrant or any amounts otherwise payable in respect of Warrant Shares received upon the exercise of such Warrant, or (ii) to require the Person in respect of whom such deduction or withholding was made to reimburse the Company for such amounts (and such Person shall promptly so reimburse the Company upon demand).
(b)Transfer Taxes. The Company shall pay any and all documentary, stamp and similar issue or transfer tax (“Transfer Taxes”) due on (x) the issue of Warrants and (y) the issue of Warrant Shares pursuant to the exercise of a Warrant. However, in the case of the exercise of a Warrant, the Company shall not be required to pay any Transfer Tax that may be payable in respect of the issue or delivery (or any transfer involved in the issue or delivery) of Warrant Shares to a beneficial owner other than the beneficial owner of the Warrant immediately prior to such exercise, and no such issue or delivery shall be made unless and until the person requesting such issue or delivery has paid to the Company the amount of any such Transfer Tax or has established to the satisfaction of the Company that such Transfer Tax has been paid or is not payable.
6.Frustration of Purpose. The Company shall not, by amendment of its certificate of incorporation or bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of

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the terms to be observed or performed by it hereunder, but shall at all times in good faith cooperate in the carrying out of all the provisions of this Warrant.
7.Definitions. For the purposes of this Warrant, the following terms have the following meanings:
Act” has the meaning specified under the legend hereto.
Action” has the meaning specified under the Investment Agreement.
Affiliate” has the meaning specified under the Investment Agreement.
Business Combination” means a merger, consolidation, statutory share exchange, reorganization, recapitalization or similar extraordinary transaction (which may include a reclassification) involving the Company.
Business Day” has the meaning specified under the Investment Agreement.
Capital Stock” of any Person means any and all shares, interests, participations or other equivalents (however designated) of capital stock of such Person and all warrants or options to acquire such capital stock.
Certificate of Incorporation” means the Second Amended and Restated Certificate of Incorporation of the Company, as heretofore amended and as in effect on the Closing Date, and as it may subsequently be amended, modified, supplemented or restated from time to time in accordance with its terms and pursuant to applicable law.
Closing Date” has the meaning specified under the Investment Agreement.
Common Stock” means the Class A common stock, par value $0.0001 per share, of the Company.
Company” has the meaning specified in the preamble hereof.
Distribution Fair Market Value” means, with respect to any security or other property, the fair market value of such security or other property as determined by the Board of Directors of the Company based on the advice of a nationally recognized independent investment banking firm retained by the Company for this purpose, evidenced by a certified resolution of the fair market value from the Board of Directors of the Company delivered as promptly as practicable to the Holder; provided, that in the event that the Company shall set a record date for any distribution by the Company on shares of Common Stock of property or securities, other than securities of the Company, which become publicly traded upon completion of the distribution, then the Distribution Fair Market Value of such securities shall be the average of the closing prices of such security as quoted on the principal exchange or market on which such security is listed, on the five Trading Days following the effective date of such distribution. For the avoidance of doubt, the Distribution Fair Market Value of cash shall be the amount of such cash.
Exchange Act” means the Securities Exchange Act of 1934, as amended.
Fundamental Change” means: (1) a merger, reorganization, consolidation or other business combination of the Company with or into any other corporation or corporations or other business entity or entities (unless the stockholders of the Company immediately prior to such merger, reorganization or consolidation hold immediately after such merger, reorganization or consolidation at least 50% of the total voting power of the surviving corporation or business entity (or if the surviving or resulting corporation is

10


a Wholly Owned Subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation)); or (2) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, except where such sale, conveyance, exchange or transfer is to one or more Wholly Owned Subsidiaries of the Company.
Holder” means the Person or Persons who shall from time to time own this Warrant.
HSR Act” has the meaning specified under the Investment Agreement.
Individual Holder Share Cap” means, with respect to any Holder, the maximum number of shares of Common Stock or total voting power of the Company’s voting securities that could be beneficially owned by such Holder, or a “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) that includes such Holder, equal to 48.9%, with such specified percentage subject to change or removal from time to time by written notice by such holder to the Company in such holder’s sole discretion; provided, however, that any increase in such holder’s Individual Holder Share Cap will not be effective before the sixty-first (61st) day after such written notice is delivered to the Company. For these purposes, beneficial ownership and calculations of percentage ownership or voting power will be determined in accordance with Rule 13d-3 under the Exchange Act.
Market Disruption Event” means, with respect to the Common Stock or any other security, (i) a failure by the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted to open for trading during its regular trading session or (ii) the occurrence or existence for more than one-half hour period in the aggregate on any Scheduled Trading Day for Common Stock or such other security of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted or otherwise) of the Common Stock or such other security or in any options contracts or future contracts relating to the Common Stock or such other security, and such suspension or limitation occurs or exists at any time before 1:00 p.m., New York City time, on such day.
Market Price” means, with respect to the Common Stock or any other security, on any given day, the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, of the shares of the Common Stock or of such security, as applicable, on the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted.
NYSE” means the New York Stock Exchange.
Person” means an individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization or any other entity.
Pro Rata Repurchase” means any purchase of shares of Common Stock by the Company or any Affiliate thereof pursuant to any tender offer or exchange offer subject to Section 13(e) of the Exchange Act, in each case whether for cash, shares of capital stock of the Company, other securities of the Company, evidences of indebtedness of the Company or any other Person or any other property, or any combination thereof, effected while this Warrant is outstanding; provided, however, that a Pro Rata Repurchase shall exclude any purchase of shares by the Company or any Affiliate thereof made in accordance with the requirements of Rule 10b-18 as in effect under the Exchange Act. The “Effective Date” of a Pro Rata Repurchase shall mean the date of acceptance of shares for purchase or exchange under any tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any Pro Rata Repurchase that is not a tender or exchange offer.


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Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted. If the Common Stock is not listed on any U.S. national securities exchange, Scheduled Trading Day means a Business Day.
Subsidiary” of any Person means any corporation, association, partnership or other business entity of which more than fifty percent (50%) of the total voting power of the shares, interests, participations or other equivalents (however designated) of Capital Stock ordinarily entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, trustees or other voting members of the governing body thereof is at the time owned or controlled, directly or indirectly, by (a) such Person, (b) such Person and one or more Subsidiaries of such Person or (c) one or more Subsidiaries of such Person.
Term” has the meaning specified in Section 1 hereof.
Trading Day” means a day on which (i) there is no Market Disruption Event, (ii) trading in the Common Stock generally occurs on the principal exchange or market on which the Common Stock or such security, as applicable, is so listed or quoted, and (iii) the Market Price for the Common Stock is available on such securities exchange or market; provided that if the Common Stock is not so listed or traded, “Trading Day” means a Business Day.
VWAP” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “OWLT <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock) on such Trading Day reasonably determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company. The VWAP shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.
Warrant” means this Amended and Restated Warrant and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(d) hereof.
Warrant Exercise Price” means $4.6620, subject to adjustment as set forth herein.
Warrant Share Number” means 5,300,291.4, subject to adjustment as set forth herein.
Warrant Shares” means shares of Common Stock issuable upon exercise of this Warrant.
Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%.”
8.Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Company and the Holder.
9.Governing Law; Jurisdiction; Specific Performance. This Warrant shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would

12


cause the application of laws of any jurisdiction other than those of the State of Delaware. All Actions arising out of or relating to this Warrant shall be heard and determined in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any Action, any state or federal court within the State of Delaware) and the parties hereto hereby irrevocably submit to the exclusive jurisdiction and venue of such courts in any such Action and irrevocably waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such Action. The consents to jurisdiction and venue set forth in this Section 9 shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this paragraph and shall not be deemed to confer rights on any Person other than the parties hereto. Each party hereto agrees that service of process upon such party in any Action arising out of or relating to this Warrant shall be effective if notice is given by overnight courier at the address set forth in Section 10 of this Warrant. The parties hereto agree that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law; provided, however, that nothing in the foregoing shall restrict any party’s rights to seek any post-judgment relief regarding, or any appeal from, a final trial court judgment. The parties hereto agree that irreparable damage for which monetary relief, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Warrant in accordance with its specified terms or otherwise breach such provisions. Accordingly, the parties acknowledge and agree that the parties shall be entitled to seek an injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Warrant and to enforce specifically the terms and provisions hereof in the courts without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Warrant, and this right of specific enforcement is an integral part of the terms of this Warrant. The parties agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, and agree not to assert that a remedy of monetary damages would provide an adequate remedy or that the parties otherwise have an adequate remedy at law. The parties acknowledge and agree that any party shall not be required to provide any bond or other security in connection with its pursuit of an injunction or injunctions to prevent breaches of this Warrant and to enforce specifically the terms and provisions hereof.
10.Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next Business Day, (c) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) Business Day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next Business Day delivery, with written verification of receipt, to the parties at the following addresses (or at such other address for a party hereto as shall be specified in a notice given in accordance with this Section 10):
(a)If to the Company:
Owlet, Inc.
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84042
Attn: Chief Legal Officer
Email: legal@owletcare.com
with a copy to (which copy alone shall not constitute notice):
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, CA 92626-1925
Attn: Drew Capurro
Email: Drew.Capurro@lw.com



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(b) if to the Holder, as set forth on the Holder’s signature page hereto.
11.Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the Company and the Holder and their respective successors and permitted assigns (subject to Section 2(f) with respect to the Holder).
12.Modification and Severability. The provisions of this Warrant will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of any other provision hereof. To the fullest extent permitted by law, if any provision of this Warrant, or the application thereof to any Person or circumstance, is invalid or unenforceable (a) a suitable and equitable provision will be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Warrant and the application of such provision to other Persons, entities or circumstances will not be affected by such invalidity or unenforceability.
13.Interpretation.
(a)When a reference is made in this Warrant to a Section, such reference shall be to a Section of this Warrant unless otherwise indicated. The headings contained in this Warrant are for reference purposes only and shall not affect in any way the meaning or interpretation of this Warrant. Whenever the words “include,” “includes” or “including” are used in this Warrant, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Warrant shall refer to this Warrant as a whole and not to any particular provision of this Warrant unless the context requires otherwise. The words “date hereof” when used in this Warrant shall refer to the date of this Warrant. The terms “or,” “any” and “either” are not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” All terms defined in this Warrant shall have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Warrant are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Unless otherwise specifically indicated, all references to “dollars” or “$” shall refer to the lawful money of the United States. References to a Person are also to its permitted assigns and successors. When calculating the period of time between which, within which or following which any act is to be done or step taken pursuant to this Warrant, the date that is the reference date in calculating such period shall be excluded (unless otherwise required by law, if the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day).
[Signature pages follow]

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IN WITNESS WHEREOF, the Company has duly executed this Warrant as of the first date written above.

OWLET, INC.
By:/s/ Kurt Workman
Name:Kurt Workman
Title:Chief Executive Officer



[Signature Page to Warrant]


Agreed and Acknowledged:
Eclipse Early Growth Fund I, L.P.
By:/s/ Greg Lyon
Name:Greg Lyon
Title:Authorized Signatory
Notice information per Section 10:
Address: 514 High Street, Suite 4, Palo Alto, California 94301
Email: greg@eclipse.vc






[Signature Page to Warrant]
Exhibit 10.1


INVESTMENT AGREEMENT
by and among
OWLET, INC.
and
THE INVESTORS LISTED IN SCHEDULE 1
Dated as of February 25, 2024





TABLE OF CONTENTS
Page
i




Schedules and Exhibits
Schedule 1: Schedule of Purchasers
Exhibit A: Form of Certificate of Designation
Exhibit B: Form of Warrant
Exhibit C: Form of Joinder Agreement

ii



INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT (this “Agreement”), dated as of February 25, 2024 by and among Owlet, Inc., a Delaware corporation (the “Company”), and the several Purchasers listed on Schedule 1 hereto (together with their successors and permitted assigns, each a “Purchaser” and, collectively, the “Purchasers”). Capitalized terms not otherwise defined where used shall have the meanings ascribed thereto in Article 1.
WHEREAS, each Purchaser desires to purchase from the Company, and the Company desires to issue and sell to each such Purchaser, (a) an aggregate number of shares (the “Preferred Shares”) of the Company’s Series B Preferred Stock, par value $0.0001 per share (referred to herein as the “Series B Preferred Stock”), having the designations, powers, preferences, rights, qualifications, limitations and restrictions, as specified in the form of Certificate of Designation of Series B Convertible Preferred Stock attached hereto as Exhibit A (the “Certificate of Designation”) and (b) warrants substantially in the form attached hereto as Exhibit B (the “Warrants”) to purchase an aggregate number of shares of Company Common Stock (as defined below), in each case, in the amounts set forth opposite such Purchaser’s name on Schedule 1, and to be issued in accordance with the terms and conditions of the Certificate of Designation, the Warrants and this Agreement;
WHEREAS, the Company and each Purchaser desire to enter into certain agreements set forth herein; and
WHEREAS, prior to the execution hereof, the Board of Directors (as defined below) or an authorized committee thereof approved and authorized the execution and delivery of this Agreement and the other Transaction Agreements (as defined below) and the consummation of the Transactions (as defined below);
NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements herein contained and intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE 1DEFINITIONS
Section 1.01Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:
Action” shall have the meaning set forth in Section 4.07(a).
Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer of the Company or the Board of Directors, after consultation with counsel to the Company, (i) would be required to be made in any registration statement or prospectus in order for the applicable registration statement or prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the registration



statement were not being filed, declared effective or used, as the case may be, and (iii) the Company has a bona fide business purpose for not making such information public.
Affiliate” shall mean, with respect to any Person, any other Person which directly or indirectly controls or is controlled by or is under common control with such Person. Notwithstanding the foregoing, with respect to each Purchaser (a) the Company and the Company’s Subsidiaries shall not be considered Affiliates of such Purchaser or any of such Purchaser’s Affiliates and (b) no portfolio company of a Purchaser or its Affiliates shall be deemed an Affiliate of such Purchaser and its other Affiliates so long as such portfolio company has not been directed, encouraged, instructed, assisted or advised by, or coordinated with, such Purchaser or any of its Affiliates in carrying out any act contemplated or prohibited by this Agreement. As used in this definition, “control” (including its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise). For the avoidance of doubt, Trilogy Equity Partners, LLC, John Stanton and Terry Gillespie, TIC, Samuel Thomsen Trust No. 2, and Peter Thomsen Trust No. 2 (collectively, the “Trilogy Entities”) shall be deemed to be Affiliates of each other.
Agreement” shall have the meaning set forth in the preamble hereto.
Anti-Money Laundering Laws” shall have the meaning set forth in Section 3.01(n)(ii).
Board of Directors” shall mean the board of directors of the Company.
Breach” shall have the meaning set forth in Section 3.01(r).
Business Day” shall mean any day, other than a Saturday, Sunday or a day on which banking institutions in the City of New York, New York are authorized or obligated by law or executive order to remain closed.
Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity, including, without limitation any common stock or preferred stock of such entity.
Certificate of Designation” shall have the meaning set forth in the preamble hereto.
Closing” shall have the meaning set forth in Section 2.02.
Closing Date” shall have the meaning set forth in Section 2.02.
Code” shall have the meaning set forth in Section 4.08.
Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Company Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at
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any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Company Common Stock.
Company” shall have the meaning set forth in the preamble hereto.
Company Common Stock” shall mean the Class A common stock, par value $0.0001 per share, of the Company.
Company Owned Intellectual Property Rights” shall have the meaning set forth in Section 3.01(o).
Company Reports” shall have the meaning set forth in Section 3.01(g)(i).
Counsel Expenses” shall have the meaning set forth in Section 4.11.
Data Security Obligations” shall have the meaning set forth in Section 3.01(q).
Eclipse” means Eclipse Early Growth Fund I, L.P.
Enforceability Exceptions” shall have the meaning set forth in Section 3.01(c).
Environmental Laws” shall have the meaning set forth in Section 3.01(s).
Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended.
FDA” shall mean the U.S. Food and Drug Administration, or any successor agency thereto.
FDA Law” shall mean all laws applicable to the operation of the Company’s business related to the research, investigation, development, production, marketing, distribution, storage, shipping, transport, advertising, labeling, promotion, sale, export, import, use, handling and control, safety, efficacy, reliability or manufacturing of medical devices, including (a) the Federal Food, Drug, and Cosmetic Act of 1938 (21 U.S.C. 301 et. seq.); (b) the rules and regulations promulgated and enforced by FDA thereunder, including, as applicable, those requirements relating to the FDA’s Quality System Regulation contained in 21 C.F.R. Part 820, investigational use, premarket notification and premarket approval and applications to market new medical devices; (c) laws governing the conduct of non-clinical laboratory studies, including FDA’s Good Laboratory Practices regulations contained in 21 C.F.R. Part 58; (d) laws governing the development, conduct, performance, monitoring, subject informed consent, auditing, recording, analysis and reporting of clinical trials, including FDA’s Good Clinical Practice regulations contained in 21 C.F.R. Parts 11, 50, 54, 56 and 812; (e) laws governing data-gathering activities relating to the detection, assessment, and understanding of adverse events (including adverse event and malfunction reporting under 21 C.F.R. Part 803) and (f) all comparable state, federal or foreign laws relating to any of the foregoing.
Fully Subscribing Major Investor” shall have the meaning set forth in Section 4.12(b).
GAAP” shall mean U.S. generally accepted accounting principles.
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Government Official” shall have the meaning set forth in Section 3.01(n)(i).
Governmental Entity” shall mean any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization.
HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
Indemnification Notice” shall have the meaning set forth in Section 4.07(b).
Indemnitee” shall have the meaning set forth in Section 4.07(a).
Intellectual Property Rights” shall have the meaning set forth in Section 3.01(o).
Investor Parties” shall mean each Purchaser and each transferee of each Purchaser to whom shares of Series B Preferred Stock or Company Common Stock are transferred.
IRS” shall mean the U.S. Internal Revenue Service.
IT Systems and Data” shall have the meaning set forth in Section 3.01(r).
Joinder” shall mean, with respect to any Person permitted to sign such document in accordance with the terms hereof, a joinder executed and delivered by such Person, providing such Person to have all the rights and obligations of a Purchaser under this Agreement, in form and substance substantially as attached hereto as Exhibit C or such other form as may be agreed to by the Company and a Purchaser.
Losses” shall have the meaning set forth in Section 4.07(a).
Major Investor” shall mean each Investor Party and its Affiliates and Related Funds that collectively initially held 3,000 shares of Series B Preferred Stock for so long as such Investor Party collectively with its Affiliates and Related Funds continues to hold or beneficially own at least 3,000 shares of Series B Preferred Stock.
Material Adverse Effect” shall mean any events, changes or developments that, individually or in the aggregate:
(i)    have a material adverse effect on the business, financial condition or results of operations of the Company and its Subsidiaries, taken as a whole, other than any event, change or development resulting from or arising out of the following:
(a)    events, changes or developments generally affecting the economy, the financial or securities markets, or political, legislative or regulatory conditions, in each case in the United States or elsewhere in the world;
(b)    events, changes or developments in the industries in which the Company or any Company Subsidiary conducts its business;
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(c)    any adoption, implementation, promulgation, repeal, modification, reinterpretation or proposal of any rule, regulation, ordinance, order, protocol or any other law of or by any national, regional, state or local Governmental Entity, or market administrator;
(d)    any changes in GAAP or accounting standards or interpretations thereof;
(e)    epidemics, pandemics, earthquakes, any weather-related or other force majeure event or natural disasters or outbreak or escalation of hostilities or acts of war or terrorism or cyberattacks;
(f)    the announcement or the existence of, compliance with or performance under, this Agreement or the transactions contemplated hereby;
(g)    any taking of any action at the request of any Purchaser under this Agreement;
(h)    any failure by the Company to meet any financial projections or forecasts or estimates of revenues, earnings or other financial metrics for any period (provided that the exception in this clause (h) shall not prevent or otherwise affect a determination that any event, change, effect or development underlying such failure has resulted in a Material Adverse Effect so long as it is not otherwise excluded by this definition); or
(i)    any changes in the share price or trading volume of the Company Common Stock or in the Company’s credit rating (provided that the exception in this clause (i) shall not prevent or otherwise affect a determination that any event, change, effect or development underlying such change has resulted in a Material Adverse Effect so long as it is not otherwise excluded by this definition); except, in each case with respect to subclauses (a) through (e), to the extent that such event, change or development disproportionately affects the Company and its Subsidiaries, taken as a whole, relative to other similarly situated companies in the industries in which the Company and its Subsidiaries operate; or
(ii)     materially and adversely affect or delay the Company’s power or ability to consummate the Transactions or perform its obligations under the Transaction Agreements.
New Securities” shall have the meaning set forth in Section 4.12(a).
NYSE” shall mean The New York Stock Exchange.
Offer Notice” shall have the meaning set forth in Section 4.12(a).
Person” or “person” shall mean an individual, corporation, limited liability or unlimited liability company, association, partnership, trust, estate, joint venture, business trust or
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unincorporated organization, or a government or any agency or political subdivision thereof, or other entity of any kind or nature.
Personal Data” shall have the meaning set forth in Section 3.01(q).
Preemptive Securities” shall mean (a) with respect to the Company, shares of Company Common Stock, preferred stock or any other class or series of Capital Stock of the Company, (b) any warrants, options, rights or other securities exchangeable or exercisable for, or convertible into, any Preemptive Securities described in clause (a), and (c) any indebtedness instrument for borrowed money (whether in the form of notes or loans) issued by the Company and exchangeable or exercisable for, or convertible into, any Preemptive Securities described in the foregoing clauses (a) and (b).
Preferred Shares” shall have the meaning set forth in the preamble hereto.
Preferred Stock” shall mean the Series A Preferred Stock and the Series B Preferred Stock, collectively.
Prior Investment Agreement” shall mean, collectively, the Investment Agreements, dated as of February 17, 2023, by and between the Company and those certain investors listed on Schedule 1 thereto.
Pro Rata Percentage” means a fraction equal to (a) the number of outstanding shares of Company Common Stock plus the number of shares of Company Common Stock underlying the shares of Preferred Stock on an as-converted basis, in each case held by the Major Investor collectively with its Affiliates divided by (b) the number of outstanding shares of Company Common Stock plus the number of shares of Company Common Stock underlying all outstanding shares of Preferred Stock on an as-converted basis.
Purchase Notice” shall have the meaning set forth in Section 4.12(b).
Purchase Price” shall have the meaning set forth in Section 2.01.
Purchaser” shall have the meaning set forth in the preamble hereto.
Purchaser Affiliates” means, collectively and individually, the Affiliates of each Purchaser.
Quality System Regulation” shall mean the Quality System Regulation under 21 C.F.R. Part 820.
Registration Rights Agreement” shall mean that certain Amended and Restated Registration Rights Agreement, dated as of July 15, 2021, by and among the Company and the parties named therein.
Registration Statement” shall mean any registration statement of the Company filed or to be filed with the SEC under the rules and regulations promulgated under the Securities Act, including the related prospectus, amendments and supplements to such registration statement,
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and including pre- and post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement.
Regulatory Approval Condition” shall mean the Investor Parties or any of their Affiliates is required to wait for the expiration of any waiting period under, file any notice, report or other submission with, or obtain any consent, registration, approval, permit or authorization from any governmental entity under any applicable law in connection with such transaction, including under (a) any U.S. or non-U.S. competition, merger control, antitrust or similar law, (b) any law that may be applicable to the direct or indirect ownership of equity in the Company and its Subsidiaries or (c) any law related to the foregoing.
Related Fund” means, with respect to a Purchaser, any Affiliates (including at the institutional level) of such Purchaser or any special purpose investment vehicles, investment accounts or funds managed, advised or sub-advised by such Purchaser, an Affiliate of such Purchaser or by the same investment manager, advisor or sub-advisor as such Purchaser or an Affiliate of such Purchaser.
Rule 144” shall mean Rule 144 promulgated by the SEC pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such rule.
Sanctions” shall have the meaning set forth in Section 3.01(n)(iii)(A).
SEC” shall mean the U.S. Securities and Exchange Commission.
Securities” shall have the meaning set forth in Section 2.01.
Securities Act” shall mean the U.S. Securities Act of 1933, as amended.
Series A Preferred Stock” shall mean the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share.
Series B Preferred Stock” shall have the meaning set forth in the preamble hereto.
Shelf Registration Statement” shall have the meaning set forth in Section 4.10.
“SLAP” shall mean a supplemental listing application in accordance with the rules of the NYSE.
Subsidiary” shall mean, with respect to any Person, any other Person of which 50% or more of the shares of the voting securities or other voting interests are owned or controlled, or the ability to select or elect 50% or more of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries, or by such first Person, or by such first Person and one or more of its Subsidiaries.
“Suspension Event” shall have the meaning set forth in Section 4.10(b).
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Tax” or “Taxes” shall mean all U.S. or non-U.S. federal, state, and local income, excise, gross receipts, gross income, ad valorem, profits, gains, property, capital, sales, transfer, use, payroll, employment, severance, withholding, duties, intangibles, franchise, backup withholding, value-added, and other taxes imposed by a Governmental Entity, together with all interest, penalties and additions to tax imposed with respect thereto, whether disputed or not.
Tax Return” shall mean a report, return, schedule, statement, or other document (including any amendments thereto) required to be supplied to a Governmental Entity with respect to Taxes.
Transaction Agreements” shall have the meaning set forth in Section 3.01(c).
Transactions” shall have the meaning set forth in Section 3.01(c).
U.S. Treasury Regulations” shall mean the regulations promulgated under the Code by the U.S. Department of the Treasury.
Undersubscribed New Securities” shall have the meaning set forth in Section 4.12(b).
Undersubscribing Major Investor” shall have the meaning set forth in Section 4.12(b).
Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Company Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Company Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Company Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.
Warrants” shall have the meaning set forth in the preamble hereto.
Section 1.02General Interpretive Principles. Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. The name assigned to this Agreement and the section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Unless otherwise specified, the terms “hereto,” “hereof,” “herein” and similar terms refer to this Agreement as a whole (including the exhibits, schedules and disclosure statements hereto), references to “the date hereof” refer to the date of this Agreement and references herein to Articles or Sections refer to Articles or Sections of this Agreement. References to any law or statute shall be deemed to refer to such law or statute as amended from time to time and, if applicable, to any rules or regulations
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promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.
ARTICLE 2     SALE AND PURCHASE OF THE SECURITIES
Section 2.01    Sale and Purchase of the Securities. Subject to the terms and conditions of this Agreement, the Company shall issue and sell to each Purchaser, severally and not jointly, and each such Purchaser shall purchase and acquire from the Company at the Closing, (i) an aggregate number of Preferred Shares and (ii) Warrants to purchase an aggregate number of shares of Company Common Stock (such Preferred Shares and Warrants, together, the “Securities”), in each case as listed opposite such Purchaser’s name on Schedule 1 hereto for the purchase price set forth opposite such Purchaser’s name on Schedule 1 attached hereto (such price, the “Purchase Price”).
Section 2.02    The Closing.
(a)Subject to the satisfaction or waiver of the conditions for the Closing set forth in this Section 2.02, the Closing (the “Closing”) of the purchase and sale of the Securities hereunder shall take place remotely via the electronic exchange of documents and signatures at 10:00 a.m. Eastern time on February 28, 2024, or at such other place, time or date as may be mutually agreed upon in writing by the Company and the Purchasers (the date on which the Closing actually occurs, the “Closing Date”).
(b)To effect the purchase and sale of the Securities, upon the terms and subject to the conditions set forth in this Agreement, at or before the Closing the Company shall:
(i)duly file, or cause to be duly filed, the Certificate of Designation with the Secretary of State of the State of Delaware and deliver a certified copy of the Certificate of Designation that was duly filed with the Secretary of State of the State of Delaware to each Purchaser; and
(ii)deliver or cause to be delivered to each Purchaser:
(A)evidence of issuance of the Preferred Shares to such Purchaser in a form reasonably acceptable to such Purchaser, credited to book-entry accounts maintained by the transfer agent of the Company, free and clear of any liens, other than transfer restrictions under this Agreement, the Certificate of Designation and applicable federal and state securities laws and those created by such Purchaser;
(B)duly executed counterpart signature pages to the warrant certificates representing the Warrants issued to such Purchaser duly executed by the Company;
(C)the certificate contemplated by Section 2.02(e)(iii); and
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(D)any other customary documents or certificates reasonably requested by the Purchasers which are reasonably necessary to give effect to the Closing.
(c)To effect the purchase and sale of the Securities, upon the terms and subject to the conditions set forth in this Agreement, at or before the Closing each Purchaser shall:
(i)cause a wire transfer to be made in same day funds to an account of the Company designated in writing by the Company to the Purchasers in an amount equal to the Purchase Price for the applicable Securities;
(ii)deliver or cause to be delivered to the Company a duly completed and executed IRS Form W-9 or applicable IRS Form W-8, as applicable; and
(iii)deliver or cause to be delivered to the Company a duly executed counterpart signature page to the warrant certificate representing the Warrants issued such Purchaser.
(d)The obligations of the Company and each Purchaser to consummate the Closing are subject to the satisfaction or waiver of the following conditions:
(i)no statute, rule, order, decree or regulation shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Entity which temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the Closing.
(e)The obligations of each Purchaser to consummate the Closing are subject to the satisfaction or waiver of the following conditions:
(i)the representations and warranties of the Company set forth in Section 3.01 shall be true and correct on the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date);
(ii)the Company shall have performed and complied in all material respects with all agreements and obligations required by this Agreement to be performed or complied with by it on or prior to the Closing and shall have delivered to each Purchaser all instruments, agreements and other items required to be delivered by the Company at or prior to the Closing;
(iii)each Purchaser shall have received a certificate, dated the Closing Date, duly executed by an executive officer of the Company on behalf of the Company, certifying that the conditions specified in Section 2.02(e)(i) and Section 2.02(e)(ii) have been satisfied;
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(iv)the expense reimbursement contemplated by Section 4.11 shall have been satisfied (which shall be substantially simultaneous with the Closing); and
(v)(A) the Company shall have filed with the NYSE a SLAP for the listing of the shares of Company Common Stock issuable upon conversion or exercise of such Securities and (B) the NYSE shall have approved such SLAP subject to notice of issuance.
(f)The obligations of the Company to sell and issue the Securities to each Purchaser are subject to the satisfaction or waiver of the following conditions as of the Closing:
(i)the representations and warranties of such Purchaser set forth in Section 3.02 shall be true and correct on the Closing Date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date); and
(ii)such Purchaser shall have performed and complied in all material respects with all agreements and obligations required by this Agreement to be performed or complied with by it on or prior to the Closing Date.
Section 2.03    Termination.
(a)This Agreement may be terminated before the Closing:
(i)by mutual written agreement of the Company and each Purchaser (solely with respect to itself);
(ii)by either the Company or a Purchaser (solely with respect to itself), if:
(A)the Closing has not been consummated on or before the tenth (10th) Business Day following the date of this Agreement (the “End Date”); provided that the right to terminate this Agreement pursuant to this Section 2.03(a)(ii) shall not be available to any party whose breach of any provision of this Agreement results in the failure of the Closing to be consummated by such time; or
(B)the Closing shall have been (1) prohibited by law or (2) enjoined by any governmental authority of competent jurisdiction, and such injunction shall have become final and nonappealable.
(iii)by a Purchaser (solely with respect to itself), if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause the conditions set forth in Section 2.02(e)(i) and Section 2.02(e)(ii) not to be satisfied, and such conditions are incapable of being satisfied by the End Date; or
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(iv)by the Company, if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of any Purchaser set forth in this Agreement shall have occurred that would cause the conditions set forth in Section 2.02(f)(i) and Section 2.02(f)(ii) not to be satisfied, and such conditions are incapable of being satisfied by the End Date.
(b)If this Agreement is terminated pursuant to Section 2.03(a), this Agreement shall become void and of no effect without liability of any party (or any stockholder, director, officer, employee, agent, consultant or representative of such party) to the other party hereto; provided that, if such termination shall result from the intentional (i) failure of either party to fulfill a condition to the performance of the obligations of the other party or (ii) failure of either party to perform a covenant hereof, such party shall be fully liable for any and all liabilities and damages incurred or suffered by the other party as a result of such failure. The provisions of this Section 2.03, Section 4.11, Section 4.15 and Article 5 shall survive any termination hereof.
ARTICLE 3     REPRESENTATIONS AND WARRANTIES
Section 3.01    Representations and Warranties of the Company. Except as disclosed in the Company Reports filed with or furnished to the SEC and publicly available prior to the date hereof (excluding in each case any disclosures set forth in the risk factors or “forward-looking statements” sections of such reports and any other disclosures included therein to the extent they are primarily predictive or forward-looking in nature), the Company represents and warrants to the Purchasers, as of the date hereof, as follows:
(a)Existence and Power.
(i)The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own or lease its property and to conduct its business as it is being conducted on the date of this Agreement, and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(ii)Each Company Subsidiary has been duly incorporated, organized or formed, is validly existing as a corporation or other business entity in good standing under the laws of the jurisdiction of its incorporation, organization or formation (to the extent that the concept of good standing is applicable in such jurisdiction), has the corporate or other business entity power and authority to own or lease its property and to conduct its business as it is being conducted on the date of this Agreement, and is duly qualified to transact business and is in good standing (to the extent that the concept of good standing is applicable in such jurisdiction) in each jurisdiction in which the conduct
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of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing (to the extent that the concept of good standing is applicable in such jurisdiction) would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect; all of the issued shares of Capital Stock or other equity interests of each Company Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims.
(b)Capitalization. The authorized share capital of the Company consists of 107,142,857 shares of Company Common Stock, par value $0.0001 per share, and 10,741,071 shares of preferred stock, par value $0.0001 per share. As of September 30, 2023, there were (i) 8,563,301 shares of Company Common Stock issued and outstanding, (ii) 30,000 shares of Series A Preferred Stock of the Company issued and outstanding, (iii) options to purchase an aggregate of 470,500 shares of Company Common Stock outstanding, (iv) 1,396,201 shares of Company Common Stock underlying the Company’s outstanding restricted stock unit awards and 71,428 shares of Company Common Stock underlying the Company’s outstanding performance restricted stock unit awards (in each case, assuming maximum vesting of such awards), (v) 27,533 shares committed to be purchased under the Company’s Employee Stock Purchase Program but not yet issued and (vi) warrants to purchase 9,175,282 shares of Company Common Stock issued and outstanding. Except as contemplated by this Agreement, since September 30, 2023, (A) the Company has only issued restricted stock unit awards or performance restricted stock unit awards or other rights to acquire shares of Company Common Stock in the ordinary course of business consistent with past practice and (B) the only shares of Capital Stock issued by the Company were pursuant to conversion of shares of Series A Preferred Stock and exercise of outstanding warrants, outstanding options, restricted stock unit awards, performance restricted stock unit awards and other compensatory rights to purchase shares of Company Common Stock granted to employees, directors or other service providers. All outstanding shares of Company Common Stock and Series A Preferred Stock are duly authorized, validly issued, fully paid and nonassessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right. Except as disclosed in the Company Reports filed with or furnished to the SEC, and as provided in this Section 3.01(b), the Certificate of Designation and the Warrants, there are no existing options, warrants, calls, preemptive (or similar) rights, subscriptions or other rights, agreements or commitments obligating the Company to issue, transfer or sell, or cause to be issued, transferred or sold, any Capital Stock of the Company or any securities convertible into or exchangeable for such Capital Stock and there are no current outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any of its shares of Capital Stock, except with respect to the acquisition of shares of Company Common Stock by the Company to satisfy the payment of the applicable exercise price or withholding taxes for equity awards. The Company has not declared or paid any dividends.
(c)Authorization. The execution, delivery and performance of this Agreement, the Certificate of Designation, the Warrants and any and all other agreements or instruments executed and delivered to the Purchaser by the Company hereunder or thereunder, as applicable (collectively, the “Transaction Agreements”) and the consummation of the transactions contemplated herein and therein (collectively, the “Transactions”) have been duly
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authorized by the Board of Directors and all other necessary corporate action on the part of the Company, and no other corporate actions on the part of the Company, including any vote of the stockholders of the Company to approve the Transactions, the issuance of the Securities and the issuance of the shares of Company Common Stock upon conversion or exercise of the Securities are necessary or required in connection with the Transactions. Assuming this Agreement constitutes the valid and binding obligation of each Purchaser, this Agreement is a valid and binding obligation of the Company, enforceable against it in accordance with its terms, subject to the limitation of such enforcement by (A) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium, fraudulent transfer, preference or other laws affecting or relating to creditors’ rights generally or (B) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law (the “Enforceability Exceptions”). On the Closing Date, the Warrants will be duly executed and delivered by the Company and, assuming due authorization, execution and delivery by the other parties thereto, will be a valid and binding obligation of the Company enforceable against it in accordance with its terms, subject to the Enforceability Exceptions. The Company has taken and will take all such steps as may be required to cause to qualify for exemption under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and be exempt for purposes of Section 16(b) under the Exchange Act, any acquisitions or dispositions of the Preferred Shares, the Warrants and the Company Common Stock issuable upon conversion of the Preferred Shares or exercise of the Warrants and any securities that may be deemed to be equity securities or derivative securities of the Company for such purposes in connection with the Transactions by Eclipse and the Trilogy Entities.
(d)General Solicitation; No Integration. Neither the Company nor any other Person or entity authorized by the Company to act on its behalf has engaged in a general solicitation or general advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to offers or sales of the Securities. The Company has not, directly or indirectly, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as defined in the Securities Act) which, to its knowledge, is or will be integrated with the Securities sold pursuant to this Agreement.
(e)Valid Issuance. The Securities have been duly authorized by all necessary corporate action of the Company. When issued and sold against receipt of the consideration therefor, (i) the Warrants will be valid and legally binding obligations of the Company, enforceable in accordance with their terms against the Company, subject to the limitation of such enforcement by the Enforceability Exceptions, and (ii) the Securities will be validly issued, fully paid and nonassessable, and shall be free and clear of all liens and restrictions on transfer, except for restrictions on transfer set forth in the Transaction Agreements or imposed by applicable securities laws. The Company has available and has reserved for issuance the maximum number of shares of Company Common Stock initially issuable (x) upon conversion of the Preferred Shares and (y) upon exercise of the Warrants, if such conversion or exercise were to occur immediately following Closing. The Company Common Stock to be issued upon conversion or exercise of the Securities in accordance with the terms thereof has been duly authorized and reserved for issuance, and when issued upon conversion or exercise of the Securities, all such Company Common Stock will be validly issued, fully paid and nonassessable and free of pre-emptive or similar rights.
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(f)Non-Contravention/No Consents. The execution, delivery and performance of the Transaction Agreements, the issuance of the shares of Company Common Stock upon conversion or exercise of the Securities in accordance with the terms thereof and the consummation by the Company of the Transactions, does not conflict with, violate or result in a breach of any provision of, or constitute a default under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, (i) the certificate of incorporation or bylaws of the Company, (ii) any mortgage, note, indenture, deed of trust, lease, license, loan agreement or other agreement binding upon the Company or any Company Subsidiary or (iii) any permit, license, judgment, order, decree, ruling, injunction, statute, law, ordinance, rule or regulation applicable to the Company or any Company Subsidiary other than in the cases of clauses (ii) and (iii) as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Assuming the accuracy of the representations of each Purchaser set forth herein, other than: (A) pursuant to any requirements or regulations in connection with the issuance of Company Common Stock upon the conversion or exercise of the Securities in accordance with the terms thereof, including the filing of a SLAP with NYSE or filings under state securities or “blue sky” laws; (B) any required filings pursuant to the Exchange Act or the rules of the SEC, NYSE or state regulators; or (C) as have been obtained prior to the date of this Agreement, no consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required on the part of the Company or any Company Subsidiary in connection with the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Transactions, except for any consent, approval, order, authorization, registration, declaration, filing, exemption or review the failure of which to be obtained or made, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. The consummation of the Transactions and the sale, conversion and exercise, as applicable, of all Securities issued and sold hereunder is not a “change of control,” and would not trigger any “change of control” or similar provision, in each case, under (i) any agreements among the Company or any of its Subsidiaries, on the one hand, and any officers, directors or other employees of the Company or any of its Subsidiaries, on the other hand, (ii) any severance plan, incentive plan or other equity incentive award issued or maintained by the Company or any of its Subsidiaries, (iii) any debt agreement or other terms of any indebtedness of the Company or any of its Subsidiaries or (iv) any other material agreement of the Company or any of its Subsidiaries, except for such provisions as have been properly waived by the applicable counterparty or by the Company or where the trigger of such provision would not, individually or in the aggregate, reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole.
(g)Reports; Financial Statements.
(i)The Company has filed or furnished with the SEC, as applicable, (A) its annual report on Form 10-K for its fiscal year ended December 31, 2022, (B) its quarterly reports on Form 10-Q for its fiscal quarters ended March 31, June 30 and September 30, 2023, (C) its definitive proxy statement relating to the annual meeting of the stockholders of the Company held in 2023, (D) all other forms, reports, schedules and other statements required to be filed or furnished by it with the SEC under the Exchange Act or the Securities Act since July 15, 2021 (collectively, the “Company Reports”). As of its respective date, and, if amended, as of the date of the last such
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amendment, each Company Report complied in all material respects as to form with the applicable requirements of the Securities Act and the Exchange Act, and any rules and regulations promulgated thereunder applicable to such Company Report. As of its respective date, and, if amended, as of the date of the last such amendment, no Company Report contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading.
(ii)Each of the consolidated balance sheets, and the related consolidated statements of operations, income, stockholders’ equity (deficit) and cash flows, included in the Company Reports filed with the SEC under the Exchange Act: (A) have been prepared from, and are in accordance with, the books and records of the Company and its Subsidiaries; (B) fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates shown and the results of the consolidated operations, changes in stockholders’ equity and cash flows of the Company and its consolidated Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth; (C) have been prepared in accordance with GAAP consistently applied during the periods involved, except as otherwise set forth therein or in the notes thereto; and (D) otherwise comply in all material respects with the requirements of the SEC.
(iii)Except as disclosed in Company Reports, the Company and its Subsidiaries have established and maintained a system of internal controls over financial reporting (as defined in Rule 13a-15 under the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of Company financial statements for external purposes in accordance with GAAP.
(iv)Except as disclosed in Company Reports and other than the transactions contemplated by this Agreement, there has been no transaction, or series of related transactions, agreements, arrangements or understandings, nor is there any proposed transaction, or series of related transactions, agreements, arrangements or understandings, that would be required to be disclosed under Item 404 of Regulation S-K promulgated by the SEC under the Securities Act that have not been disclosed in the Company Reports.
(h)Absence of Certain Changes. Since September 30, 2023, (i) the Company and its Subsidiaries have conducted their respective businesses in all material respects in the ordinary course of business; and (ii) no events, changes or developments have occurred that, individually or in the aggregate, have had or would reasonably be expected to have a Material Adverse Effect.
(i)No Undisclosed Liabilities, etc. As of the date hereof, there are no liabilities of the Company or any Company Subsidiary that would be required by GAAP to be reflected on the face of the balance sheet, except (i) liabilities reflected or reserved against in the financial statements or disclosed in the notes thereto contained in the Company Reports, (ii) liabilities incurred since September 30, 2023 in the ordinary course of business and (iii)
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liabilities that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(j)Compliance with Applicable Law. Each of the Company and its Subsidiaries has complied in all respects with, and is not in default or violation in any respect of, any law, statute, order, rule, regulation, policy or guideline of any federal, state or local or international Governmental Entity having jurisdiction or otherwise applicable to the Company and its Subsidiaries, other than as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.
(k)Legal Proceedings. There are no legal or governmental proceedings pending or, to the Company’s knowledge, threatened to which the Company or any Company Subsidiary is a party or to which any of the properties of the Company or any Company Subsidiary is subject that would (i) singly or in the aggregate, reasonably be expected to have a Material Adverse Effect or (ii) challenge the validity of or seek to prevent the Transactions.
(l)Demand Rights. Other than as set forth in the Registration Rights Agreement, the Prior Investment Agreement or this Agreement, there are no contracts, agreements or understandings between the Company and any Person granting such Person (i) the right to require the Company to file a Registration Statement under the Securities Act with respect to any securities of the Company that are not already registered as of the date hereof or (ii) preemptive rights to subscribe for the Company Common Stock issuable upon conversion or exercise of the Securities, except in each case of (i) and (ii), as have been duly waived.
(m)Real Property. The Company and the Company Subsidiaries do not own any real property. The Company and its Subsidiaries have good and marketable title to all personal property owned by them which is material to the business of the Company and the Company Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries; and any real property and buildings 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 would not be reasonably expected to materially interfere with the use made and proposed to be made of such property and buildings by the Company and each Company Subsidiary.
(n)Anti-Corruption, Anti-Money Laundering, and Economic Sanctions Compliance.
(i)(A) None of the Company or any Company Subsidiary, or, to the Company’s knowledge, any controlled affiliate, director, officer, employee, agent or representative of the Company or any Company Subsidiary or affiliate, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment, giving or receipt of money, property, gifts or anything else of value, directly or indirectly, to any government official (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political
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office) (“Government Official”) in order to influence official action, or to any person in violation of any applicable anti-corruption laws; (B) the Company and each Company Subsidiary and their respective affiliates have conducted their businesses in compliance with applicable anti-corruption laws and have instituted and maintained and will continue to maintain policies and procedures reasonably designed to promote and achieve compliance with such laws and with the representations and warranties contained herein; and (C) neither the Company nor any Company Subsidiary will use, directly or indirectly, the proceeds of the offering in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any person in violation of any applicable anti-corruption laws.
(ii)The operations of the Company and each Company Subsidiary are and have been conducted at all times in material compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of jurisdictions where the Company and each Company Subsidiary conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or Governmental Entity, authority or body or any arbitrator involving the Company or any Company Subsidiary with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(iii)None of the Company or any Company Subsidiary or, to the Company’s knowledge, any director, officer, employee, agent, controlled affiliate or representative of the Company or any Company Subsidiary, is a Person that is, or is owned or controlled by one or more Persons that are:
(A)the subject of any sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, His Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), or
(B)located, organized or resident in a country or territory that is the subject of Sanctions (as of the date of this Agreement, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria).
(iv)The Company will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person:
(A)to fund or facilitate 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
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(B)in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).
(v)The Company and each Company Subsidiary have not knowingly engaged in, are not now knowingly engaged in, and will not engage 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.
(o)Intellectual Property. Except to the extent it would not be reasonably expected to have a Material Adverse Effect: (i) the Company and each Company Subsidiary own or have a valid license to use any and all patents, inventions, copyrights, know how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, processes or procedures), trademarks, service marks, trade names, domain names, software, data and other worldwide intellectual property or similar proprietary rights, including any and all registrations and applications for registration thereof and any and all goodwill associated therewith (collectively, “Intellectual Property Rights”), in each case, used in or reasonably necessary to the conduct of their businesses as currently conducted; (ii) the Intellectual Property Rights owned or purported to be owned by the Company or any Company Subsidiary (the “Company Owned Intellectual Property Rights”), are solely and exclusively owned by the Company or the Company Subsidiaries, in each case free and clear of all liens, defects or similar encumbrances or other restrictions, other than non-exclusive licenses granted in the ordinary course of business, (iii) the Company Owned Intellectual Property Rights and, to the Company’s knowledge, the Intellectual Property Rights licensed to the Company or any Company Subsidiary, are valid, subsisting and enforceable, and there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by a third party (A) challenging the validity, scope or enforceability of any such Intellectual Property Rights or (B) alleging that the Company or any Company Subsidiary has infringed, misappropriated or violated any Intellectual Property Rights of any third party; (iv) neither the Company nor any Company Subsidiary has received any written notice alleging any infringement, misappropriation or other violation of Intellectual Property Rights; (v) to the Company’s knowledge, no third party is infringing, misappropriating or otherwise violating or has infringed, misappropriated or otherwise violated, any Company Owned Intellectual Property Rights; (vi) neither the Company nor any Company Subsidiary infringes, misappropriates or otherwise violates, or has infringed, misappropriated or otherwise violated, any Intellectual Property Rights; (vii) all employees or contractors engaged in the development of Intellectual Property Rights on behalf of the Company or any Company Subsidiary have executed an invention assignment agreement whereby such employees or contractors presently assign all of their right, title and interest in and to such Intellectual Property Rights to the Company or a Company Subsidiary, and to the Company’s knowledge no such agreement has been breached or violated; and (viii) the Company and the Company Subsidiaries use, and have used, commercially reasonable efforts to appropriately maintain the confidentiality of all information intended to be maintained as a trade secret (including proprietary confidential software source code).
(p)Open Source Software. Except to the extent it would not be reasonably expected to have a Material Adverse Effect, (i) the Company and the Company Subsidiaries use and have used any and all software and other materials distributed under a “free,” “open source,”
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or similar licensing model (including but not limited to the MIT License, Apache License, GNU General Public License, GNU Lesser General Public License and GNU Affero General Public License) (“Open Source Software”) in compliance with all license terms applicable to such Open Source Software; and (ii) neither the Company nor any Company Subsidiary uses or distributes or has used or distributed any Open Source Software in any manner that requires or has required (A) the Company or any Company Subsidiary to permit reverse engineering of any software code or other technology owned by the Company or any Company Subsidiary or (B) any software code or other technology owned by the Company or any Company Subsidiary to be (1) disclosed or distributed in source code form, (2) licensed for the purpose of making derivative works or (3) redistributed at no charge.
(q)Data Security; Privacy. The Company and each Company Subsidiary: (i) have complied and are presently in compliance in all material respects with all internal and external written privacy policies, contractual obligations, applicable laws, statutes, judgments, orders, rules and regulations of any court or arbitrator or other governmental or regulatory authority and any other applicable legal obligations, in each case, relating to the collection, use, transfer, import, export, storage, protection, disposal, disclosure or other processing by or on behalf of the Company or any Company Subsidiary of personal data, personal information, personally identifiable information, and any similar term as defined by applicable law (“Data Security Obligations”, and such data and information, “Personal Data”); (ii) maintain and have maintained commercially reasonable policies and procedures designed to ensure the Company’s, and the Company Subsidiaries’ compliance with the Data Security Obligations except to the extent it would not be reasonably expected to have a Material Adverse Effect, (iii) have not received any notification of or complaint regarding, and are unaware of any other facts that, individually or in the aggregate, would reasonably indicate non-compliance with any Data Security Obligation. There is no action, suit, investigation or proceeding by or before any court or Governmental Entity or authority pending or threatened in writing against the Company or any Company Subsidiary alleging non-compliance with any Data Security Obligation.
(r)Information Technology Systems and Data. Except to the extent it would not be reasonably expected to have a Material Adverse Effect, the information technology assets, equipment, computers, systems, networks, hardware, software, internet websites, applications, data and databases (including the Personal Data, the data of their respective customers, employees, suppliers, vendors and any other third party data maintained, processed or transmitted by or on behalf of the Company and the Company Subsidiaries) used by or on behalf of the Company and Company Subsidiaries (collectively, “IT Systems and Data”) are reasonably adequate for, and operate and perform as required in connection with, the operation of the businesses of the Company and the Company Subsidiaries as currently conducted, free and clear of all bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants. The Company and each Company Subsidiary take and have taken all reasonable technical and organizational measures necessary to protect the IT Systems and Data. Without limiting the foregoing, the Company and the Company Subsidiaries have used commercially reasonable efforts to establish and maintain, and have established, maintained, implemented and complied with, reasonable information technology, information security, cyber security and data protection controls, policies and procedures, including oversight, access controls, encryption, technological and physical safeguards and business continuity/disaster recovery and security plans, consistent with industry standards and practices, that are designed to protect against and prevent the breach,
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destruction, loss, unauthorized distribution, use, access, disablement, misappropriation or modification, or any other compromise or misuse, in each case, of or relating to any IT Systems and Data (“Breach”). There has been no Breach, and the Company and the Company Subsidiaries have not been notified of and have no knowledge of any event or condition that would reasonably be expected to result in, any Breach except as would not be reasonably expected to have a Material Adverse Effect.
(s)Environmental Laws.
(i)The Company and each Company Subsidiary (i) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(ii)There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(t)Labor Disputes. No material labor dispute with the employees of the Company or any Company Subsidiary exists, or, to the Company’s knowledge, is imminent; and the Company is not aware of any existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could, singly or in the aggregate, have a Material Adverse Effect.
(u)Investment Company Act. The Company is not, and immediately after receipt of payment for the Securities at the Closing and the transactions contemplated by the other Transaction Agreements, will not be, required to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(v)Regulatory Compliance.
(i)Since January 1, 2018, all products developed, tested, investigated, produced, manufactured, labeled, stored, promoted, marketed, imported, exported, distributed, or sold by or on behalf of the Company and its Subsidiaries have been, and are being, developed, tested, investigated, produced, manufactured, labeled, distributed, stored, promoted, marketed, imported, exported, distributed and sold in compliance in all respects with applicable FDA Laws, including, as applicable, those relating to non-
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clinical research, clinical research, establishment registration, device listing, premarket notification, Quality System Regulation, labeling, advertising, record-keeping, device importation and exportation, adverse event and malfunction reporting and reporting of corrections and removals except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(ii)Except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) the Company holds all permits, licenses or other approvals, including 510(k) clearances or premarket approvals required by applicable FDA Laws, (B) the Company is, and since January 1, 2018 has been, in compliance in all respects with all such permits, licenses and other approvals and (C) to the Company’s knowledge, no Governmental Entity is considering limiting, suspending or revoking any product’s permits, licenses or other approvals or changing the marketing classification or labeling of any of the products.
(iii)There are no Actions pending or, to the Company’s knowledge, threatened in writing by or on behalf of the FDA or any other Governmental Entity that has jurisdiction over the operations of the Company or any of its Subsidiaries alleging noncompliance with applicable laws, except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. Since January 1, 2018, the Company and its Subsidiaries have not received any written notice or communication from any Governmental Entity or third party alleging or asserting noncompliance with any applicable FDA Law, any warning or untitled letter, notice of violation, notice of inspectional observations, notice of import or export prohibition, import detention or refusal, unresolved Form FDA-483, or similar written letter or notice alleging noncompliance, except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(iv)Since January 1, 2018, no product distributed or sold by or on behalf of the Company and its Subsidiaries has been seized, detained, withdrawn, voluntarily or involuntarily recalled or subject to a suspension of manufacturing, and, to the Company’s knowledge, there are no facts or circumstances reasonably likely to cause (A) a withdrawal, recall, field notification, field correction, safety alert, termination, seizure, denial, detention, or suspension of the manufacturing, marketing or distribution, of any such product, (B) a change in the labeling of any such product or (C) a termination, seizure, or suspension of the marketing or distribution (including for commercial, investigational or any other use) of any such product, except, in each case, that would not reasonably be expected to have a Material Adverse Effect.
(v)Any studies, tests and preclinical and clinical trials conducted by or on behalf of the Company and its Subsidiaries were and, if ongoing, are being conducted in accordance with applicable laws, including, as applicable, FDA Laws, except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries have not received any written notices or correspondence from the FDA, other Governmental Entity, or any institutional review board or other ethics committee exercising comparable authority threatening to initiate or require the termination, suspension or modification of any studies, tests or preclinical or
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clinical trials conducted by or on behalf of the Company and its Subsidiaries except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(vi)To the Company’s knowledge, all filings, notifications, reports, and submissions to the FDA and any similar Governmental Entity made by or on behalf of the Company and its Subsidiaries were true, accurate and complete as of the date made, and, to the extent required to be updated, have been updated to be true, accurate and complete in all respects as of the date of such update, except as would not, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(vii)None of the Company or its Subsidiaries, any of its officers, employees, nor to the Company’s knowledge, any of its agents or distributors have (A) made any materially false statement on, or material omission from, any notifications, applications, approvals, reports and other submissions to any Governmental Entity or in any material legal proceeding; or (B) committed an act, made a statement, or failed to make a statement that would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” as set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for any other Governmental Entity to invoke any similar policy.
(w)Product Warranties; Product Liability.
(i)There are currently no claims or other Actions that have been submitted or asserted and are ongoing relating to breach of any guarantee, warranty or indemnity relating to any products designed, sold, manufactured, distributed or delivered by, or services provided by, the Company or its Subsidiaries, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the Company’s knowledge there is no design or manufacturing defect, nor any failure to warn, nor any non-conformity with applicable product warranties, with respect to any products now or previously designed, tested, sold, manufactured, distributed or delivered by, or services now or previously provided by, the Company or its Subsidiaries, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(ii)There are no claims or other Actions pending or threatened in writing alleging that the Company or its Subsidiaries have any liability (whether in negligence, breach of warranty, strict liability, failure to warn, or otherwise) arising out of or relating to any claimed injury or damage to individuals or property as a result of the claimed ownership, possession or use of any products allegedly designed, tested, sold, manufactured, distributed or delivered by the Company or its Subsidiaries, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(x)Insurance. The Company and each Company Subsidiary are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as, in the Company’s reasonable judgment, are prudent and customary in the businesses in which
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they are engaged; neither the Company nor any Company Subsidiary has been refused any insurance coverage sought or applied for; and neither the Company nor any Company Subsidiary has any 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, singly or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(y)Certificates; Authorizations. The Company and each Company Subsidiary possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any Company Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(z)Internal Controls. The Company and each Company Subsidiary maintain 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 U.S. GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Since the end of the Company’s most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting, in each case, other than as disclosed in any Company Reports.
(aa)Listing and Maintenance Requirements. The Company Common Stock issuable upon conversion or exercise of the Securities is registered pursuant to Section 12(b) of the Exchange Act and listed on the NYSE, and the Company has taken no action intended to, or which, to the Company’s knowledge, is reasonably likely to have the effect of, terminating the registration of the Company Common Stock under the Exchange Act or delisting the Company Common Stock from the NYSE, nor has the Company received as of the date of this Agreement any written notification that the SEC or the NYSE is contemplating terminating such registration or listing. The Company is in compliance in all material respects with the listing and listing maintenance requirements of the NYSE applicable to it for the continued trading of the Company Common Stock on the NYSE.
(bb)    Taxes and Tax Returns. The Company and each Company Subsidiary have (i) filed all federal, state, local and foreign Tax Returns required to be filed through the date of this Agreement or have timely requested valid extensions of the deadline by which to file such Tax Returns (except where the failure to file would not, singly or in the aggregate, have a Material Adverse Effect) and (ii) paid all Taxes required to be paid thereon (except where the failure to file or pay would not, singly or in the aggregate, have a Material Adverse Effect, or, except for those Taxes currently being contested in good faith and for which reserves have been established on the financial statements of the Company to the extent required by U.S. GAAP). No tax deficiency has been assessed against the Company or any Company Subsidiary which, singly or in the aggregate, has had or would have a Material Adverse Effect. Neither the Company nor any Company Subsidiary have received any notice or have knowledge of any tax deficiency which could reasonably be expected to be assessed against the Company or the Company Subsidiaries and which, singly or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
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(cc)    No Rated Securities. Neither the Company nor any Company Subsidiary has any securities rated by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act.
(dd)    Brokers and Finders. Other than A.G.P/Alliance Global Partners, whose fees are solely the Company’s obligation to pay, the Company has not retained, utilized or been represented by, or otherwise become obligated to, any broker, placement agent, financial advisor or finder in connection with the transactions contemplated by this Agreement or the other Transaction Agreements.
(ee)    No Additional Representations.
(i)The Company acknowledges that each Purchaser makes no representation or warranty as to any matter whatsoever except as expressly set forth in Section 3.02 or in any certificate delivered by such Purchaser pursuant to this Agreement, and the Company has not relied on or been induced by such information or any other representations or warranties (whether express or implied or made orally or in writing) not expressly set forth in Section 3.02 or in any certificate delivered by such Purchaser pursuant to this Agreement.
(ii)The Company acknowledges and agrees that, except for the representations and warranties expressly set forth in Section 3.02 or in any certificate delivered by each Purchaser pursuant to this Agreement, (i) no person has been authorized by such Purchaser to make any representation or warranty relating to such Purchaser or otherwise in connection with the transactions contemplated hereby, and if made, such representation or warranty must not be relied upon by the Company as having been authorized by such Purchaser, and (ii) any materials or information provided or addressed to the Company or any of its Affiliates or representatives are not and shall not be deemed to be or include representations or warranties of such Purchaser unless any such materials or information are the subject of any express representation or warranty set forth in Section 3.02 of this Agreement or in any certificate delivered by such Purchaser pursuant to this Agreement.
Section 3.02    Representations and Warranties of Each Purchaser. Each Purchaser, severally and not jointly, represents and warrants to, and agrees with, the Company as of the date hereof, as follows:
(a)Organization; Ownership. Purchaser is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite power
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and authority to own, operate and lease its properties and to carry on its business as it is being conducted on the date of this Agreement.
(b)Authorization; Sufficient Funds; No Conflicts.
(i)Purchaser has the power and authority to execute and deliver this Agreement and to consummate the purchase of the Securities. The execution, delivery and performance by Purchaser of the Transaction Agreements to which it is a party and the consummation of the transactions contemplated thereby have been duly authorized by all necessary action by Purchaser. No other proceedings on the part of Purchaser are necessary to authorize the execution, delivery and performance by Purchaser of the Transaction Agreements to which it is a party and consummation of the transactions contemplated thereby. This Agreement has been duly and validly executed and delivered by Purchaser. Assuming this Agreement constitutes the valid and binding obligation of the Company, this Agreement is a valid and binding obligation of Purchaser, enforceable against it in accordance with its terms, subject to the limitation of such enforcement by the Enforceability Exceptions.
(ii)Purchaser has as of the date hereof, and will have as of the Closing, cash in immediately available funds or uncalled and unrestricted capital commitments in excess of the Purchase Price payable by it.
(iii)The execution, delivery and performance of the Transaction Agreements to which Purchaser is a party by Purchaser, the consummation by Purchaser of the transactions contemplated thereby, and the compliance by Purchaser with any of the provisions thereof will not conflict with, violate or result in a breach of any provision of, or constitute a default under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, (A) any provision of Purchaser’s organizational documents, (B) any mortgage, note, indenture, deed of trust, lease, license, loan agreement or other agreement binding upon Purchaser or any of its Affiliates or (C) any permit, license, judgment, order, decree, ruling, injunction, statute, law, ordinance, rule or regulation applicable to Purchaser or any of its Affiliates, other than in the cases of clauses (B) and (C) as would not reasonably be expected to materially and adversely affect or delay the consummation of the Transactions.
(c)Consents and Approvals. No consent, approval, order or authorization of, or registration, declaration or filing with, or exemption or review by, any Governmental Entity is required on the part of Purchaser in connection with the execution, delivery and performance by Purchaser of this Agreement, and the consummation by Purchaser of the Transactions to which it is a party, except for any required filings or approvals under the HSR Act or any foreign antitrust or competition laws, requirements or regulations in connection with the issuance of shares of Company Common Stock upon the conversion or exercise of the Securities and any consent, approval, order, authorization, registration, declaration, filing, exemption or review the failure of which to be obtained or made, individually or in the aggregate, would not reasonably be expected to adversely affect or delay the consummation of the Transactions by Purchaser.
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(d)Securities Act Representations. Purchaser is aware that the sale of the Securities is being made in reliance on a private placement exemption from registration under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available. Purchaser is acquiring the Securities (and any shares of Company Common Stock issuable upon conversion or exercise of the Securities) for Purchaser’s own account, and not with a view toward, or for sale in connection with, any distribution thereof in violation of any federal or state securities or “blue sky” law, or with any present intention of distributing or selling such Securities (or any shares of Company Common Stock issuable upon conversion or exercise of the Securities) in violation of the Securities Act. Purchaser is able to fend for itself in the transactions contemplated herein. Purchaser has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in such Securities (or any shares of Company Common Stock issuable upon conversion or exercise of the Securities) and is capable of bearing the economic risks of such investment. Purchaser has been provided a reasonable opportunity to undertake and has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.
(e)Purchaser Status Representations. Purchaser is an “accredited investor” (as described in Rule 501(a)).
(f)Brokers and Finders. Purchaser has not retained, utilized or been represented by, or otherwise become obligated to, any broker, placement agent, financial advisor or finder in connection with the transactions contemplated by this Agreement whose fees the Company would be required to pay.
(g)No Additional Representations.
(i)Purchaser acknowledges that the Company does not make any representation or warranty as to any matter whatsoever except as expressly set forth in Section 3.01 or in any certificate delivered by the Company pursuant to this Agreement, and specifically (but without limiting the generality of the foregoing), that, except as expressly set forth in Section 3.01 or in any certificate delivered by the Company pursuant to this Agreement, the Company makes no representation or warranty with respect to (A) any matters relating to the Company, its business, financial condition, results of operations, prospects or otherwise, (B) any projections, estimates or budgets delivered or made available to Purchaser (or any of its Affiliates, officers, directors, employees or other representatives) of future revenues, results of operations (or any component thereof), cash flows or financial condition (or any component thereof) of the Company and its Subsidiaries or (C) the future business and operations of the Company and its Subsidiaries, and Purchaser has not relied on or been induced by such information or any other representations or warranties (whether express or implied or made orally or in writing) not expressly set forth in Section 3.01 or in any certificate delivered by the Company pursuant to this Agreement.
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(ii)No disclosure or offering document has been prepared in connection with the offer and sale of the Securities by any of A.G.P./Alliance Global Partners or its affiliates (together, the “Placement Agents”). Purchaser agrees that none of the Placement Agents shall be liable to it (including in contract, tort, under federal or state securities laws or otherwise) for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the Offering, except for any such Placement Agent’s own gross negligence, willful misconduct or bad faith. The Placement Agents and their respective directors, officers, employees, representatives and controlling persons have made no independent investigation with respect to the Company or the Securities or the accuracy, completeness or adequacy of any information supplied to the Purchaser by the Company. In connection with the issue and purchase of the Securities, the Placement Agents have not acted as any Purchaser’s financial advisors or fiduciaries.
(iii)Purchaser acknowledges that certain information provided to it was based on projections, and such projections were prepared based on assumptions and estimates that are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections. Purchaser acknowledges that such information and projections were prepared without the participation of the Placement Agents and that the Placement Agents do not assume responsibility for independent verification of, or the accuracy or completeness of, such information or projections.
(iv)(a) Purchaser has conducted its own investigation of the Company and the Securities and it has not relied on any statements or other information provided by the Placement Agents concerning the Company or the Securities or the offer and sale of the Securities, (b) Purchaser has had access to, and an adequate opportunity to review, financial and other information as it deems necessary to make its decision to purchase the Securities, (c) Purchaser has been offered the opportunity to ask questions of the Company and received answers thereto, including on the financial information, as it deemed necessary in connection with its decision to purchase the Securities; and (d) Purchaser has made its own assessment and has satisfied itself concerning the relevant tax and other economic considerations relevant to its investment in the Securities. Purchaser acknowledges and agrees that, except for the representations and warranties expressly set forth in Section 3.01 or in any certificate delivered by the Company pursuant to this Agreement, (A) no person has been authorized by the Company to make any representation or warranty relating to itself or its business or otherwise in connection with the transactions contemplated hereby, and if made, such representation or warranty must not be relied upon by Purchaser as having been authorized by the Company, and (B) any estimates, projections, predictions, data, financial information, memoranda, presentations or any other materials or information provided or addressed to Purchaser or any of its Affiliates or representatives are not and shall not be deemed to be or include representations or warranties of the Company unless any such materials or information are the subject of any express representation or warranty set forth in Section 3.01 of this Agreement or in any certificate delivered by the Company pursuant to this Agreement.
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ARTICLE 4    ADDITIONAL AGREEMENTS
Section 4.01     Taking of Necessary Action. Each party hereto agrees to use its reasonable efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the sale and purchase of the Securities hereunder, subject to the terms and conditions hereof and compliance with applicable law. In case at any time before or after the Closing any further action is necessary or desirable to carry out the purposes of the sale and purchase of the Securities, the proper officers, managers and directors of each party to this Agreement shall take all such necessary action as may be reasonably requested by, and the sole expense of, the requesting party.
Section 4.02    Securities Laws. Each Purchaser acknowledges and agrees that the issuance and sale of the Securities (and the shares of Company Common Stock that are issuable upon conversion or exercise of the Securities) have not been registered under the Securities Act or the securities laws of any state and that they may be sold or otherwise disposed of only in one or more transactions registered under the Securities Act and, where applicable, such laws, or as to which an exemption from the registration requirements of the Securities Act and, where applicable, such laws, is available. Each Purchaser acknowledges that, except as set forth in Section 4.10 of this Agreement (or, if applicable, the Registration Rights Agreement), such Purchaser has no right to require the Company or any Company Subsidiary to register the shares of Company Common Stock that are issuable upon conversion or exercise of the Securities. Each Purchaser also acknowledges and agrees that the Securities and underlying shares of Company Common Stock may be notated with a restrictive legend, subject to the terms of the Certificate of Designation and the Warrants.
The Preferred Shares shall initially bear the legend set forth below when issued at the Closing Date:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.”
The Warrants shall initially bear the legend set forth in Exhibit B when issued at the Closing Date.
Section 4.03    Lost, Stolen, Destroyed or Mutilated Securities. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any certificate for any Securities and, in the case of loss, theft or destruction, upon delivery of an undertaking by the holder thereof to indemnify the Company (and, if requested by the Company, the delivery of an indemnity bond sufficient in the judgment of the Company to protect the Company from any loss it may suffer if a certificate is replaced), or, in the case of mutilation, upon surrender and
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cancellation thereof, the Company will issue a new certificate or, at the Company’s option, a share ownership statement representing such securities for an equivalent number of shares or another security of like tenor, as the case may be.
Section 4.04    Antitrust Approval. The Company and the Purchasers acknowledge that one or more filings under the HSR Act or foreign antitrust laws may be necessary in connection with the issuance of shares of Company Common Stock upon conversion or exercise of the Securities. Each Purchaser will promptly notify the Company if any such filing is required on the part of such Purchaser. To the extent reasonably requested, the Company, such Purchaser and any other applicable Purchaser Affiliate will use reasonable best efforts to cooperate in timely making or causing to be made all applications and filings under the HSR Act or any foreign antitrust requirements in connection with the issuance of shares of Company Common Stock upon conversion or exercise of the Securities held by such Purchaser or any Purchaser Affiliate in a timely manner and as required by the law of the applicable jurisdiction; provided that, notwithstanding anything in this Agreement to the contrary, the Company shall not have any responsibility or liability for failure of such Purchaser or any of its Affiliates to comply with any applicable law. The Company and each Purchaser shall cooperate, provide all necessary information, and keep each other fully apprised with respect to such filing and regulatory processes. For as long as there are Securities outstanding and owned by a Purchaser or its Affiliates, the Company shall as promptly as reasonably practicable provide (no more than four (4) times per calendar year) such information regarding the Company and its Subsidiaries as the Purchasers may reasonably request in order to determine what foreign antitrust requirements may exist with respect to any potential conversion or exercise of the Securities. Each party shall be responsible for the payment of the filing fees and any other costs and expenses incurred by it in connection with any such applications or filings made by such party.
Section 4.05    Disclosure of Transactions. The Company shall (i) or prior to 8:00 a.m., Eastern time, on the first (1st) Business Day after the date hereof issue a press release describing the terms of the Transactions contemplated by the Transaction Agreements and (ii) no later than close of business on such Business Day, file a Current Report on Form 8-K attaching this Agreement, the Certificate of Designation and the form of the Warrants as exhibits to such filing (which shall not include schedules or exhibits not customarily filed with the SEC), describing the terms of the transactions contemplated by the Transaction Agreements in the form required by the Exchange Act, and, in each case, shall give the Purchasers the opportunity to review and comment on such press release and Current Report on Form 8-K. The Company shall use its commercially reasonable efforts to not, and to cause each of its Subsidiaries and its and each of their respective officers, directors, affiliates, employees and agents, not to, provide any Purchaser (other than Purchasers who are directors or officers of the Company) with any material, non-public information regarding the Company or any of its Subsidiaries from and after the Closing Date without the express prior written consent of such Purchaser or as otherwise contemplated by the Transaction Agreements, provided, however, that such restriction shall not apply to the provision of such information to directors or officers of the Company who are, or who are affiliated with, a Purchaser, and the Company makes no such covenant with respect to information that such affiliated director or officer may provide to such Purchaser. For the avoidance of doubt, the Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, affiliates, employees and agents, not to, provide any Purchaser with any earnings information that constitutes material, non-public information
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pursuant to the immediately preceding sentence without the express written consent of such Purchaser. To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that, unless otherwise expressly agreed between such Purchaser and the Company, such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective, officers, directors, affiliates, employees or agents with respect to, or a duty to the Company, any of its Subsidiaries, or any of their respective, officers, directors, affiliates, employees or agents not to trade on the basis of, such material, non-public information. The Company understands and confirms that each of such Purchaser will rely (in their own discretion) on the foregoing in effecting transactions in securities of the Company.
Section 4.06    Authorized and Reserved Company Common Stock. For so long as any Securities are outstanding, the Company shall cause the authorized Capital Stock of the Company to include a sufficient number of authorized but unissued shares of Company Common Stock to satisfy the conversion and exercise requirements of all Securities then outstanding (giving effect to any adjustment to the conversion rate pursuant to the Certificate of Designation or any adjustment pursuant to the Warrants and assuming upon conversion the only settlement option under the Certificate of Designation or Warrants was for settlement in shares of Company Common Stock), and shall reserve and keep available out of its authorized but unissued shares of Company Common Stock such number of shares thereof for issuance upon conversion and exercise of the Securities.
Section 4.07    Indemnification.
(a)Each Purchaser, its Affiliates and its and their respective officers, directors, members, employees, managers, general partners, advisors and agents (each, an “Indemnitee”) shall be indemnified to the fullest extent permitted by law by the Company, jointly and severally, for any and all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, the “Losses”) to which such Indemnitees may become subject as a result of, arising in connection with, or relating to any actual or threatened claim, suit, action, arbitration, cause of action, complaint, allegation, criminal prosecution, investigation, inquiry, demand letter, or proceeding, whether at law or at equity, direct or derivative and whether public or private, before or by any Governmental Entity, any arbitrator or other tribunal (each, and including any appeals therefrom, an “Action”) by any third party (including, without limitation, any stockholder of the Company or any regulator and including Losses arising from Actions not directly against an Indemnitee, such as witness expenses or responding to inquiries from a Governmental Entity) related to the Transactions; provided that the Company shall not be liable to indemnify any Indemnitee for any such Losses to the extent that such Losses (i) have resulted from a Purchaser’s breach of this Agreement, (ii) related to any transaction or arrangement, including any financing or hedging arrangement or trading in Company Common Stock, of such Purchaser or its Affiliates in connection with the applicable Purchaser’s or its Affiliates’ investment in the Securities or (iii) have resulted from an Indemnitee’s willful misconduct or fraud in connection with the Transactions; provided, further, that the Company shall not be liable to indemnify an Indemnitee or its Affiliates and its and their respective officers, directors, members, employees, managers, general partners, advisors and agents under this Section 4.07 unless such Indemnitee provides
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notice of an Action for which indemnification is sought no later than one (1) year following the Closing Date, in which case the Company’s indemnification obligations under this Section 4.07 shall cover such Action and any appeals therefrom.
(b)Each Indemnitee shall give the Company prompt written notice (an “Indemnification Notice”) of any Action it has actual knowledge of that might give rise to Losses for which an Indemnitee would reasonably be likely to be entitled to indemnification under this Section 4.07, which notice shall set forth a description of those elements of such Action of which such Indemnitee has knowledge and promptly deliver to the Company any complaints such Action or other documents provided to such Indemnitee in connection with; provided, that any delay or failure to give such Indemnification Notice shall not affect the indemnification obligations of the Company hereunder except to the extent the Company are materially prejudiced by such delay or failure.
(c)The Company shall have the right, exercisable by written notice to the applicable Indemnitee within thirty (30) days of receipt of the applicable Indemnification Notice, to select counsel to defend and control the defense of any third party claim set forth in such Indemnification Notice and the Company shall pay all fees and expenses of such counsel; provided, that the Company shall not be entitled to so select counsel or control the defense of any claim to the extent that (i) such claim seeks primarily non-monetary or injunctive relief against the Indemnitee or alleges any violation of criminal law, (ii) the Company does not, subsequent to its assumption of such defense in accordance with this clause (c), conduct the defense of such claim in good faith, (iii) any of the Indemnitees reasonably determines upon the advice of counsel that representation of all such Indemnitees by the same counsel would be prohibited by applicable codes of professional conduct, or (iv) in the event that, based on the reasonable advice of counsel for the applicable Indemnitee, there are one or more material defenses available to the applicable Indemnitee that are not available to other defendants. If the Company does not assume the defense of any third party claim in accordance with this clause (c), the applicable Indemnitee may continue to defend such claim at the sole cost of the Company and the Company may still participate in, but not control, the defense of such third party claim at the Company’s sole cost and expense. In no event shall the Company, in connection with any Action or separate but substantially similar Actions arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnitees chosen by the applicable Purchaser together with its Affiliates, and one separate firm of local counsel, in addition to regular counsel, to the extent required in order to effectively defend the Action.
(d)No Indemnitee shall consent to a settlement of, or the entry of any judgment arising from, any claim for which such Indemnitee is entitled to indemnification pursuant to this Section 4.07, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed). Except with the prior written consent of the applicable Indemnitee, the Company, in the defense of any claim for which such Indemnitee is entitled to indemnification pursuant to this Section 4.07, shall not consent to the entry of any judgment or enter into any settlement unless such settlement includes (i) an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. In any such third party claim where the Company has assumed control of the defense thereof pursuant to clause (c), the Company shall
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keep the applicable Indemnitee reasonably informed as to the status of such claim at all stages thereof (including all settlement negotiations and offers), promptly submit to such Indemnitee copies of all pleadings, responsive pleadings, motions and other similar legal documents and paper received or filed in connection therewith, permit such Indemnitee and their respective counsels to confer with the Company and its counsel with respect to the conduct of the defense thereof, and permit such Indemnitee and their respective counsel a reasonable opportunity to review all legal papers to be submitted prior to their submission; provided that the Company shall not be obligated to provide materials, documents or information the disclosure of which would reasonably be likely to jeopardize the attorney-client privilege between the Company and its counsel or violate applicable law.
Section 4.08    Certain Tax Matters. It is the intention of the Company that the Preferred Shares shall constitute stock that participates in corporate growth to a significant extent within the meaning of Section 1.305-5(a) of the U.S. Treasury Regulations and therefore do not constitute “preferred stock” within the meaning of Section 305 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and the U.S. Treasury Regulations promulgated thereunder. In addition, the Company and the Purchasers agree that it is their intention that, for U.S. federal and applicable state income Tax purposes, any dividend issued with respect to the Preferred Shares shall not be treated, pursuant to Section 305(b)(4) of the Code and the U.S. Treasury Regulations promulgated thereunder, as having been paid with respect to the Preferred Shares unless and until the payment of such dividend is declared by the Board of Directors (and the Company further agrees that no such declaration will be made by the Board of Directors without the cash payment of the declared dividend with respect to the Preferred Shares). The Company and the Purchasers shall file all Tax Returns and determine all applicable Taxes consistent with such tax treatment unless otherwise required by a taxing authority subsequent to an audit defended in good faith.
Section 4.09    No Short Sales. Each Purchaser, individually, shall not, and shall cause its affiliates not to, engage, directly or indirectly, in any transactions in the securities of the Company (including, without limitation, any “Short Sales” (as such term is defined in Rule 200 promulgated under Regulation SHO under the Exchange Act)) during the period from the date hereof until such time as (i) the transactions contemplated by this Agreement are first publicly announced or (ii) this Agreement is terminated.
Section 4.10     Registration Rights.
(a)As promptly as reasonably practicable after Closing, but in any event within thirty (30) days after the Closing Date, the Company shall file and use commercially reasonable efforts to cause to be declared effective or otherwise become effective pursuant to the Securities Act a shelf Registration Statement on Form S-3 (or if Form S-3 is not available to the Company, then on Form S-1) (a “Shelf Registration Statement”), or shall amend an existing Shelf Registration Statement, to register the resale all of the shares of Company Common Stock issuable upon conversion or exercise of Securities (the “Shares”). The Company shall use commercially reasonable efforts to cause such Shelf Registration Statement to become effective within sixty (60) days following the Closing Date, or within one ninety (90) days following the Closing Date if the SEC notifies the Company that it will review such Shelf Registration Statement. The Company agrees to cause such Shelf Registration Statement, or another shelf
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registration statement that includes the shares of Company Common Stock issuable upon conversion or exercise of Securities to be sold pursuant to this Agreement, to remain effective until the earliest of (x) the fifth anniversary of the Closing, (y) the date on which Purchaser ceases to hold any shares of Company Common Stock issuable upon conversion or exercise of Securities, and (z) on the first date on which Purchaser is able to sell all of its shares of Company Common Stock issuable upon conversion or exercise of Securities without restriction under Rule 144 of the Securities Act within ninety (90) days without limitation as to the amount of such securities that may be sold, any volume and manner of sale restrictions which may be applicable to affiliates under Rule 144(b)(2). Purchaser agrees to disclose its ownership to the Company upon request to assist it in making the determination described above. In no event shall Purchaser be identified as a statutory underwriter in the Shelf Registration Statement unless requested by the SEC; provided, that if the SEC requests that Purchaser be identified as a statutory underwriter in the Shelf Registration Statement, Purchaser will have an opportunity to withdraw its shares of Company Common Stock issuable upon conversion or exercise of Securities from the Shelf Registration Statement. Notwithstanding the foregoing, if the SEC seeks to prevent the Company from including any or all of the shares proposed to be registered under the Shelf Registration Statement due to limitations on the use of Rule 415 of the Securities Act for the resale by the applicable stockholders or otherwise, the Company shall use its best efforts to ensure that the SEC determines that (1) the offering contemplated by the Shelf Registration Statement is a bona fide secondary offering and not an offering “by or on behalf of the issuer” as defined in Rule 415 of the Securities Act and (2) the Purchaser is not a statutory underwriter. If the Company is unsuccessful in the efforts described in the preceding sentence then the Company shall cause such Shelf Registration Statement to register for resale such number of shares which is equal to the maximum number of shares as is permitted by the SEC. In such event, the number of shares to be registered for each selling stockholder named in the Shelf Registration Statement shall be reduced pro rata among all such selling stockholders, and the Company will register Purchaser’s remaining shares that were not registered at the earliest date permitted by the SEC and subject to the other terms and conditions of this Section 4.10. The Company will use commercially reasonable efforts to file all reports and provide all customary and reasonable cooperation necessary to enable the undersigned to resell the shares of Company Common Stock issuable upon conversion or exercise of Securities pursuant to the Shelf Registration Statement or Rule 144 of the Securities Act (when Rule 144 of the Securities Act becomes available to Purchaser for such shares), as applicable.
(b)Notwithstanding anything to the contrary contained herein, if the filing, initial effectiveness or continued use of a Shelf Registration Statement at any time would (a) require the Company to make an Adverse Disclosure, (b) require the inclusion in such Shelf Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, or (c) in the good faith judgment of the majority of the Board of the Directors, would be seriously detrimental to the Company and the majority of the Board concludes as a result that it is essential to defer such filing, initial effectiveness or continued use at such time (each of (a), (b) or (c) a “Suspension Event”), the Company may delay the filing or initial effectiveness of, or suspend use of, such Shelf Registration Statement for a period of not more than one hundred twenty (120) days; provided, however, that the Company may not invoke this right more than twice in any twelve (12) month period and the Company shall use commercially reasonable efforts to make such Shelf Registration Statement available as soon as practicable thereafter. The Company’s obligations to include the shares of Company Common
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Stock issuable upon conversion or exercise of Securities issued pursuant to this Agreement for resale in the Shelf Registration Statement are contingent upon Purchaser furnishing in writing to the Company such information regarding Purchaser, the securities of the Company held by Purchaser and the intended method of disposition of such shares as shall be reasonably requested by the Company to effect the registration of such shares, and shall execute such documents in connection with such registration as the Company may reasonably request that are customary of a selling stockholder in similar situations. The Company shall use its commercially reasonable efforts to provide to Purchaser a copy of any filing that is proposed to include disclosure relating to Purchaser at least five (5) days in advance of any disclosure thereof and shall include such revisions to such proposed disclosure as Purchaser shall reasonably request so as to result in disclosure that is compliant with applicable securities laws and regulations.
(c)At its expense the Company, after the filing of the Shelf Registration Statement, the Company shall promptly, and in no event later than two (2) business days after such filing, notify Purchaser of such filing, and shall further notify Purchaser within two (2) business days of the occurrence of any of the following: (i) when the Shelf Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the SEC for amendments or supplements to any effective Shelf Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of any Shelf Registration Statement and the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered or the initiation of any proceedings for such purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the shares included therein for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) subject to the provisions in this Agreement, of the occurrence of any event that requires the making of any changes in any Shelf Registration Statement or prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading. Upon receipt of any written notice from the Company (which notice shall not contain any material non-public information regarding the Company) of the happening of any of the foregoing or of a Suspension Event during the period that the Shelf Registration Statement is effective or if as a result of a Suspension Event the Shelf Registration Statement or related prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made (in the case of the prospectus) not misleading, Purchaser agrees that (1) it will immediately discontinue offers and sales of the Shares under the Shelf Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until Purchaser receives copies of a supplemental or amended prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s) or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified by the Company that it may resume such offers and sales, and (2) it will maintain the confidentiality of any information included in such written notice delivered by the Company except (A) for disclosure to Purchaser’s employees, agents and professional advisers who need to know such information and are obligated to keep it confidential, (B) for disclosures to the extent required in order to comply with reporting obligations to its limited partners who have agreed to keep such information confidential and (C) as required by law or subpoena. The Company shall use its commercially
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reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of any Shelf Registration Statement as soon as reasonably practicable. Upon the occurrence of any event contemplated in clauses (i) through (v) above, except for such times as the Company is permitted hereunder to suspend, and has suspended, the use of a prospectus forming part of a Shelf Registration Statement, the Company shall use its commercially reasonable efforts to as soon as reasonably practicable prepare a post-effective amendment to such Shelf Registration Statement or a supplement to the related prospectus, or file any other required document so that, as thereafter delivered to purchasers of the shares included therein, such prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(d)The Company and each Purchaser that is party to, or is an Affiliate of a party to, the Registration Rights Agreement acknowledges and agrees that the shares of Company Common Stock issuable upon conversion or exercise of Securities acquired by such Purchaser pursuant to the terms of this Agreement shall constitute “Registrable Securities” for purposes of the Registration Rights Agreement and such shares shall be included in the Shelf Registration Statement contemplated by Section 4.10(a) of this Agreement. To the extent the Registration Rights Agreement provides more favorable treatment to the Purchaser than any of the provisions in this Section 4.10 or otherwise conflicts with this Section 4.10 (other than with respect to the timeframe for filing and effectiveness of the Shelf Registration Statement as contemplated in paragraph (a) of this Section 4.10), the provisions of the Registration Rights Agreement shall control.
Section 4.11    Expenses. At the Closing, the Company shall pay or reimburse all reasonable and documented out-of-pocket fees, costs, and expenses of counsel to Eclipse (“Counsel Expenses”) with respect to the Transactions incurred prior to the Closing or abandonment of the Transactions. If the Transactions are consummated, the Company shall pay the Counsel Expenses no later than the Closing Date. If the Transactions are not consummated, the Company shall pay or reimburse the Counsel Expenses promptly (and in any event within thirty (30) calendar days) following request therefor by Eclipse.
Section 4.12    Participation Rights.
(a)Subject to Section 4.12(f), if the Company or any of its Subsidiaries proposes to sell to any Person any Preemptive Securities in a financing transaction for cash, (such securities, the “New Securities”), then the Company shall first deliver to the Major Investors a written notice (an “Offer Notice”) setting forth: (i) the aggregate number of New Securities proposed to be sold, (ii) the price per New Security and all other material terms and conditions, (iii) the identity of each Person to whom securities are proposed to be sold (or, if unknown, how such Persons shall be identified), (iv) all written financial information and other disclosures provided by the Company or its representatives to any other proposed recipient of the New Securities and (v) an offer to sell to each Major Investor, on the same terms and conditions described in the Offer Notice, up to a fraction of such New Securities equal to such Major Investor’s Pro Rata Percentage.
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(b)The Major Investors may irrevocably elect to purchase New Securities on the terms set forth in the Offer Notice by delivering a written notice to the Company within five (5) Business Days after receipt of the Offer Notice (or such longer period as the Company may specify therein) setting forth the amount of New Securities that the Major Investors desire to purchase (a “Purchase Notice”). If at least one Major Investor delivers a Purchase Notice for its full Pro Rata Percentage (a “Fully Subscribing Major Investor”), but one or more other Major Investors does not deliver a Purchase Notice for its full Pro Rata Percentage (an “Undersubscribing Major Investor”), then the Company shall offer to the Fully Subscribing Major Investor such portion of the New Securities eligible to be purchased by the Undersubscribing Major Investors that such Investor Parties did not elect to purchase (the “Undersubscribed New Securities”). Each Fully Subscribing Major Investor may offer to purchase up to the full amount of Undersubscribed New Securities and to the extent more than one Fully Subscribing Major Investor offers to purchase Undersubscribed New Securities, such Undersubscribed New Securities shall be allocated ratably based on such Fully Subscribing Major Investor’s Pro Rata Percentage.
(c)In the event the Major Investors timely deliver a Purchase Notice, then the sale of New Securities set forth in the Purchase Notice delivered by the Major Investors shall take place no later than sixty (60) days after the date of the Offer Notice and concurrent with the issuance of New Securities to other Person(s), if any, participating in such sale of New Securities, and the number of New Securities issued to Persons other than the Major Investors shall be no greater than the number of New Securities described in the Offer Notice minus the number of New Securities elected to be purchased by the Major Investors in the related Purchase Notice. In the event that no Major Investor timely delivers a Purchase Notice, then the Company or its Subsidiary, as applicable, shall have the right, but shall not be obligated, to sell no later than ninety (90) days after the date of the Offer Notice up to the number of New Securities described in the Offer Notice; provided that such ninety (90) day period may be extended up to 180 days in the event of any required regulatory approval in connection with the sale of the New Securities. If the New Securities are not sold during such period, the rights of the Major Investors under this Section 4.12 shall apply to any such proposed sale and the Company shall provide a new Offer Notice.
(d)New Securities issued hereunder to the Major Investors shall be on the terms set forth in the related Offer Notice, and New Securities issued to any other Person(s) shall be at a price and on other terms and conditions not more favorable to such Person(s) than those offered to the Major Investors in the related Offer Notice.
(e)The Major Investors may assign, in whole or in part, their right to purchase New Securities pursuant to this Section 4.12 to any Affiliate and, upon such assignment, such Person shall be entitled to exercise the rights of the Major Investors hereunder.
(f)The rights of the Major Investors under this Section 4.12 shall not apply to Preemptive Securities issued pursuant to the 2021 Incentive Award Plan of the Company or any similar equity- or incentive-based compensation plan or agreement approved by the Board of Directors.
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(g)If, as a result of the exercise of a right pursuant to this Section 4.12, one or more Major Investors notify the Company within five (5) business days of their exercise of such right that such Major Investors reasonably believe a Regulatory Approval Condition may apply, then such Major Investors and the Company shall cooperate in good faith to determine the applicability of any such Regulatory Approval Condition and use (and cause their respective Affiliates to use) their respective commercially reasonable efforts to take or cause to be taken all actions reasonably necessary or advisable on their part to cause the satisfaction of any such Regulatory Approval Condition, including by: (i) furnishing the other with all information concerning itself and its Affiliates, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice or application made by or on behalf of the Major Investors, or the Company or any of their respective Affiliates to any governmental authority in connection with such exercise; and (ii) preparing and filing as promptly as reasonably practicable all documentation to effect all necessary notices, reports and other filings and to obtain as promptly as reasonably practicable all consents, clearances, registrations, approvals, permits and authorizations necessary or advisable to be obtained from any governmental authority in order to consummate such purchase of New Securities. Notwithstanding anything to the contrary herein, in no event shall any transaction pursuant to this Section 4.12 occur without the written consent of the Major Investors and the Company unless and until the satisfaction of all Regulatory Approval Conditions that either such Person reasonably determines are applicable to such conversion. The costs and expenses of all activities required pursuant to this Section 4.12 shall be borne by the Person or Persons incurring such costs and expenses.
(h)In lieu of the participation rights set forth in this Section 4.12, to the extent the proposed issuance of New Securities will be registered pursuant to the Securities Act to be sold in a transaction in which the Company has engaged one or more underwriter(s), the Company will (i) give the Major Investors advance notice of such proposed issuance as promptly as is reasonably practical and prudent in light of the timing and nature of the transaction, but no less than five Business Days before the public announcement of such transaction and (ii) cause the underwriters to allow the Major Investors to participate in such proposed issuance in an amount up to the Major Investor’s Pro Rata Percentage (and giving effect to the over- and under-subscription provisions of Section 4.12(b)) on the same terms, conditions and price to be provided to other investors in the proposed issuance of New Securities, subject to the Major Investor’s compliance with any timing, indication, eligibility and documentation requirements imposed by any underwriter on similarly situated participants in the transaction.
Section 4.13    Facilitation of Sales Pursuant to Rule 144. The Company shall use reasonable efforts to take such necessary action as any holder of Securities may reasonably request in connection with the removal of any restrictive legend on the Securities being sold, all to the extent required from time to time to enable such holder to sell the Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 (including those referred to in subparagraph (i) of Rule 144).
Section 4.14     Subsequent Equity Sales. From the date hereof until sixty (60) days after the initial effective date of the Shelf Registration Statement, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Company Common Stock or Common Stock Equivalents or (ii) file any
38



registration statement or any amendment or supplement thereto, in each case other than a Shelf Registration Statement as contemplated pursuant to Section 4.10; provided, however, that such restriction shall not apply to (a) any shares of Company Common Stock or Common Stock Equivalents issued by the Company upon the exercise of an option or warrant, the settlement of a restricted stock unit or the conversion of a security, in each case, outstanding on the date hereof or to be issued pursuant to this Agreement, (b) the grant of compensatory equity-based awards, and/or the issuance of shares of Company Common Stock with respect thereto, made pursuant to compensatory equity-based plans, (c) any shares of Company Common Stock issued pursuant to any non-employee director compensation plan, (d) the filing of a registration statement on Form S-8 or any successor form thereto with respect to the registration of securities to be offered under any employee benefit or equity incentive plans of the Company or (e) the issuance of shares of Company Common Stock, restricted stock awards or securities convertible into or exercisable or exchangeable for shares of Company Common Stock in connection with (i) the acquisition of the securities, business, property or other assets of another Person or pursuant to any employee benefit plan assumed in connection with any such acquisition, (ii) joint ventures, (iii) commercial relationships or (iv) other strategic transactions.
Section 4.15    Confidentiality. Each Purchaser agrees to use the same degree of care as such Purchaser uses to protect its own confidential information to keep confidential any information furnished to such Purchaser under this Agreement (including, without limitation, Section 4.10 and Section 4.12) that the Company identifies as being confidential or proprietary (so long as such information is not in the public domain), except that such Purchaser may disclose such proprietary or confidential information (i) to any partner, subsidiary or parent of such Purchaser or to a potential transferee of any Securities by such Purchaser as long as such other Person is advised of and agrees or has agreed to be bound by the confidentiality provisions of this Section 4.15 or comparable restrictions; (ii) at such time as it enters the public domain through no fault of such Purchaser; (iii) that is communicated to it free of any obligation of confidentiality; (iv) that is developed by Purchaser or its agents independently of and without reference to any confidential information communicated by the Company; (v) as required by applicable law or legal processes; or (vi) to such Purchaser’s lawyers, contractors, accountants and other advisors who have a need to have access and knowledge of such information and under a duty of confidentiality to such Purchaser or has agreed to be bound by the confidentiality provisions of this Section 4.15 or comparable restrictions.
ARTICLE 5    MISCELLANEOUS
Section 5.01 Survival of Representations and Warranties. All covenants and agreements contained herein, other than those which by their terms apply in whole or in part after the Closing (which shall survive the Closing), shall terminate as of the Closing, provided nothing herein shall relieve any party of liability for any breach of such covenant or agreement before it terminated. The representations and warranties made herein shall survive for one (1) year following the Closing Date and shall then expire; provided that nothing herein shall relieve any party of liability for any inaccuracy or breach of such representation or warranty to the
39



extent that any good faith allegation of such inaccuracy or breach is made in writing prior to such expiration.
Section 5.02    Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (a) personal delivery to the party to be notified, (b) when sent, if sent by electronic mail or facsimile during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next Business Day, (c) three (3) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) Business Day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next Business Day delivery, with written verification of receipt, to the parties at the following addresses:
(a)If to the Company:
Owlet, Inc.
3300 North Ashton Boulevard, Suite 300
Lehi, Utah 84042
Attn:Chief Legal Officer
Email:legal@owletcare.com

with a copy (which will not constitute actual or constructive notice) to:
Latham & Watkins LLP
650 Town Center Drive, 20th Floor
Costa Mesa, California 92626
Attn:Drew Capurro
Email:drew.capurro@lw.com

    (b)     If to any Purchaser, as set forth on Purchaser’s signature page, or to such other address or addresses as shall be designated in writing.
Section 5.03    Entire Agreement; Third Party Beneficiaries; Amendment.
(a)This Agreement and the other Transaction Agreements set forth the entire agreement between the parties hereto with respect to the Transactions, supersede all prior agreements and understandings, both oral and written, among the parties and their respective Affiliates with respect to the subject matter hereof and thereof.
(b)This Agreement is not intended to and shall not confer upon any person other than the parties hereto, their successors and permitted assigns any rights or remedies hereunder, provided that (i) Section 4.07 shall be for the benefit of and fully enforceable by each Indemnitee; and (ii) Section 5.11 shall be for the benefit of and fully enforceable by each of the Specified Persons.
(c)Any provision of this Agreement may be amended, modified or waived in whole or in part at any time only by an agreement in writing between the parties hereto executed
40



in the same manner as this Agreement. No failure on the part of any party to exercise, and no delay in exercising, any right shall operate as a waiver thereof nor shall any single or partial exercise by any party of any right preclude any other or future exercise thereof or the exercise of any other right.
Section 5.04    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute any original, but all of which together shall constitute one and the same document. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document will have the same effect as physical delivery of the paper document bearing the original signature. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement or any document to be signed in connection with this Agreement shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, and the parties hereto consent to conduct the transactions contemplated hereunder by electronic means.
Section 5.05    Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the Company’s successors and assigns and each Purchaser’s successors and assigns, and no other person; provided, that neither the Company nor any Purchaser may assign its respective rights or delegate its respective obligations under this Agreement without the written consent of the Company or such Purchaser, as applicable, whether by operation of law or otherwise, and any assignment by the Company or such Purchaser in contravention hereof shall be null and void; provided further that (i) any Purchaser may assign all of its rights and obligations under this Agreement or, in the case of this Agreement, any portion thereof, to one or more Affiliates who execute and deliver to the Company a Joinder and a duly completed and executed IRS Form W-8 or W-9, as applicable, and any such assignee who executes and delivers to the Company a Joinder shall be deemed a Purchaser hereunder and have all the rights and obligations of such Purchaser so assigned; provided that no such assignment will relieve such assigning Purchaser of its obligations hereunder until the Closing; or (ii) if the Company consolidates or merges with or into any Person and the Company Common Stock is, in whole or in part, converted into or exchanged for securities of a different issuer in a transaction then as a condition to such transaction the Company will cause such issuer to assume all of the Company’s rights and obligations under this Agreement in a written instrument delivered to such Purchaser.
Section 5.06    Governing Law; Jurisdiction; Waiver of Jury Trial.
(a)This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. In addition, each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising
41



hereunder brought by the other party hereto or its successors or assigns, may be brought and determined in the United States District Court for the Southern District of New York or any New York State court sitting in New York and hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself in respect of its properties, assets and revenues. Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 5.06, (ii) any claim that it or its property is exempt or immune from the jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable law, any claim that (A) the suit, action or proceeding in such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each of the parties hereby agrees that service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 5.02 shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated hereby.
(b)EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS CONTAINED IN THIS SECTION 5.06.
Section 5.07    Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect provided that the economic and legal substance of, any of the Transactions is not affected in any manner materially adverse to any party. In the event of any such determination, the parties agree to negotiate in good faith to modify this Agreement to fulfill as closely as possible the original intent and purpose hereof. To the extent permitted by law, the parties hereby to the same extent waive any provision of law that renders any provision hereof prohibited or unenforceable in any respect.
Section 5.08    Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each party agrees that in the event of any breach or threatened breach by any other party of any covenant or obligation contained in this Agreement, the non-breaching party shall be entitled (in addition to any other remedy that may be available to it, whether in law or equity) to obtain (i) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation, and (ii) an injunction restraining such breach or threatened breach. Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief on the basis that any other party has an adequate remedy at law or that any award
42



of specific performance is not an appropriate remedy for any reason at law or in equity. Any party seeking an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement shall not be required to provide any bond or other security in connection with any such order or injunction.
Section 5.09    Headings. The headings of Articles and Sections contained in this Agreement are for reference purposes only and are not part of this Agreement.
Section 5.10    Non-Recourse. This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement or the transactions contemplated hereby may only be brought against the entities that are expressly named as parties hereto and their respective successors and assigns (including any person that executes and delivers a Joinder). Except as set forth in the immediately preceding sentence, no past, present or future director, officer, employee, incorporator, member, partners, stockholder, Affiliate, agent, attorney, advisor or representative of any party hereto or any of such party’s Affiliates (collectively, the “Specified Persons”) shall have any liability for any obligations or liabilities of any party hereto under this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby. All obligations of any Purchaser hereunder shall be several obligations of such Purchaser and, for the avoidance of doubt, not joint or joint and several obligations.
Section 5.11    Independent Agreement. The obligations of each Purchaser hereunder are several and not joint with the obligations of any other Purchaser, and no provision of this Agreement is intended to confer any obligations on any Purchaser vis-à-vis any other Purchaser. Nothing contained herein, and no action taken by any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.
[Signature Pages Follow.]



43



IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.


COMPANY:
OWLET, INC.
By:/s/ Kurt Workman
Name:Kurt Workman
Title:Chief Executive Officer



[Signature Page to Investment Agreement]


IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.

PURCHASER:
Eclipse Early Growth Fund I, L.P.
By:/s/ Greg Lyon
Name:Greg Lyon
Title:Authorized Signatory

Notice Information:
Address:514 High Street, Suite 4
Palo Alto, CA 94301
Email:[Private Email]

[Signature Page to Investment Agreement]



IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.

PURCHASER:
Trilogy Equity Partners, LLC
By:/s/ Amy N. McCullough
Name:Amy N. McCullough
Title:President and Managing Director

Notice Information:
Address:155 108th Avenue NE
Suite 400
Bellevue, WA 98004
Email:[Private Email]

[Signature Page to Investment Agreement]


IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.

PURCHASER:
John Stanton and Terry Gillespie, TIC
By:/s/ John Stanton
Name:John Stanton
Title:Authorized Signatory
By:/s/ Theresa Gillespie
Name:Theresa Gillespie
Title:Authorized Signatory

Notice Information:
Address:[Private Address]
Email:[Private Email]

[Signature Page to Investment Agreement]


IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.

PURCHASER:
Samuel Thomsen Trust #2
By:/s/ John Stanton
Name:John Stanton
Title:Trustee

Notice Information:
Attention: Dan Dubrow; Mikal Thomsen
Address:155 108th Avenue NE
Suite 400
Bellevue, WA 98004
Email:[Private Email]


[Signature Page to Investment Agreement]


IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.

PURCHASER:
Peter Thomsen Trust #2
By:/s/ John Stanton
Name:John Stanton
Title:Trustee

Notice Information:
Attention: Dan Dubrow; Mikal Thomsen
Address:155 108th Avenue NE
Suite 400
Bellevue, WA 98004
Email:[Private Email]


[Signature Page to Investment Agreement]


IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto or by their respective duly authorized officers, all as of the date first above written.

PURCHASER:
By:/s/ John C. Kim
Name:John C. Kim
Title:

Notice Information:
Address:[Private Address]
Email:[Private Email]




[Signature Page to Investment Agreement]


SCHEDULE 1
SCHEDULE OF PURCHASERS

PurchaserNumber of Preferred Shares to be PurchasedNumber of Shares of Company Common Stock Issuable under WarrantsPurchase Price
Eclipse Early Growth Fund I, L.P.6,0001,166,935$6,000,000
Trilogy Equity Partners, LLC2,286444,601$2,286,000
John Stanton and Terry Gillespie, TIC668129,918$668,000
Samuel Thomsen Trust No. 2234,473$23,000
Peter Thomsen Trust No. 2234,473$23,000
John Kim25048,621$250,000
Total:
9,2501,799,021$9,250,000








EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATION
[Attached]






EXHIBIT B
FORM OF WARRANT
[Attached]






EXHIBIT C
FORM OF JOINDER AGREEMENT
____________, 20__
The undersigned is executing and delivering this Joinder pursuant to that certain Investment Agreement dated as of [•], 2024 (as amended, restated, supplemented or otherwise modified in accordance with the terms thereof, the “Investment Agreement”) by and between Owlet, Inc. and the several Purchasers listed on Schedule 1 thereto and any other Persons who become a party thereto in accordance with the terms thereof. Capitalized terms used but not defined in this Joinder shall have the respective meanings ascribed to such terms in the Investment Agreement.
By executing and delivering this Joinder to the Investment Agreement, the undersigned hereby adopts and approves the Investment Agreement and agrees, effective commencing on the date hereof, to become a party to, and to be bound by and comply with the provisions of, the Investment Agreement applicable to the Purchaser in the same manner as if the undersigned were the original Purchaser signatory to the Investment Agreement.
The undersigned acknowledges and agrees that Sections 5.02, 5.03, 5.05, 5.06, and 5.10 of the Investment Agreement are incorporated herein by reference, mutatis mutandis.
[Signature pages follow]



Accordingly, the undersigned has executed and delivered this Joinder as of the first date written above.
By:
Name:
Title:
Notice Information:
Address:
Email:




[Signature Page to Joinder]
Exhibit 99.1
Owlet Announces $9 Million Private Placement Financing

LEHI, Utah--(BUSINESS WIRE)--February 26, 2024-- Owlet, Inc. (NYSE: OWLT) (“Owlet” or the “Company”) announced today, following recent FDA clearances and strong preliminary fourth quarter results, that it has entered into definitive documentation relating to a sale of shares of its newly issued Series B convertible preferred stock (“Series B preferred stock”) and warrants to purchase its Class A common stock (“common stock”) in a private placement with certain institutional and other accredited investors for gross proceeds to Owlet of approximately $9 million, before deducting offering expenses. The conversion ratio for the Series B preferred stock and exercise price for the warrants reflects a 25% premium to the most recent market closing price on February 23, 2024. The transaction, which involves participation from existing investors, is expected to close on February 28, 2024, subject to customary closing conditions.

Pursuant to the terms of the definitive agreements and the closing of the private placement, Owlet will issue shares of Series B preferred stock that are convertible into approximately 1.2 million shares of common stock. Each purchaser will also receive a warrant to purchase 150% of the number of shares of common stock into which their Series B preferred stock is convertible. The warrants will have a per share exercise price of $7.7125 and will be exercisable by the holder at any time on or after the issuance date for a period of five years.

“As a pioneer of smart infant monitoring, Owlet has built momentum on the back of our two new FDA clearances. This capital is important in supporting that momentum,” said Kurt Workman, Co-founder and CEO. “The Company now has a strong foundation with our new medical devices, expanded distribution and a brand that resonates with parents. I’m grateful for the investors who share our vision and passion for improving pediatric health.”

Workman continued, “I’m proud of the team’s commitment to operating towards achieving a profitable business. We ended the year with over $16 million in cash and cash equivalents and this well-timed capital supports the opportunities ahead for our business as we globally commercialize our two new medical devices.”

Additional details regarding the private placement will be included in a Form 8-K to be filed by Owlet with the Securities and Exchange Commission (“SEC”).

The securities to be issued in the private placement and the underlying shares of common stock issuable upon conversion or exercise of the Series B preferred stock or warrants have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or securities laws of any state or other jurisdiction, and may not be resold absent registration under, or exemption from registration under, the Securities Act. Owlet has agreed to file a registration statement with the SEC registering the resale of the shares of common stock underlying the Series B preferred stock and warrants.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.



Cautionary Note Regarding Forward-Looking Statements

This press release contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), including statements regarding the Company’s estimated financial results for the fourth quarter ended December 31, 2023, the closing of the private placement, use of proceeds from the private placement and Owlet’s potential for long-term growth. Generally, forward-looking statements include the words “estimate,” “may,” “believes,” “plans,” “expects,” “anticipates,” “intends,” “goal,” “potential,” “upcoming,” “outlook,” “guidance,” the negation thereof, or similar expressions, although not all forward-looking statements contain these identifying words. Forward-looking statements are based on the Company’s expectations at the time such statements are made, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. For all such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. The Company’s actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by our forward-looking statements. Many important factors could affect the Company’s future results and cause those results to differ materially from those expressed in or implied by the Company’s forward-looking statements. Such factors include, but are not limited to, risks and uncertainties related to financial results, including risks related to the private placement and the expected timing of closing reported herein, reflect information available to the Company only as of the date of this press release, as well as those set forth in the Company’s other releases, public statements and/or filings with the U.S. Securities and Exchange Commission, including those identified in the “Risk Factors” sections of the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. All future written and oral forward-looking statements attributable to the Company or any person acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Moreover, Owlet operates in an evolving environment. In addition to the factors described above, new risk factors and uncertainties may emerge from time to time, and factors that the Company currently deems immaterial may become material, and it is impossible for the Company to predict such events or how they may affect us. Except as required by federal securities laws, the Company assumes no obligation to update any forward-looking statements after the date of this release as a result of new information, future events or otherwise, although we may do so from time to time. The Company does not endorse any projections regarding future performance, results or events that may be made by third parties.

About Owlet, Inc.

Owlet was founded by a team of parents in 2012. Owlet’s mission is to empower parents with the right information at the right time, to give them more peace of mind and help them find more joy in the journey of parenting. Owlet’s digital parenting platform aims to give parents real-time data and insights to help parents feel calmer and more confident. Owlet believes that every parent deserves peace of mind and the opportunity to feel their well-rested best. Owlet also believes that every child deserves to live a long, happy, and healthy life, and is working to develop products to help further that belief. To learn more, visit www.owletcare.com.



Investor Contacts:
Mike Cavanaugh
ICR Westwicke
Phone: +1.617.877.9641
mike.cavanaugh@westwicke.com

Media Contacts:
pr@owletcare.com
owlet@diffusionpr.com

Source: Owlet, Inc.


v3.24.0.1
Cover
Feb. 25, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Feb. 25, 2024
Entity Registrant Name OWLET, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-39516
Entity Tax Identification Number 85-1615012
Entity Address, Address Line Two Suite 300
Entity Address, City or Town Lehi
Entity Address, State or Province UT
Entity Address, Postal Zip Code 84043
City Area Code 844
Local Phone Number 334-5330
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001816708
Amendment Flag false
Current Fiscal Year End Date --12-31
Entity Address, Address Line One 3300 North Ashton Boulevard
Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Class A Common Stock, $0.0001 par value per share
Trading Symbol OWLT
Security Exchange Name NYSE

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