iSpecimen Inc 8-K, filed Nov 9, 2026
iSpecimen Inc. (ISPC)
About this 8-K
iSpecimen Inc filed this 8-K on November 9, 2026, reporting on events of November 5, 2026.
Items reported
- Item 1.01: Entered into a material agreement
- Item 3.02: Unregistered sale of equity
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01. Entry into a Material Definitive Agreement.
On November 6, 2026, iSpecimen Inc. (the “Company”) entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Purchasers”) for the issuance and sale, in a private placement (the “Offering”), of 500 shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”), at a purchase price of $800 per share, and a $1,000 stated value per share, for aggregate gross proceeds of $400,000. The closing of the Offering occurred on or about November 6, 2026. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes.
The rights, preferences and limitations of the Series D Preferred Stock are set forth in the Certificate of Designations of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (the “Certificate of Designations”) described in Item 5.03 below. The Series D Preferred Stock is convertible at the holder’s option, at any time, into a number of shares of Common Stock equal to the stated value plus accrued and unpaid dividends divided by a conversion price equal to the greater of 85% of the closing price of the Common Stock on the trading day immediately preceding the conversion date and the $0.1616 floor price (subject to adjustment for stock splits, stock dividends and similar events), accrues cumulative dividends at 8% per annum payable quarterly in cash or, subject to applicable equity conditions, in shares of Common Stock, and is subject to a 4.99% beneficial ownership limitation, which a holder may increase to up to 9.99% upon 61 days’ notice. A majority of the outstanding shares of Series D Preferred Stock is required to amend the Certificate of Designations or the Company’s charter documents in a manner that adversely affects the Series D Preferred Stock, to authorize any senior class of capital stock or to increase the authorized number of shares of Series D Preferred Stock. Unless and until stockholder approval under Nasdaq Listing Rule 5635(d) is obtained, issuances of Common Stock under the transaction documents are subject to an exchange cap of 1,157,223 shares, representing 19.99% of the 5,789,013 shares of Common Stock outstanding immediately before execution of the Securities Purchase Agreement. The Company may optionally redeem the Series D Preferred Stock, in whole or in part, at any time after six months following the original issue date, for cash at 110% of stated value through the first anniversary of the original issue date and 105% thereafter, plus accrued and unpaid dividends, subject to the satisfaction of the equity conditions and the other requirements of the Certificate of Designations.
The Securities Purchase Agreement contains customary representations, warranties and covenants of the Company and the Purchasers.
In connection with the Offering, the Company entered into a registration rights agreement with the Purchasers, dated as of November 6, 2026 (the “Registration Rights Agreement”), pursuant to which the Company agreed to file a registration statement covering the resale of the shares of Common Stock issuable upon conversion of, and as dividends on, the Series D Preferred Stock within 30 calendar days after the closing and to use commercially reasonable efforts to cause the registration statement to be declared effective within 75 calendar days after the closing (or 120 calendar days in the event of a full review by the Securities and Exchange Commission).
On November 5, 2026, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with E.F. Hutton & Co. (the “Placement Agent”), pursuant to which the Placement Agent served as the exclusive placement agent for the Offering on a reasonable best efforts basis. The Company agreed to pay the Placement Agent a cash fee equal to 4.0% of the gross proceeds of the Offering and a non-accountable expense allowance equal to 1.0% of the gross proceeds of the Offering, and to reimburse the Placement Agent’s accountable out-of-pocket expenses, and legal fees up to $80,000.
Pursuant to the Securities Purchase Agreement and the Placement Agency Agreement, each of the Company’s directors and executive officers entered into a lock-up agreement (the “Lock-Up Agreements”) pursuant to which they agreed, subject to customary exceptions, not to offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any securities of the Company for a period of 90 days following the closing of the Offering.
The foregoing descriptions of the Certificate of Designations, the Securities Purchase Agreement, the Registration Rights Agreement, the Placement Agency Agreement and the Lock-Up Agreements do not purport to be complete and are qualified in their entirety by reference to the full text of such documents, copies of which are filed as Exhibits 3.1, 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The representations and warranties in the transaction documents were made solely for purposes of those agreements and for the benefit of the parties thereto, as of specified dates, and are subject to agreed qualifications and limitations; they are not necessarily statements of fact and should not be relied upon as such.
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 Series D Preferred Stock was offered and sold to accredited investors in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) of Regulation D promulgated thereunder, without any form of general solicitation or general advertising. Each Purchaser represented that it is an “accredited investor” as defined in Rule 501(a) of Regulation D and that it acquired the securities for investment and not with a view to any distribution thereof in violation of the Securities Act. Neither the Series D Preferred Stock nor the shares of Common Stock issuable upon conversion of or as dividends on the Series D Preferred Stock have been registered under the Securities Act or applicable state securities laws, and such securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. Unless and until stockholder approval is obtained, the maximum number of shares of Common Stock issuable upon conversion of, and as dividends on, the Series D Preferred Stock is 1,157,223 shares, as described in Item 1.01.
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Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On November 6, 2026, the Company filed the Certificate of Designations with the Secretary of State of the State of Delaware, establishing the rights, preferences and limitations of up to 2,000 shares of Series D Preferred Stock. The information set forth in Item 1.01 of this Current Report on Form 8-K regarding the terms of the Series D Preferred Stock is incorporated by reference into this Item 5.03. The foregoing description of the Certificate of Designations does not purport to be complete and is qualified in its entirety by reference to the full text of the Certificate of Designations, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Schedules and exhibits to the agreements have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.
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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.
Dated: November 9, 2026
| iSPECIMEN INC. | |||
| By: | /s/ Shahin Behroyan | ||
| Name: | Shahin Behroyan | ||
| Title: | Chief Executive Officer | ||
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wExhibit 3.1
CERTIFICATE OF DESIGNATIONS OF PREFERENCES, RIGHTS AND LIMITATIONS
OF
SERIES D CONVERTIBLE PREFERRED STOCK
OF
iSPECIMEN INC.
PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW
The undersigned, Shahin Behroyan, does hereby certify that:
1. He is the Chief Executive Officer of iSpecimen Inc., a Delaware corporation (the “Corporation”).
2. The Corporation is authorized to issue 50,000,000 shares of preferred stock, par value $0.0001 per share, none of which are issued and outstanding as of the date hereof.
3. The following resolutions were duly adopted by the Board of Directors of the Corporation (the “Board of Directors”) on November 5, 2026:
WHEREAS, the Fifth Amended and Restated Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”) provides for a class of its authorized stock known as preferred stock, consisting of 50,000,000 shares, $0.0001 par value per share, issuable from time to time in one or more series;
WHEREAS, the Board of Directors is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any series and the designation thereof, of any of them; and
WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the preferred stock, which shall consist of up to 2,000 shares of the preferred stock which the Corporation has the authority to issue, as follows:
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of preferred stock as follows:
TERMS OF PREFERRED STOCK
Section 1. Definitions.
For the purposes hereof, the following terms shall have the following meanings:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Alternate Consideration” shall have the meaning set forth in Section 7(d).
“Attribution Parties” shall have the meaning set forth in Section 6(d).
“Beneficial Ownership Limitation” shall have the meaning set forth in Section 6(d).
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Buy-In” shall have the meaning set forth in Section 6(c)(iv).
“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto and all conditions precedent to the Holders’ obligations to pay the Subscription Amount and the Corporation’s obligations to deliver the Preferred Stock have been satisfied or waived.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the Corporation’s common stock, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Corporation or its Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion Amount” means, with respect to any shares of Preferred Stock being converted, the sum of (a) the Stated Value of such shares and (b) all accrued and unpaid dividends thereon through the applicable Conversion Date, in each case excluding amounts previously paid and any fees, liquidated damages or other amounts not expressly included in this definition.
“Conversion Date” shall have the meaning set forth in Section 6(a).
“Conversion Price” shall have the meaning set forth in Section 6(b).
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Preferred Stock in accordance with the terms hereof.
“Dividend Payment Date” shall have the meaning set forth in Section 3(a).
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“Equity Conditions” means, during the period in question, (a) the Corporation shall have duly honored all conversions and redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder, if any, (b) all liquidated damages and other amounts owing to the applicable Holder in respect of the Preferred Stock shall have been paid, (c) there is an effective Registration Statement pursuant to which the Holders are permitted to utilize the prospectus thereunder to resell all of the shares of Common Stock issuable pursuant to the Transaction Documents or all of such shares may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Corporation to be in compliance with the current public information requirements under Rule 144, (d) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market, (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of Common Stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) the issuance of the shares in question to the applicable Holder would not violate the limitations set forth in Section 6(d) or Section 6(e), (g) there has been no public announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (h) the applicable Holder is not in possession of any information provided by the Corporation, any of its Subsidiaries, or any of their officers, directors, employees, agents or Affiliates, that constitutes, or may constitute, material non-public information, and (i) no Triggering Event shall have occurred and be continuing.
“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Corporation pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, for services rendered to the Corporation, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of the Purchase Agreement (including the securities issued pursuant to the Prior Transaction Documents), provided that such securities have not been amended since the date of the Purchase Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Corporation, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.14 of the Purchase Agreement, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Corporation and shall provide to the Corporation additional benefits in addition to the investment of funds, but shall not include a transaction in which the Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. For the avoidance of doubt, an “Exempt Issuance” shall not include any Variable Rate Transaction (as defined in the Purchase Agreement).
“Floor Price” means $0.1616, which amount equals 20% of the closing price (representing an 80% discount to such closing price) of the Common Stock on the principal Trading Market, as reported by Bloomberg L.P., on the Trading Day immediately preceding the date of the Purchase Agreement, subject to adjustment pursuant to Section 7(a).
“Exchange Cap” shall have the meaning set forth in Section 6(e).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Fundamental Transaction” shall have the meaning set forth in Section 7(d).
“GAAP” means United States generally accepted accounting principles.
“Holder” shall have the meaning given such term in Section 2.
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“Junior Securities” means the Common Stock and all other Common Stock Equivalents of the Corporation other than those securities which are explicitly senior or pari passu to the Preferred Stock in dividend rights or liquidation preference.
“Liquidation” shall have the meaning set forth in Section 5.
“New York Courts” shall have the meaning set forth in Section 10(d).
“Notice of Conversion” shall have the meaning set forth in Section 6(a).
“Optional Redemption Amount,” “Optional Redemption Date,” “Optional Redemption Notice,” “Optional Redemption Notice Date” and “Optional Redemption Percentage” shall have the meanings set forth in Section 8(a).
“Original Issue Date” means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred Stock” shall have the meaning set forth in Section 2.
“Prior Purchase Agreement” means that certain Securities Purchase Agreement, dated as of May 8, 2026, by and among the Corporation and the purchasers party thereto.
“Prior Transaction Documents” means the Prior Purchase Agreement and the “Transaction Documents” as defined therein.
“Purchase Agreement” means the Securities Purchase Agreement, dated as of November 6, 2026, among the Corporation and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date of the Purchase Agreement, among the Corporation and the original Holders, in the form of Exhibit B attached to the Purchase Agreement.
“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale of the Conversion Shares by each Holder as provided for in the Registration Rights Agreement.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Securities” means the Preferred Stock and the Conversion Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Share Delivery Date” shall have the meaning set forth in Section 6(c)(i).
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“Stated Value” shall have the meaning set forth in Section 2, as adjusted only as expressly provided in this Certificate of Designations.
“Stockholder Approval” shall have the meaning set forth in the Purchase Agreement.
“Subscription Amount” shall mean, as to each Holder, the aggregate amount to be paid for the Preferred Stock purchased pursuant to the Purchase Agreement, as specified below such Holder’s name on the signature page of the Purchase Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.
“Subsidiary” means any subsidiary of the Corporation as set forth in the Purchase Agreement and shall, where applicable, also include any direct or indirect subsidiary of the Corporation formed or acquired after the date of the Purchase Agreement.
“Successor Entity” shall have the meaning set forth in Section 7(d).
“Trading Day” means a day on which the principal Trading Market is open for business.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” shall have the meaning set forth in the Purchase Agreement.
“Transfer Agent” means Broadridge Corporate Issuer Solutions, LLC, and any successor transfer agent of the Corporation.
“Triggering Event” shall have the meaning set forth in Section 8(b).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Preferred Stock then outstanding and reasonably acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation.
Section 2. Designation, Amount and Par Value.
The series of preferred stock shall be designated as the Corporation’s Series D Convertible Preferred Stock (the “Preferred Stock”) and the number of shares so designated shall be up to 2,000 (which shall not be subject to increase without the written consent of the Holders of a majority of the then outstanding shares of Preferred Stock (each, a “Holder” and collectively, the “Holders”)). Each share of Preferred Stock shall have a par value of $0.0001 per share and a stated value equal to One Thousand Dollars ($1,000.00) (the “Stated Value”). The Preferred Stock shall be issued in book-entry form on the records of the Transfer Agent or, at the request of a Holder, in certificated form.
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Section 3. Dividends.
(a) Dividends in Cash or in Kind. Holders shall be entitled to receive, and the Corporation shall pay, cumulative dividends at the rate per share (as a percentage of the Stated Value per share) of eight percent (8%) per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on the first such date after the Original Issue Date, on each Conversion Date (with respect only to Preferred Stock being converted) and on the date on which the Preferred Stock is redeemed (each such date, a “Dividend Payment Date”) (if any Dividend Payment Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day) in cash, or at the Corporation’s option, in duly authorized, validly issued, fully paid and non-assessable shares of Common Stock, or a combination thereof (the amount to be paid in shares of Common Stock, the “Dividend Share Amount”); provided that the Corporation may pay dividends in shares of Common Stock only if (i) all of the Equity Conditions have been met during the twenty (20) consecutive Trading Days immediately prior to the applicable Dividend Payment Date, (ii) the Corporation has delivered written notice of its election to pay dividends in shares of Common Stock not less than ten (10) Trading Days prior to the applicable Dividend Payment Date and (iii) such issuance would not exceed the Exchange Cap. Dividends on the Preferred Stock shall be calculated on the basis of a 360-day year, consisting of twelve (12) thirty (30) calendar day periods, and shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date whether or not earned or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of dividends. Dividends payable in shares of Common Stock shall be valued at eighty percent (80%) of the average of the VWAPs for the ten (10) consecutive Trading Days ending on the Trading Day immediately prior to the applicable Dividend Payment Date.
(b) Participation. Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of Preferred Stock equal (on an as-if-converted-to-Common-Stock basis, without regard to the Beneficial Ownership Limitation or the Exchange Cap) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid on shares of the Common Stock. No other dividends shall be paid on shares of Preferred Stock, and the Corporation shall pay no dividends (other than dividends in the form of Common Stock) on shares of the Common Stock unless it simultaneously complies with the previous sentence.
(c) No Dividends on Junior Securities. So long as any shares of Preferred Stock remain outstanding, the Corporation shall not redeem, purchase or otherwise acquire directly or indirectly any Junior Securities except as expressly permitted by Section 9, nor shall the Corporation directly or indirectly pay or declare any dividend or make any distribution upon any Junior Securities, other than as set forth in Section 3(b), so long as any dividends due on the Preferred Stock remain unpaid.
Section 4. Voting Rights.
Except as otherwise provided herein or as otherwise required by law, the Preferred Stock shall have no voting rights. However, as long as any shares of Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote or written consent of the Holders of a majority of the then outstanding shares of Preferred Stock, (a) amend this Certificate of Designations, the Certificate of Incorporation or other charter documents of the Corporation in a manner that materially and adversely affects the powers, preferences or rights of the Preferred Stock, (b) authorize or create any class or series of capital stock that ranks senior to the Preferred Stock as to dividends or distributions upon a Liquidation, (c) increase the number of authorized shares of Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.
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Section 5. Liquidation.
Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Corporation, for each share of Preferred Stock, an amount equal to the greater of (a) the Stated Value plus any accrued and unpaid dividends thereon and (b) the amount such Holder would have received in such Liquidation had such share of Preferred Stock been converted into Common Stock immediately prior thereto (without regard to the Beneficial Ownership Limitation or the Exchange Cap), before any distribution or payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be ratably distributed among the Holders in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or Change of Control Transaction shall not be deemed a Liquidation. The Corporation shall mail written notice of any such Liquidation, not less than forty-five (45) days prior to the payment date stated therein, to each Holder.
Section 6. Conversion.
(a) Conversions at Option of Holder. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date, at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations set forth in Section 6(d) and Section 6(e)) determined by dividing the Conversion Amount of such share of Preferred Stock by the Conversion Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by email such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Preferred Stock, a Holder shall not be required to surrender the certificate(s), if any, representing the shares of Preferred Stock to the Corporation unless all of the shares of Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Preferred Stock promptly following the Conversion Date at issue. Shares of Preferred Stock converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.
(b) Conversion Price. The conversion price for the Preferred Stock in effect on any Conversion Date shall equal the greater of (i) 85% of the closing price of the Common Stock on the principal Trading Market, as reported by Bloomberg L.P., on the Trading Day immediately preceding such Conversion Date and (ii) the Floor Price (the “Conversion Price”).
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(c) Mechanics of Conversion.
(i) Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (A) two (2) Trading Days and (B) the number of Trading Days comprising the Standard Settlement Period (as defined below), in each case after each Conversion Date (the “Share Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder the number of Conversion Shares being acquired upon the conversion of the Preferred Stock, which Conversion Shares shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) if a Registration Statement covering the resale of the Conversion Shares is then effective or the Conversion Shares are then eligible for resale under Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Corporation to be in compliance with the current public information requirements thereunder. The Corporation shall deliver the Conversion Shares required to be delivered by the Corporation under this Section 6 electronically through the Depository Trust Company or another established clearing corporation performing similar functions if the Conversion Shares may be so delivered. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Corporation’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Conversion.
(ii) Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such conversion, in which event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation and the Holder shall promptly return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded Notice of Conversion.
(iii) Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Preferred Stock in accordance with the terms hereof is absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall be subject to the limitations set forth in Section 6(d) and Section 6(e). In the event a Holder shall elect to convert any or all of the Stated Value of its Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the Preferred Stock of such Holder shall have been sought and obtained, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the Stated Value of Preferred Stock which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If the Corporation fails to deliver to a Holder such Conversion Shares pursuant to Section 6(c)(i) by the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Stated Value of Preferred Stock being converted, $50 per Trading Day (increasing to $100 per Trading Day on the third (3rd) Trading Day and increasing to $200 per Trading Day on the sixth (6th) Trading Day after such damages begin to accrue) for each Trading Day after the Share Delivery Date until such Conversion Shares are delivered or the Holder rescinds such conversion; provided that the aggregate liquidated damages payable under this Section 6(c)(iii) shall not exceed 10% of the Stated Value of the Preferred Stock being converted. Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
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(iv) Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. If the Corporation fails to deliver to a Holder the applicable Conversion Shares by the Share Delivery Date pursuant to Section 6(c)(i), and if, after such Share Delivery Date, such Holder completes a bona fide open-market purchase solely to cover a sale of the Conversion Shares that the Holder was entitled to receive upon the applicable conversion (a “Buy-In”), then the Corporation shall reimburse such Holder for the documented, reasonable and out-of-pocket amount, if any, by which the purchase price for the shares purchased in the Buy-In, excluding brokerage commissions and other transaction costs, exceeds the proceeds received by the Holder from the corresponding sale of the Conversion Shares, provided that the Holder shall use commercially reasonable efforts to mitigate its losses and the Holder shall not be entitled to duplicate recovery under this Section 6(c)(iv) or any other provision hereof. The Holder shall provide the Corporation written notice of the Buy-In and, upon request, reasonable supporting documentation of the purchase and corresponding sale. No amount shall be payable to the extent the failure to deliver Conversion Shares resulted from the Holder’s failure to provide information or instructions reasonably required for delivery.
(v) Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Preferred Stock and payment of dividends on the Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders, not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Preferred Stock and payment of dividends hereunder, in each case as required by Section 4.9 of the Purchase Agreement. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable and, if the Registration Statement is then effective under the Securities Act, shall be registered for public resale in accordance with such Registration Statement.
(vi) Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.
(vii) Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of the Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.
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(d) Beneficial Ownership Limitation. The Corporation shall not effect any conversion of the Preferred Stock, and a Holder shall not have the right to convert any portion of the Preferred Stock, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as a group together with such Holder or any of such Holder’s Affiliates (such Persons, “Attribution Parties”)) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by such Holder and its Affiliates and Attribution Parties shall include the number of shares of Common Stock issuable upon conversion of the Preferred Stock with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Stated Value of Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, the Preferred Stock) beneficially owned by such Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Corporation is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Preferred Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and of how many shares of Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Preferred Stock may be converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how many shares of the Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this Section 6(d), and the Corporation shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (A) the Corporation’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Corporation or (C) a more recent written notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Corporation shall within one (1) Trading Day confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Corporation, including the Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of Preferred Stock held by the applicable Holder. A Holder, upon notice to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to its Preferred Stock, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of Preferred Stock held by the Holder and the provisions of this Section 6(d) shall continue to apply. Any such increase in the Beneficial Ownership Limitation will not be effective until the sixty-first (61st) day after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder. The provisions of this Section 6(d) shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d) to correct this Section 6(d) (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this Section 6(d) shall apply to a successor holder of Preferred Stock.
(e) Exchange Cap. Notwithstanding anything herein to the contrary, unless and until the Stockholder Approval has been obtained, the Corporation shall not issue, and no Holder shall have the right to receive, upon conversion of the Preferred Stock, in payment of dividends hereunder or otherwise pursuant to the Transaction Documents, any shares of Common Stock to the extent that, after giving effect to such issuance, the aggregate number of shares of Common Stock issued pursuant to the Transaction Documents would exceed 1,157,223 shares of Common Stock, which number represents 19.99% of the 5,789,013 shares of Common Stock issued and outstanding immediately prior to the execution of the Purchase Agreement, subject to adjustment for any reverse or forward stock split, stock dividend, stock combination or other similar transaction occurring after the date of the Purchase Agreement (the “Exchange Cap”). The Exchange Cap shall be allocated among the Holders pro rata based on their respective Subscription Amounts, and any conversion that would exceed a Holder’s allocated portion of the Exchange Cap shall be effected only to the extent of such allocation, with the remainder of such Holder’s Preferred Stock remaining outstanding and convertible if and when the Stockholder Approval is obtained. The Conversion Price (including as determined pursuant to Section 8(c)) shall apply in accordance with its terms, provided that no shares of Common Stock shall be issued in excess of the Exchange Cap unless and until the Stockholder Approval has been obtained.
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Section 7. Certain Adjustments.
(a) Stock Dividends and Stock Splits. If the Corporation, at any time while this Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, this Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the Floor Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of shares of Preferred Stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation and the Exchange Cap) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation or the Exchange Cap, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation or the Exchange Cap).
(c) Pro Rata Distributions. During such time as this Preferred Stock is outstanding, if the Corporation declares or makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Preferred Stock, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Preferred Stock (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation and the Exchange Cap) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation or the Exchange Cap, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation or the Exchange Cap).
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(d) Fundamental Transaction. If, at any time while this Preferred Stock is outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each, a “Fundamental Transaction”), then, upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 6(d) or Section 6(e) on the conversion of this Preferred Stock), the number of shares of Common Stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Preferred Stock is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 6(d) or Section 6(e) on the conversion of this Preferred Stock). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designations with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Corporation under this Certificate of Designations and the other Transaction Documents in accordance with the provisions of this Section 7(d) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Certificate of Designations which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Preferred Stock (without regard to any limitations on the conversion of this Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Preferred Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designations and the other Transaction Documents referring to the “Corporation” shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Certificate of Designations and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.
(e) Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
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(f) Notice to the Holders.
(i) Adjustment to Floor Price. Whenever the Floor Price is adjusted pursuant to any provision of this Section 7, the Corporation shall promptly deliver to each Holder by email a notice setting forth the Floor Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of this Preferred Stock, and shall cause to be delivered by email to each Holder at its last email address as it shall appear upon the stock books of the Corporation, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation or any of the Subsidiaries, the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of this Preferred Stock (or any part hereof) during the twenty (20)-day period commencing on the date of such notice through the effective date of the event triggering such notice, except as may otherwise be expressly set forth herein.
Section 8. Redemption; Triggering Events.
(a) Optional Redemption at Election of Corporation. Subject to the provisions of this Section 8(a), at any time after the date that is six (6) months following the Original Issue Date, the Corporation may deliver a notice to the Holders (an “Optional Redemption Notice” and the date such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to redeem some or all of the then outstanding Preferred Stock, for cash in an amount equal to the Optional Redemption Percentage of the Stated Value, plus all accrued but unpaid dividends thereon (the “Optional Redemption Amount”), on the twentieth (20th) Trading Day following the Optional Redemption Notice Date (such date, the “Optional Redemption Date”). “Optional Redemption Percentage” means 110% if the Optional Redemption Notice Date occurs on or prior to the first anniversary of the Original Issue Date and 105% thereafter. The Optional Redemption Amount is payable in full on the Optional Redemption Date. The Corporation may only effect an Optional Redemption if each of the Equity Conditions shall have been met on each Trading Day during the twenty (20) Trading Days immediately preceding the Optional Redemption Notice Date and on each Trading Day during the period commencing on the Optional Redemption Notice Date through to the Optional Redemption Date and through and including the date payment of the Optional Redemption Amount is actually made in full. If any of the Equity Conditions shall cease to be satisfied at any time during such period, then a Holder may elect to nullify the Optional Redemption Notice as to such Holder by notice to the Corporation within three (3) Trading Days after the first day on which any such Equity Condition has not been met (provided that if, by a provision of the Transaction Documents, the Corporation is obligated to notify the Holders of the non-existence of an Equity Condition, such notice period shall be extended to the third (3rd) Trading Day after proper notice from the Corporation) in which case the Optional Redemption Notice shall be null and void, ab initio. The Corporation covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the Optional Redemption Notice through the date all amounts owing thereon are due and paid in full, and the Holders shall be entitled to convert any or all of the Preferred Stock subject to an Optional Redemption Notice at any time prior to the Optional Redemption Date. The Corporation may not deliver more than one Optional Redemption Notice in any ninety (90) day period. The Corporation’s determination to pay an Optional Redemption in cash shall be applied ratably to all of the Holders based on their (or their predecessor’s) initial purchases of Preferred Stock pursuant to the Purchase Agreement.
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(b) Triggering Events. “Triggering Event” means, wherever used herein, any of the following material events, in each case subject to the applicable notice and cure periods set forth below:
(i) the Corporation shall fail to deliver Conversion Shares issuable upon a conversion hereunder that comply with the provisions hereof within five (5) Trading Days after the applicable Share Delivery Date, and such failure shall continue for five (5) additional Trading Days after the Corporation receives written notice of such failure from the applicable Holder; provided that no Triggering Event shall occur to the extent the failure results from the limitations in Section 6(d) or Section 6(e);
(ii) the Corporation shall fail to have available a sufficient number of authorized and unreserved shares of Common Stock to issue to a Holder upon a conversion hereunder, and such failure shall continue for ten (10) Trading Days after the Corporation receives written notice of such failure; provided that no Triggering Event shall occur to the extent the shortfall results from the limitations in Section 6(d) or Section 6(e) or from the applicable Holder’s failure to provide information reasonably required for issuance;
(iii) the Corporation shall materially breach any covenant, agreement or warranty contained in this Certificate of Designations or the other Transaction Documents, and such breach, if capable of cure, shall not have been cured within thirty (30) calendar days after the date on which written notice of such breach shall have been delivered; provided that any failure to pay an undisputed monetary amount when due shall be subject to a ten (10) Trading Day cure period;
(iv) the Corporation shall declare or pay any dividend or distribution on, or redeem or repurchase, any Junior Securities in violation of Section 3 or Section 9 and, if capable of cure, such violation shall not have been cured within ten (10) Trading Days after the Corporation receives written notice thereof;
(v) the Corporation shall consummate a Change of Control Transaction and fail to comply in all material respects with the requirements of Section 7(d);
(vi) there shall have occurred a Bankruptcy Event;
(vii) the Common Stock shall fail to be listed or quoted for trading on a Trading Market for more than five (5) Trading Days, which need not be consecutive Trading Days;
(viii) any monetary judgment, writ or similar final process shall be entered or filed against the Corporation, any Subsidiary or any of their respective property or other assets for more than $250,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of forty-five (45) calendar days.
For purposes hereof, “Bankruptcy Event” means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Corporation or any Significant Subsidiary thereof, (b) there is commenced against the Corporation or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within sixty (60) days after commencement, (c) the Corporation or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment, (e) the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Corporation or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Corporation or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
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For purposes hereof, “Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise) of in excess of 50% of the voting securities of the Corporation (other than by means of conversion or exercise of Preferred Stock and the Securities issued together with the Preferred Stock), (b) the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates with the Corporation and, after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction own less than 50% of the aggregate voting power of the Corporation or the successor entity of such transaction, (c) the Corporation sells or transfers all or substantially all of its assets to another Person and the stockholders of the Corporation immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three (3) year period of more than one-half of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the Original Issue Date), or (e) the execution by the Corporation of an agreement to which the Corporation is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
(c) Remedies Upon Triggering Events. Upon the occurrence of a Triggering Event (after giving effect to any applicable notice and cure period set forth in Section 8(b)) and for so long as such Triggering Event continues, the following adjustments shall apply automatically, without any action on the part of any Holder, to all shares of Preferred Stock then outstanding: (i) notwithstanding Section 6(b), the Conversion Price in effect on any Conversion Date occurring during the continuance of such Triggering Event shall equal the greater of (A) 80% of the lower of (1) the closing price of the Common Stock on the principal Trading Market on the Trading Day immediately preceding such Conversion Date and (2) the average of the VWAPs for the five (5) consecutive Trading Days ending on the Trading Day immediately preceding such Conversion Date and (B) the Floor Price, provided that the adjustment in this clause (i) shall become effective only if and when the Stockholder Approval has been obtained, and until such time the Conversion Price shall continue to be determined in accordance with Section 6(b); and (ii) the dividend rate set forth in Section 3(a) shall be increased by 2% per annum, accruing from the date of such Triggering Event and payable in accordance with Section 3(a). If a Triggering Event that is capable of cure is cured by the Corporation and no other Triggering Event is then continuing, then, from and after the date of such cure (the “Cure Date”), (A) the Conversion Price shall again be determined in accordance with Section 6(b), and (B) the dividend rate shall revert to the rate set forth in Section 3(a); provided that no conversion effected, and no dividends accrued, prior to the Cure Date shall be rescinded, reduced or otherwise affected by such cure. The Corporation shall deliver written notice to the Holders of the occurrence of a Triggering Event, and of the resulting adjustments, within one (1) Trading Day after the Corporation becomes aware thereof, and any Holder may deliver written notice to the Corporation of the occurrence of a Triggering Event; the failure of the Corporation to deliver such notice shall not affect the effectiveness of the adjustments. The foregoing adjustments shall be the sole remedy of the Holders under this Certificate of Designations with respect to a Triggering Event, without limiting any rights or remedies of the Holders under the other Transaction Documents (including any liquidated damages payable under the Purchase Agreement and the Registration Rights Agreement) or under applicable law; the Corporation shall not be required to redeem or repurchase any Preferred Stock, or to pay any cash or interest, by reason of a Triggering Event; and all issuances of Common Stock resulting from the adjustments shall be subject to Section 6(d) and Section 6(e). If a Triggering Event occurs, the Corporation shall include a proposal to obtain the Stockholder Approval in the proxy statement for its next annual or special meeting of stockholders following such Triggering Event and shall use its commercially reasonable efforts to obtain the Stockholder Approval.
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Section 9. Negative Covenants.
As long as any shares of Preferred Stock are outstanding, unless the Holders of at least a majority in Stated Value of the then outstanding shares of Preferred Stock shall have otherwise given prior written consent, the Corporation shall not, and shall not permit any of the Subsidiaries to, directly or indirectly: (a) amend this Certificate of Designations, the Certificate of Incorporation or the bylaws in a manner that materially and adversely affects the powers, preferences or rights of the Preferred Stock; (b) authorize or create any class or series of capital stock that ranks senior to the Preferred Stock as to dividends or distributions upon a Liquidation; (c) increase the number of authorized shares of Preferred Stock; or (d) enter into any agreement with respect to any of the foregoing.
Section 10. Miscellaneous.
(a) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address set forth above, Attention: Chief Executive Officer, email: sbehroyan@ispecimen.com, or such other email address or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 10(a). Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by email, or sent by a nationally recognized overnight courier service addressed to each Holder at the email address or address of such Holder appearing on the books of the Corporation, or if no such email address or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via email at the email address set forth in this Section 10(a) prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via email at the email address set forth in this Section 10(a) on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
(b) Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designations shall alter or impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages, accrued dividends and accrued interest, as applicable, on the shares of Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
(c) Lost or Mutilated Preferred Stock Certificate. If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.
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(d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designations shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Certificate of Designations and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designations or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
(e) Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designations 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 Designations or a waiver by any other Holder. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designations 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 Designations on any other occasion. Any waiver by the Corporation or a Holder must be in writing.
(f) Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.
(g) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
(h) Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.
(i) Status of Converted or Redeemed Preferred Stock. Shares of Preferred Stock may only be issued pursuant to the Purchase Agreement. If any shares of Preferred Stock shall be converted, redeemed or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series D Convertible Preferred Stock.
*********************
RESOLVED, FURTHER, that the Chief Executive Officer, the Chief Financial Officer or any other officer of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designations of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Delaware law.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned has executed this Certificate of Designations this 6th day of November, 2026.
| iSPECIMEN INC. | ||
| By: | ||
| Name: | Shahin Behroyan | |
| Title: | Chief Executive Officer | |
[Signature Page to Certificate of Designations]
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ANNEX A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF PREFERRED STOCK)
The undersigned hereby elects to convert the number of shares of Series D Convertible Preferred Stock indicated below into shares of common stock, par value $0.0001 per share (the “Common Stock”), of iSpecimen Inc., a Delaware corporation (the “Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation in accordance with the Purchase Agreement. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
Conversion calculations:
Date to Effect Conversion: ____________________________________________________________________
Number of shares of Preferred Stock owned prior to Conversion: _____________________________________
Number of shares of Preferred Stock to be Converted: ______________________________________________
Stated Value of shares of Preferred Stock to be Converted: ___________________________________________
Accrued and unpaid dividends on shares of Preferred Stock to be Converted: ____________________________
Conversion Amount:
Number of shares of Common Stock to be Issued: __________________________________________________
Applicable Conversion Price: __________________________________________________________________
Number of shares of Preferred Stock subsequent to Conversion: _______________________________________
Address for Delivery: _________________________________________________________________________
or DWAC Instructions: Broker No.: Account No.: __________________________________________
The undersigned represents that the conversion effected hereby does not (a) cause the undersigned, together with its Affiliates and Attribution Parties, to exceed the Beneficial Ownership Limitation or (b) exceed the undersigned’s allocated portion of the Exchange Cap (unless the Stockholder Approval has been obtained).
| [HOLDER] | ||
| By: | ||
| Name: | ||
| Title: | ||
| Date: | ||
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Exhibit 10.1
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of November 6, 2026, by and among iSpecimen Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”).
RECITALS
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement;
WHEREAS, the Company has authorized a new series of convertible preferred stock of the Company designated as Series D Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), having a stated value of One Thousand Dollars ($1,000.00) per share (the “Stated Value”), which Preferred Stock shall be convertible into shares of Common Stock (the “Conversion Shares”) in accordance with the terms of the Certificate of Designations of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, in the form attached hereto as Exhibit A (the “Certificate of Designations”);
WHEREAS, the Company desires to sell 500 shares of Preferred Stock at a purchase price of Eight Hundred Dollars ($800.00) per share, reflecting an original issue discount of twenty percent (20%) to the Stated Value (the “Per Share Purchase Price”), for aggregate gross proceeds of Four Hundred Thousand Dollars ($400,000), to the Purchasers upon the terms and subject to the conditions contained in this Agreement;
WHEREAS, the Company previously issued and sold shares of Common Stock and pre-funded warrants to purchase shares of Common Stock pursuant to that certain Securities Purchase Agreement, dated as of May 8, 2026, by and among the Company and the purchasers party thereto (the “Prior Purchase Agreement” and the transactions contemplated thereby, the “Prior Placement”);
WHEREAS, each Purchaser desires to purchase, and the Company desires to sell, upon the terms and conditions set forth herein, such number of shares of Preferred Stock as is specified below such Purchaser’s name on the signature page of this Agreement.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
For the purposes of this Agreement, the following words and phrases shall have the meanings set forth in this Section 1.1:
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.
“Action” shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Exchange Cap” shall have the meaning ascribed to such term in Section 4.19.
“Agreement” shall have the meaning ascribed to such term in the preamble.
“Applicable Amount” shall have the meaning ascribed to such term in Section 4.2(b).
“Beneficial Ownership Limitation” shall have the meaning ascribed to such term in the Certificate of Designations.
“BHCA” shall have the meaning ascribed to such term in Section 3.1(pp).
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in The City of New York are authorized or required by law to remain closed.
“Certificate of Designations” shall have the meaning ascribed to such term in the recitals.
“Charter” means the Fifth Amended and Restated Certificate of Incorporation of the Company, as amended and in effect from time to time, including the Certificate of Designations.
“Closing” shall have the meaning ascribed to such term in Section 2.2.
“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities to be issued and sold, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day following the date hereof.
“Closing Price” means, for any security on any Trading Day, (i) the official closing price for such security on the Principal Market, as reported by Bloomberg L.P. or, if not available, as reported by The Nasdaq Stock Market LLC (“Nasdaq”) (or any successor), or (ii) if no such trade price is available for that Trading Day, the fair market value of such security as determined in good faith by the Board of Directors.
“Commission” or “SEC” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Common Stock Equivalents” means any securities of the Company or its Subsidiaries which would entitle the holder thereof to acquire Common Stock at any time, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
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“Company” shall have the meaning ascribed to such term in the preamble.
“Conversion Price” shall have the meaning ascribed to such term in the Certificate of Designations.
“Conversion Shares” shall have the meaning ascribed to such term in the recitals.
“Disclosure Schedules” means the disclosure schedules of the Company delivered concurrently herewith.
“Disqualification Event” shall have the meaning ascribed to such term in Section 3.1(ll).
“DTC” shall have the meaning ascribed to such term in Section 3.1(w).
“Effective Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Environmental Laws” shall have the meaning ascribed to such term in Section 3.1(m).
“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance” shall have the meaning ascribed to such term in the Certificate of Designations.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“Federal Reserve” shall have the meaning ascribed to such term in Section 3.1(pp).
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
“Hazardous Materials” shall have the meaning ascribed to such term in Section 3.1(m).
“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all U.S. and foreign patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, brand names, certification marks, trade dress, logos, trade names, domain names, assumed names and corporate names, together with all colorable imitations thereof, and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (c) all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all trade secrets under applicable state laws and the common law and know-how (including formulas, techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (e) all computer software (including source code, object code, diagrams, data and related documentation), and (f) all copies and tangible embodiments of the foregoing (in whatever form or medium).
“Issuer Covered Person” and “Issuer Covered Persons” shall have the meanings ascribed to such terms in Section 3.1(ll).
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“Laws” means any U.S. federal, state, local, foreign or other laws, rules, regulations, guidelines, orders, injunctions, building and other codes, ordinances, permits, licenses, authorizations, judgments, decrees of federal, state, local, foreign or other authorities, and all orders, writs, decrees and consents of any governmental or political subdivision or agency thereof, or any court or similar tribunal established by any such governmental or political subdivision or agency thereof.
“Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up Agreements” means the lock-up agreements, in the form attached hereto as Exhibit C, to be delivered pursuant to Section 2.3(a)(xii).
“Material Adverse Effect” shall have the meaning ascribed to such term in Section 3.1(b).
“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Money Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(qq).
“OFAC” shall have the meaning ascribed to such term in Section 3.1(nn).
“Participation Maximum” shall have the meaning ascribed to such term in Section 4.22(a).
“Per Share Purchase Price” shall have the meaning ascribed to such term in the recitals.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement Agency Agreement” means the placement agency agreement, dated as of the date hereof, by and between the Company and the Placement Agent.
“Placement Agent” means E.F. Hutton & Co.
“Pre-Notice” shall have the meaning ascribed to such term in Section 4.22(b).
“Preferred Stock” shall have the meaning ascribed to such term in the recitals.
“Principal Market” means the primary market on which the Common Stock is then listed or quoted for trading, including, without limitation, The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, OTC Pink, OTCQB or OTCQX and any successor markets thereto.
“Prior Placement” shall have the meaning ascribed to such term in the recitals.
“Prior Purchase Agreement” shall have the meaning ascribed to such term in the recitals.
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“Prior Transaction Documents” means the Prior Purchase Agreement and the “Transaction Documents” as defined therein.
“Prior Purchaser Consent” means the consents and waivers obtained from the applicable purchasers under the Prior Transaction Documents and the transaction documents for the registered offering that closed on August 7, 2026 in connection with the transactions contemplated hereby.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether pending or, to the Company’s knowledge, threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties before any court, arbitrator, governmental or administrative agency or regulatory authority.
“Public Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).
“Purchaser” and “Purchasers” shall have the meanings ascribed thereto in the preamble.
“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration Rights Agreement” means the registration rights agreement, dated as of the date hereof, by and among the Company and the Purchasers, in the form attached hereto as Exhibit B.
“Registration Statement” shall have the meaning ascribed to such term in Section 1 of the Registration Rights Agreement.
“Regulation FD” means Regulation FD promulgated by the SEC pursuant to the Exchange Act, as such Regulation may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Regulation.
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Reserved Amount” shall have the meaning ascribed to such term in Section 4.9.
“Rule 144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities” means the Preferred Stock, the Conversion Shares.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
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“Stated Value” shall have the meaning ascribed to such term in the recitals.
“Stockholder Approval” means the approval of the stockholders of the Company, if and to the extent the Company elects or is required to seek such approval, of the issuance of shares of Common Stock pursuant to the Transaction Documents in excess of the Exchange Cap for purposes of Nasdaq Listing Rule 5635(d).
“Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for the Preferred Stock purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.
“Subsequent Financing” shall have the meaning ascribed to such term in Section 4.13.
“Subsequent Financing Notice” shall have the meaning ascribed to such term in Section 4.22(b).
“Subsidiary” means, with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability company, trust, estate, association, joint venture or other business entity of which (a) more than fifty percent (50%) of (i) the outstanding capital stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly through one or more intermediaries, by such entity, or (b) is under the actual control of the Company.
“Trading Day” means a day on which the Principal Market is open for trading.
“Transaction Documents” means this Agreement, the Certificate of Designations, the Registration Rights Agreement, the Placement Agency Agreement, the Lock-Up Agreements, all schedules and exhibits thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent” means Broadridge Corporate Issuer Solutions, LLC, and any successor transfer agent of the Company.
“Variable Rate Transaction” shall have the meaning ascribed to such term in Section 4.14(b).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Principal Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Principal Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)) (or a similar organization or agency succeeding to its functions of reporting prices), (b) if no volume weighted average price of the Common Stock can be ascertained from the Principal Market, the average closing price of the Common Stock during the ten (10) Trading Days preceding such date, or (c) in all other cases, the fair market value of a share of Common Stock as determined by the Board of Directors.
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ARTICLE II
PURCHASE AND SALE
Section 2.1 Sale and Issuance of Securities.
(a) Subject to the terms and conditions of this Agreement, each Purchaser, severally and not jointly, agrees to purchase at the Closing, and the Company agrees to sell and issue to each Purchaser at the Closing, such number of shares of Preferred Stock as is set forth below such Purchaser’s name on the signature page hereto, at the Per Share Purchase Price.
(b) Each Purchaser acknowledges that the conversion of the Preferred Stock is subject to the Beneficial Ownership Limitation and the Exchange Cap, in each case as set forth in the Certificate of Designations and Section 4.19 of this Agreement.
Section 2.2 Closing. The purchase and sale of the Securities shall take place remotely via the exchange of documents and signatures at 10:00 a.m., Eastern time, on the Closing Date, or at such other time and place as the Company and the Purchasers mutually agree upon in writing (which time and place are designated as the “Closing”). Unless otherwise directed by the Placement Agent, settlement of the Securities shall occur via “Delivery Versus Payment” (“DVP”) through the paying agent designated pursuant to the Placement Agency Agreement, such that on the Closing Date each Purchaser shall deliver its Subscription Amount to the paying agent for disbursement in accordance with the flow of funds memorandum agreed among the Company, the Placement Agent and the paying agent.
Section 2.3 Deliveries.
(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this Agreement, duly executed by the Company;
(ii) evidence of the filing and acceptance of the Certificate of Designations by the Secretary of State of the State of Delaware, certified by the Secretary of State of the State of Delaware, together with a copy of the Certificate of Designations as so filed;
(iii) a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to record the issuance to each Purchaser, in book-entry form, of the number of shares of Preferred Stock set forth below such Purchaser’s name on the signature page hereto, registered in the name of such Purchaser;
(iv) the Registration Rights Agreement, duly executed by the Company;
(v) a legal opinion of counsel to the Company, dated as of the Closing Date, addressed to the Purchasers and the Placement Agent and in form and substance reasonably satisfactory to the Purchasers and the Placement Agent, covering such matters as are customary in transactions of this nature, including the due authorization, execution and delivery of the Transaction Documents, the effectiveness of the Certificate of Designations under the laws of the State of Delaware and the valid issuance of the Securities;
(vi) an officer’s certificate of an executive officer of the Company, dated as of the Closing Date, certifying that (A) the representations and warranties of the Company in the Transaction Documents are true and correct as of such date (or as of an earlier date if so specified), and (B) the Company has performed all obligations required to be performed as of the Closing Date;
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(vii) a certificate of the Secretary (or Assistant Secretary) of the Company, dated as of the Closing Date, certifying and attaching (A) a true, complete and correct copy of the Charter, including the Certificate of Designations, as amended and in effect on the Closing Date, (B) a true, complete and correct copy of the Company’s Bylaws, as amended and in effect on the Closing Date, (C) the resolutions of the Board of Directors authorizing the execution, delivery and performance of the Transaction Documents, the filing of the Certificate of Designations, the issuance of the Securities, the reservation of the Conversion Shares, and (D) the incumbency and signatures of the officers of the Company executing the Transaction Documents;
(viii) a certificate of the chief financial officer of the Company, dated as of the Closing Date, certifying, based on such officer’s knowledge after reasonable inquiry, as to the Company’s cash and cash equivalents, Indebtedness and any material off-balance sheet or undisclosed liabilities, in each case as of the Closing Date;
(ix) a certificate of good standing of the Company issued by the Secretary of State of the State of Delaware, dated as of a date within five (5) Business Days prior to the Closing Date;
(x) the Company’s wire transfer instructions, on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;
(xi) a reservation letter from the Company and the Transfer Agent, in the form attached hereto as Exhibit D, confirming that the Reserved Amount has been reserved for issuance upon conversion of the Preferred Stock;
(xii) Lock-Up Agreements, each with a duration of ninety (90) days following the Closing Date, duly executed by each of the Company’s (A) executive officers, including Shahin Behroyan, and (B) directors;
(xiii) a consent and waiver, duly executed by each purchaser under the Prior Purchase Agreement and in form and substance reasonably satisfactory to the Purchasers and the Placement Agent (the “Prior Purchaser Consent”), (A) waiving any rights of such purchaser under Sections 4.13 and 4.17 of the Prior Purchase Agreement and Section 6(b) of the registration rights agreement included in the Prior Transaction Documents with respect to the transactions contemplated by the Transaction Documents, (B) acknowledging the Exchange Cap set forth in Section 4.19, and (C) confirming the number of shares of Common Stock, if any, issued or issuable to such purchaser pursuant to the anti-dilution and top-up provisions of the Prior Transaction Documents as of the Closing Date; and
(xiv) such other customary documents relating to the transactions contemplated by this Agreement as the Purchasers or the Placement Agent may reasonably request, provided that such documents are reasonably necessary to consummate the transactions contemplated hereby and do not impose any material cost, liability or burden on the Company;
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered the following:
(i) to the Company, this Agreement, duly executed by such Purchaser;
(ii) to the Company, the Registration Rights Agreement, duly executed by such Purchaser;
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(iii) such Purchaser’s Subscription Amount, by wire transfer of immediately available funds in accordance with the wire instructions provided by the Placement Agent for the account of the paying agent designated pursuant to Section 2.2, to be held and disbursed at the Closing in accordance with Section 2.2;
(iv) to the Company, a completed and duly executed accredited investor questionnaire and, if applicable, a completed and duly executed Selling Stockholder Questionnaire (as defined in the Registration Rights Agreement); and
(v) to the Company and/or the Placement Agent, such other information, certificates or documents reasonably requested to consummate the transactions contemplated by this Agreement.
Section 2.4 Closing Conditions.
(a) The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of each Purchaser contained herein (unless as of a specific date therein, in which case they shall be accurate as of such date);
(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed in all material respects; and
(iii) the delivery by each Purchaser of the items set forth in Section 2.3(b) of this Agreement.
(b) The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein, in which case they shall be accurate as of such date);
(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed in all material respects;
(iii) the delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;
(iv) the Certificate of Designations shall have been filed with and accepted by the Secretary of State of the State of Delaware and shall be in full force and effect;
(v) there shall have been no Material Adverse Effect with respect to the Company since the date hereof; provided that the Nasdaq Listing Rule 5550(b) deficiency and the extension through November 25, 2026 described on Schedule 3.1(w) shall not, by themselves, constitute a Material Adverse Effect or a failure of this condition; and
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(vi) from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the SEC or the Principal Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Principal Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing, provided that the Nasdaq Listing Rule 5550(b) deficiency and the extension through November 25, 2026 described on Schedule 3.1(w) shall not, by themselves, constitute a Material Adverse Effect or a failure of this condition.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties of the Company.
The Company hereby represents and warrants to each Purchaser and the Placement Agent that, except as set forth in the Disclosure Schedules, which exceptions shall be deemed to be part of the representations and warranties made hereunder, the following representations are true and complete in all material respects as of the date hereof and as of the Closing Date, except as otherwise indicated. Any representation or warranty expressly qualified by materiality or Material Adverse Effect shall be true and correct in all respects, and any representation or warranty qualified by the knowledge of the Company is made only to the Company’s knowledge after reasonable inquiry. The Disclosure Schedules shall be arranged in sections corresponding to the numbered and lettered sections contained in this Section 3.1, and the disclosures in any section of the Disclosure Schedules shall qualify other sections in this Section 3.1 only to the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections. For purposes of this Agreement, “executive officers” includes, but is not limited to, Shahin Behroyan, serving as Chief Executive Officer through 1605811 BC Ltd., his personal corporation and independent contractor entity.
(a) Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth on Schedule 3.1(a). Except as set forth on Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any material Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities, in each case in all material respects. If the Company has no Subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”), and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
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(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby (including the filing of the Certificate of Designations and the issuance of the Securities) have been duly authorized by all necessary action on the part of the Company, and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No Conflicts. Except as set forth on Schedule 3.1(d), the execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, including, without limitation, the Prior Transaction Documents, except that any adjustment, most-favored-nation election, top-up share or other issuance required or permitted under the Prior Transaction Documents as a result of this offering shall not constitute a breach of this representation, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations and the rules and regulations of the Principal Market), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. Except as set forth on Schedule 3.1(d), the August 5, 2026 registered offering did not breach any restriction in the purchase agreement or placement agency agreement governing that offering.
(e) Filings, Consents and Approvals. Except as set forth on Schedule 3.1(e), the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing of the Certificate of Designations with the Secretary of State of the State of Delaware, (iii) the notification of the listing of the Conversion Shares to the Principal Market, (iv) the filing with the SEC of the Registration Statement pursuant to the Registration Rights Agreement and (v) the filing of a Form D with the SEC and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f) Issuance of the Securities. The Preferred Stock are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company, and will have the rights, preferences, privileges and restrictions set forth in the Certificate of Designations. The Conversion Shares, when issued upon conversion of the Preferred Stock in accordance with the terms of the Certificate of Designations, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock equal to the Reserved Amount. The Board of Directors has duly adopted the resolutions creating the Preferred Stock and authorizing the filing of the Certificate of Designations, and the Company has, or prior to the Closing will have, filed the Certificate of Designations with the Secretary of State of the State of Delaware in accordance with the Delaware General Corporation Law.
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(g) Capitalization. The capitalization of the Company as of the date hereof is set forth in all material respects on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof, the number of shares of Common Stock issued and outstanding immediately prior to the execution of the Prior Purchase Agreement, and the number of shares of Common Stock issued and issuable pursuant to the Prior Transaction Documents (including any shares issuable pursuant to the anti-dilution and top-up provisions thereof), the August 5, 2026 registered offering of approximately $5,000,000 consisting of 996,231 shares of Common Stock and pre-funded warrants to purchase 2,849,923 shares of Common Stock, which offering closed on August 7, 2026 with E.F. Hutton & Co. acting as placement agent, and the fact that only 1,830 shares of Common Stock remained available for future grants under the 2021 Stock Incentive Plan as of June 30, 2026. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than as set forth on Schedule 3.1(g) and other than pursuant to the exercise of employee stock awards under the Company’s equity incentive plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans, the issuance of shares of Common Stock or Common Stock Equivalents pursuant to agreements outstanding as of the date of the most recently filed periodic report under the Exchange Act and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. Except as set forth on Schedule 3.1(g), no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. Except as set forth on Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or between or among any of the Company’s stockholders.
(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two (2) years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal year-end audit adjustments. The SEC Reports disclose substantial doubt about the Company’s ability to continue as a going concern.
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(i) Material Changes; Undisclosed Events, Liabilities or Developments. Other than as set forth on Schedule 3.1(i), since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans. The Company does not have pending before the SEC any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made. Schedule 3.1(i) sets forth the pending Asset Purchase Agreement with Foldlab AI Ltd. involving a $4,500,000 purchase price, including $2,000,000 in cash, which was approved by the Company’s stockholders on October 9, 2026, and the $2,000,000 consulting fee payable to IR Agency LLC under the consulting agreement dated August 12, 2026.
(j) Litigation. Except as disclosed in the SEC Reports, there is no action, suit, notice of violation, proceeding or investigation, inquiry or other similar proceeding of any federal or state governmental authority pending or, to the Company’s knowledge, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the issuance of the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. The Company has no reason to believe that an Action will be filed against it in the future. Except as set forth in the SEC Reports, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the Company’s knowledge after reasonable inquiry, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act, and the Company has no reason to believe it will do so in the future. For clarity, the Actions disclosed in the SEC Reports and Schedule 3.1(j) include the Focus Technology Solutions matter, including the pre-judgment security order requiring security of up to $420,000, the Azenta matter involving a claim of $651,262, and the Krisbio matter involving a claim of $266,380.
(k) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no effort is underway to unionize or organize the employees of the Company or any Subsidiary. To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There is no workers’ compensation liability matter, employment-related charge, complaint, grievance, investigation, inquiry or obligation of any kind pending, or to the Company’s knowledge, threatened, relating to an alleged violation or breach by the Company or its Subsidiaries of any law, regulation or contract that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has no reason to believe that any individual may commence an Action or file a claim with any governmental authority against the Company alleging sexual harassment or any type of discrimination or violation of any Laws.
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(l) Compliance. Except as set forth on Schedule 3.1(l), neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including, without limitation, all foreign, federal, state and local laws and regulations relating to taxes, healthcare laws, anti-kickback laws, securities, environmental protection, occupational health and safety, product quality and safety, transportation, and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(m) Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits, licenses or other approvals required of 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 in each case of clauses (i), (ii) and (iii) where the failure to so comply could not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
(o) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance, except where the failure to so comply would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. Any Liens or security arrangements arising from the Focus Technology Solutions matter, including the pre-judgment security order described in Schedule 3.1(o), are disclosed on Schedule 3.1(o).
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(p) Intellectual Property.
(i) Except as set forth on Schedule 3.1(p), the Company owns or possesses or has the right to use pursuant to a valid and enforceable written license, sublicense, agreement or permission all Intellectual Property necessary for the operation of the business of the Company as presently conducted, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(ii) The Company has no knowledge that the Intellectual Property interferes with, infringes upon, misappropriates or otherwise comes into conflict with any Intellectual Property rights of third parties, and the Company has no knowledge that facts exist which indicate a likelihood of the foregoing. The Company has not received any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or conflict (including any claim that the Company must license or refrain from using any Intellectual Property rights of any third party). To the knowledge of the Company, all rights to its Intellectual Property are enforceable and no third party has interfered with, infringed upon, misappropriated or otherwise come into conflict with any Intellectual Property rights of the Company, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(iii) None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except where such expiration, termination or abandonment would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.
(q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any 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 without a significant increase in cost.
(r) Transactions With Affiliates and Employees. Except as set forth on Schedule 3.1(r), none of the officers, directors or Affiliates of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director, Affiliate or such employee or, to the knowledge of the Company, any entity in which any officer, director or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000, other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock award agreements under any equity incentive plan of the Company.
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(s) Sarbanes-Oxley; Internal Accounting Controls. Except as set forth on Schedule 3.1(s), the Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls as set forth in the SEC Reports. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries. The material weakness disclosed in the SEC Reports relates to controls for documenting customer tax-exempt status, calculating and collecting sales tax at the point of sale, and reporting and remitting sales tax obligations.
(t) Certain Fees. Other than the fees and expenses payable to the Placement Agent pursuant to the Placement Agency Agreement and as set forth on Schedule 3.1(t), no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(t) that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.
(v) Registration Rights. Other than as required pursuant to the Registration Rights Agreement and as set forth on Schedule 3.1(v) (which shall include the registration rights granted pursuant to the Prior Transaction Documents), no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.
(w) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, nor has the Company received any notification that the SEC is contemplating terminating such registration. Except as set forth on Schedule 3.1(w), the Company has not, in the twelve (12) months preceding the date hereof, received notice from any Principal Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Principal Market. The Company received notice from Nasdaq on May 29, 2026 that it was deficient under Nasdaq Listing Rule 5550(b), and Nasdaq subsequently granted the Company an extension until November 25, 2026 to evidence compliance with that rule. Except as set forth on Schedule 3.1(w) (including the Nasdaq Listing Rule 5550(b) deficiency described above), the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company (“DTC”) or another established clearing corporation and the Company is current in payment of the fees to DTC (or such other established clearing corporation) in connection with such electronic transfer. The Company is not subject to any “chill” issued by DTC.
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(x) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Charter (or similar charter documents) or the Laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation, as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
(y) Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that, to the Company’s knowledge after reasonable inquiry, constitutes or might constitute material, non-public information which is not otherwise disclosed in the SEC Reports. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules, is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve (12) months preceding the date of this Agreement, to the Company’s knowledge after reasonable inquiry, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(z) No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the offering of the Securities to be integrated with prior offerings by the Company (i) for purposes of the Securities Act, including Rule 152 promulgated thereunder, such that the offering of the Securities would require registration under the Securities Act, or (ii) except as set forth on Schedule 3.1(z) with respect to the Prior Placement and the August 5, 2026 registered offering, for purposes of any applicable stockholder approval provisions of any Principal Market on which any of the securities of the Company are listed or designated. The Company has structured the Securities, including the Exchange Cap, so that the issuance of the Securities and the Conversion Shares complies with the rules and regulations of the Principal Market without the approval of the Company’s stockholders.
(aa) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one (1) year from the Closing Date. The SEC Reports set forth in all material respects, as of the date hereof, all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (z) the present value of any lease payments in excess of $200,000 due under leases required to be capitalized in accordance with GAAP. Except as set forth in the SEC Reports, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
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(bb) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.
(cc) Foreign Corrupt Practices. To the Company’s knowledge after reasonable inquiry, neither the Company nor any Subsidiary, nor any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of Law, or (iv) violated any provision of the FCPA.
(dd) Accountants. The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act and the rules of the Public Company Accounting Oversight Board (“PCAOB”), and is in good standing with the PCAOB. Such firm has expressed its opinion with respect to the financial statements included in the Company’s most recently filed Annual Report on Form 10-K and, to the knowledge of the Company, is expected to express its opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2026. The Company has not had any disagreements (as that term is defined in Item 304 of Regulation S-K) with its independent registered public accounting firm during the periods covered by the financial statements included in the SEC Reports or any subsequent interim period. To the Company’s knowledge, such firm has not resigned or been dismissed as the Company’s independent auditors as a result of or in connection with any disagreement relating to accounting principles, financial statement disclosures, or auditing scope or procedures.
(ee) Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby, and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
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(ff) Acknowledgment Regarding Purchasers’ Trading Activity. Notwithstanding anything in this Agreement or elsewhere to the contrary (except for Sections 3.2(f) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) no Purchaser has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock; and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(gg) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of the Common Stock to facilitate the sale of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities.
(hh) Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(ii) Cybersecurity. Except as would not reasonably be expected to result in a Material Adverse Effect, (i) there has been no material security breach of or relating to any of the Company’s or its Subsidiaries’ information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”), (ii) the Company and the Subsidiaries have not been notified of, and have no knowledge of any event or condition that would reasonably be expected to result in, any material security breach to its IT Systems and Data, (iii) the Company and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, (iv) the Company and its Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data, and (v) the Company and its Subsidiaries have implemented commercially reasonable backup and disaster recovery technology.
(jj) Private Placement. Assuming the accuracy of each Purchaser’s representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.
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(kk) No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(ll) No Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506(b) under the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of twenty percent (20%) or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale, nor any Person, including the Placement Agent, who will receive a commission or fees for soliciting purchasers (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.
(mm) Notice of Disqualification Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date, of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.
(nn) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).
(oo) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon any Purchaser’s request.
(pp) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”), and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(qq) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
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(rr) Shell Company Status. The Company is not, and has not been for a period of at least one (1) year from the date hereof, an issuer identified in Rule 144(i)(1) under the Securities Act.
(ss) Prior Placement. Except as set forth on Schedule 3.1(ss), (i) the Company has performed all obligations required to be performed by it under the Prior Transaction Documents, (ii) no “Dilutive Issuance” (as defined in the Prior Purchase Agreement) has occurred or will occur as a result of the transactions contemplated by the Transaction Documents that has not been disclosed on Schedule 3.1(g), provided that any adjustment, most-favored-nation election, top-up share or other issuance required or permitted under the Prior Transaction Documents as a result of this offering shall not constitute a breach of any representation, warranty or covenant of the Company hereunder, (iii) the Company has delivered any notice required under Section 4.13 of the Prior Purchase Agreement with respect to the transactions contemplated hereby, and (iv) the Prior Purchaser Consent, when delivered, will constitute all consents and waivers under the Prior Transaction Documents necessary for the execution, delivery and performance of the Transaction Documents, including the filing of the Registration Statement pursuant to the Registration Rights Agreement.
Section 3.2 Representations and Warranties of the Purchasers.
Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants to the Company and the Placement Agent as follows, which representations and warranties shall be true and correct as of the date hereof and as of the Closing Date:
(a) Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(b) Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other Persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring such Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other Persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell such Securities in compliance with applicable federal and state securities laws).
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(c) Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, an “accredited investor” within the meaning of Rule 501(a) under Regulation D promulgated under the Securities Act, and such Purchaser has accurately identified in the accredited investor questionnaire delivered pursuant to Section 2.3(b)(iv) each paragraph of Rule 501(a) under which it qualifies. No Purchaser is subject to any Disqualification Event, except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
(d) Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Reports and has been afforded, subject to Regulation FD, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Company, the Placement Agent, nor their Affiliates or anyone else has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Such Purchaser acknowledges that the Placement Agent and its Affiliates have not acted as a financial advisor or fiduciary to such Purchaser in connection with the issuance of the Securities.
(f) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.
(g) Exchange Cap. Such Purchaser acknowledges that the Preferred Stock is convertible only within the Exchange Cap, as set forth in Section 4.19 and the Certificate of Designations, unless and until Stockholder Approval is obtained, and that the Company is under no obligation to seek Stockholder Approval except as provided in Section 8(c) of the Certificate of Designations.
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The Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions contemplated hereby.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
Section 4.1 Transfer Restrictions; Removal of Legends.
(a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of the Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, at the cost of the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.
(b) Each Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in substantially the following form:
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE OR EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
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The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of the Securities may reasonably request in connection with a pledge or transfer of the Securities.
(c) Certificates evidencing the Conversion Shares (or the Transfer Agent’s records if held in book-entry form) shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such securities is effective under the Securities Act (the “Effective Date”), (ii) following any sale of such Conversion Shares pursuant to Rule 144, (iii) if such Conversion Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information requirement under Rule 144 as to such securities and without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities Act (including Sections 4(a)(1) and 4(a)(7), judicial interpretations and pronouncements issued by the staff of the SEC). The Company shall, at its expense, cause its counsel to issue a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder. If any shares of Preferred Stock are converted at a time when there is an effective registration statement to cover the resale of the Conversion Shares, or if such securities may be sold under Rule 144 and the Company is then in compliance with the current public information requirement under Rule 144, or if such securities may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information requirement under Rule 144 and without volume or manner-of-sale restrictions, or if such legend is not otherwise required under applicable requirements of the Securities Act (including Sections 4(a)(1) and 4(a)(7), judicial interpretations and pronouncements issued by the staff of the SEC), then such Conversion Shares shall be issued free of all legends. The Company agrees that, following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than two (2) Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Conversion Shares issued with a restrictive legend (or a request for legend removal for securities held in book-entry form) (such second (2nd) Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser such securities free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1. Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with DTC through its Deposit/Withdrawal at Custodian system as directed by such Purchaser. The Company shall be responsible for any delays caused by the Transfer Agent.
(d) In addition to such Purchaser’s other available remedies, subject to Section 5.18, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Conversion Shares (based on the VWAP of the Common Stock on the date such securities are submitted to the Transfer Agent) subject to such request, $10 per Trading Day for each Trading Day after the Legend Removal Date (increasing to $20 per Trading Day after the fifth (5th) Trading Day) until such securities are delivered without a legend; provided that the aggregate liquidated damages payable under this Section 4.1(d) with respect to any securities shall not exceed five percent (5%) of the aggregate purchase price paid for such securities. Nothing herein shall limit such Purchaser’s right to pursue actual damages (not duplicative of such liquidated damages) or a decree of specific performance and/or injunctive relief for the Company’s failure to deliver securities as required by the Transaction Documents. In addition, if after the Legend Removal Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of Conversion Shares that such Purchaser anticipated receiving from the Company without any restrictive legend, then the Company shall pay to such Purchaser, in cash, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased over the product of (A) such number of Conversion Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the highest closing sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable securities and ending on the date of such delivery and payment under this Section 4.1(d), provided that no amounts shall be payable under this sentence to the extent duplicative of the liquidated damages described above.(e) In the event a Purchaser shall request delivery of unlegended shares as described in this Section 4.1 and the Company is required to deliver such unlegended shares, (i) the Company shall pay all fees and expenses associated with or required by the legend removal and/or transfer including, but not limited to, legal fees, Transfer Agent fees and overnight delivery charges and taxes, if any, imposed by any applicable government upon the issuance of Common Stock; and (ii) the Company may not refuse to deliver unlegended shares based on any claim that such Purchaser or anyone associated or affiliated with such Purchaser has not complied with such Purchaser’s obligations under the Transaction Documents, or for any other reason, unless an injunction or temporary restraining order from a court, on notice, restraining and/or enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company has posted a surety bond for the benefit of such Purchaser in the amount of the greater of (A) 150% of the aggregate Stated Value of the Preferred Stock converted into the applicable Conversion Shares, or (B) the highest VWAP during the five (5) Trading Days before the issue date of the injunction multiplied by the number of unlegended shares to be subject to the injunction, which bond shall remain in effect until the completion of the litigation of the dispute and the proceeds of which shall be payable to such Purchaser to the extent such Purchaser obtains judgment in such Purchaser’s favor.
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(f) The Company shall (A) pay the reasonable legal fees of counsel of the Purchaser’s choice (provided such counsel is reasonably acceptable to the Company) (in an amount not to exceed $500 per legal opinion, and not more often than once per week per Purchaser) in connection with the issuance of Conversion Shares, and (B) cause its attorneys to promptly provide any opinion or reliance opinion to the Transfer Agent.
Section 4.2 Furnishing of Information; Public Information.
(a) Until the time that no Purchaser owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
(b) At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at such time that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”), then, in addition to such Purchaser’s other available remedies, the Company shall pay to such Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the applicable Securities, an amount in cash equal to one-half of one percent (0.5%) of the Applicable Amount on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty (30) days) thereafter until the earlier of (A) the date such Public Information Failure is cured and (B) such time that such public information is no longer required for the Purchaser to transfer the Securities pursuant to Rule 144; provided that the aggregate Public Information Failure payments payable to any Purchaser shall not exceed five percent (5%) of such Purchaser’s Applicable Amount. For purposes of this Section 4.2(b), the term “Applicable Amount” means the aggregate Subscription Amount paid by such Purchaser for Securities then held by such Purchaser. Public Information Failure payments shall be paid on the earlier of (x) the last day of the calendar month during which such payments are incurred and (y) the third (3rd) Business Day after the event or failure giving rise to such payments is cured. In the event the Company fails to make Public Information Failure payments in a timely manner, such payments shall bear interest at the rate of 1.0% per month (pro rated for partial months) until paid in full; provided that no interest shall accrue after the applicable cap above is reached. Such payments shall be the sole and exclusive monetary remedy for a Public Information Failure, except for actual, direct and reasonable out-of-pocket losses that are not duplicative of such payments or a decree of specific performance and/or injunctive relief for the Public Information Failure.
Section 4.3 Integration; Aggregation with Prior Placement.
(a) The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2(a)(1) of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers, or that would be integrated or aggregated with the offer or sale of the Securities for purposes of the rules and regulations of any Principal Market such that it would require stockholder approval prior to the closing of such other transaction, unless such stockholder approval is obtained before the closing of such subsequent transaction.
(b) The Company and each Purchaser acknowledge that the Securities have been structured so that the aggregate number of shares of Common Stock issuable pursuant to the Transaction Documents does not exceed the Exchange Cap, and the Company shall not issue any shares of Common Stock pursuant to the Transaction Documents in excess of the Exchange Cap unless and until Stockholder Approval has been obtained.
(c) The Company represents that the offering of the Securities is not, and shall not be, integrated with the Prior Placement or any other offering of securities by the Company for purposes of the Securities Act, and the Company shall not take any action that would cause the offering of the Securities to lose the benefit of the safe harbor set forth in Rule 152(b) under the Securities Act or otherwise fail to qualify for the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated thereunder.
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Section 4.4 Securities Laws Disclosure; Publicity. The Company shall (a) issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the SEC, in each case prior to 9:00 a.m., New York City time, on the first (1st) Trading Day following the date hereof (or, if this Agreement is executed after 9:00 a.m. but prior to midnight, New York City time, on a Trading Day, then prior to 9:00 a.m., New York City time, on the second (2nd) Trading Day following the date hereof). From and after the issuance of such press release, the Company represents to each Purchaser that it shall have publicly disclosed all material, non-public information delivered to each Purchaser by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates, on the one hand, and any of the Purchasers or any of their Affiliates, on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement (other than the press release and Form 8-K described in this Section 4.4 and the Registration Statement) without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the SEC or any regulatory agency or Principal Market, without the prior written consent of such Purchaser, except (a) as required by the staff of the SEC in connection with the filing of final Transaction Documents with the SEC or the Registration Statement and (b) to the extent such disclosure is required by law or Principal Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
Section 4.5 Stockholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and any Purchaser.
Section 4.6 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented in writing to the receipt of such information and agreed with the Company to keep such information confidential. To the extent that any notice provided pursuant to any Transaction Document or any other communications made by the Company, or information provided, to any Purchaser constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, and such information was provided without such Purchaser’s prior written consent, the Company shall simultaneously file such material, non-public information with the SEC pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. 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 such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. In addition to any other remedies provided by this Agreement or the other Transaction Documents, if the Company provides any material, non-public information to the Purchasers without their prior written consent, and it fails to immediately (no later than the next Trading Day) file a Form 8-K disclosing this material, non-public information, it shall, subject to Section 5.18, pay each Purchaser as partial liquidated damages and not as a penalty a sum equal to $500 per day for each $100,000 of each Purchaser’s Subscription Amount, beginning with the day the information is disclosed to the Purchaser and ending on and including the day the Form 8-K disclosing this information is filed; provided that no such liquidated damages shall be owed to any Purchaser not then holding Securities.
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Section 4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital and general corporate purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation, (d) in violation of the FCPA or OFAC regulations, (e) to lend money, give credit or make advances to any officers, directors, employees or Affiliates of the Company, or (f) for the purchase of real estate.
Section 4.8 Indemnification of the Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors, officers, stockholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all direct losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (including local counsel, if retained) that any such Purchaser Party may suffer or incur as a result of or relating to (a) any material breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any conduct by such Purchaser Party which constitutes willful misconduct or gross negligence). For purposes of this Section 4.8, (i) no indemnity shall be payable to the extent a loss is attributable to the breach by a Purchaser Party of its representations, warranties, covenants or agreements under the Transaction Documents, the gross negligence or willful misconduct of a Purchaser Party, or any trading, hedging, short sale or other market activity by a Purchaser Party, including any loss arising from a decline in or volatility of the market price of the Common Stock, and (ii) consequential, special, punitive, exemplary and incidental damages, lost profits, diminution in value and trading losses shall be excluded, except to the extent actually paid or awarded to a third party. The Company shall not be liable for indemnifiable losses until the aggregate amount of such losses exceeds one percent (1%) of the aggregate Subscription Amounts, and then only for losses in excess of such threshold, and the Company’s aggregate liability for indemnifiable losses shall not exceed ten percent (10%) of the aggregate Subscription Amounts; provided that the foregoing threshold and cap shall not apply to losses resulting from the Company’s fraud or willful misconduct. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel to the Purchaser Party, a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel for such Purchaser (in addition to local counsel, if retained). The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed, or (z) to the extent, but only to the extent, that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The Purchaser Parties shall have the right to settle any action against any of them by the payment of money, provided that they cannot agree to any equitable relief and the Company, its officers, directors and Affiliates receive unconditional releases in customary form. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
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Section 4.9 Reservation of Common Stock. As of the date hereof, the Company has reserved, and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a number of shares of Common Stock equal to the lesser of (x) one hundred twenty-five percent (125%) of the maximum aggregate number of shares of Common Stock issuable upon conversion of all of the Preferred Stock (without regard to the Beneficial Ownership Limitation or the Exchange Cap, and assuming conversion at the Floor Price (as defined in the Certificate of Designations)) and (y) the Exchange Cap (the “Reserved Amount”), for the purpose of enabling the Company to issue the Conversion Shares pursuant to the Certificate of Designations; provided that, from and after the date on which Stockholder Approval, if any, is obtained, the Reserved Amount shall be the number of shares of Common Stock determined under clause (x). The Company shall execute, and shall cause the Transfer Agent to execute and deliver, a reservation letter in the form attached hereto as Exhibit D, and shall take all necessary action to ensure the Reserved Amount is maintained at all times until the Preferred Stock has been converted in full. If at any time the number of shares of Common Stock authorized and reserved for issuance is insufficient to satisfy the Reserved Amount, the Company shall promptly take all corporate action reasonably necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company’s obligations under this Section 4.9, and using its commercially reasonable efforts to obtain stockholder approval of an increase in such authorized number of shares.
Section 4.10 Listing of Common Stock. The Company hereby agrees to use its best efforts to maintain the listing or quotation of the Common Stock on the Principal Market on which it is currently listed, and concurrently with the Closing, the Company shall submit a listing of additional shares notification to such Principal Market for the listing of the Conversion Shares and shall take all steps necessary to cause such shares to be approved for listing on the Principal Market as promptly as possible thereafter. The Company will take all action necessary to continue the listing and trading of its Common Stock on a Principal Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through DTC or another established clearing corporation, including, without limitation, by timely payment of fees to DTC or such other established clearing corporation in connection with such electronic transfer. If the Common Stock ceases to be listed on the Principal Market on which it is then listed, the Company shall use its best efforts to cause the Common Stock to be listed or quoted on another Principal Market as promptly as practicable
Section 4.11 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.
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Section 4.12 Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
Section 4.13 Most Favored Nation. From the date hereof until the date that is twelve (12) months following the Closing Date (the “MFN Period”), upon any issuance by the Company or any Subsidiary of Common Stock or Common Stock Equivalents for cash consideration, indebtedness or a combination thereof (a “Subsequent Financing”), each Purchaser shall have the right to receive the benefit of any economic term of such Subsequent Financing that is materially more favorable to the investors in such Subsequent Financing than the corresponding economic terms granted to the Purchasers under the Transaction Documents, but only to the extent such term applies to securities of the same class or series as the Securities. The rights in this Section 4.13 shall not apply to any Exempt Issuance or to any issuance or transaction involving (i) a registered public offering, underwritten offering or at-the-market offering, (ii) equity compensation or securities issued to employees, officers, directors, consultants, vendors, customers or other commercial counterparties, (iii) an acquisition, merger, strategic partnership or other bona fide commercial transaction, or (iv) debt, equipment or other non-equity financing. The Company shall provide each Purchaser with written notice of any Subsequent Financing subject to this Section 4.13 (the “MFN Notice”) not later than three (3) Business Days prior to the consummation thereof, which MFN Notice shall include copies of the definitive transaction documents in respect thereof. Each Purchaser shall have the right, exercisable by written notice to the Company at any time within five (5) Business Days following receipt of such MFN Notice, to elect to receive the benefit of any qualifying MFN Term, subject to the same conditions applicable to the investors in the applicable Subsequent Financing, and the Company shall take such actions as are reasonably necessary to document such election. A Purchaser may elect to receive the benefit of an MFN Term without being required to accept any other term of the applicable Subsequent Financing, but may not elect terms relating solely to governance, information, registration, closing conditions or other non-economic rights, and may not elect a term on a stand-alone basis if doing so would result in a more favorable overall economic package than that provided to the investors in the applicable Subsequent Financing. Notwithstanding the foregoing, to the extent any MFN Term would require the Company to issue shares of Common Stock in excess of the Exchange Cap or would otherwise require stockholder approval under the rules of the Principal Market, such MFN Term shall not become effective until the Stockholder Approval (or such other stockholder approval as may be required) has been obtained, provided that the most-favored nation right shall not apply to any Exempt Issuance.
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Section 4.14 Subsequent Equity Sales.
(a) From the date hereof until ninety (90) days after the Effective Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents, other than Exempt Issuances.
(b) From the date hereof until the twelve (12) month anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction; provided, however, that beginning ninety (90) days after the Closing Date, the Company may establish and conduct a bona fide “at-the-market” offering or other continuous offering of Common Stock at prevailing market prices, so long as such offering does not include a fixed discount, reset, floor or other variable pricing feature. “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 Common Stock either (A) at a conversion price, exercise price, exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of 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 Common Stock, or (ii) enters into, or effects a transaction under, any agreement, other than a bona fide “at-the-market” offering permitted above, whereby the Company may sell Common Stock or Common Stock Equivalents at a future-determined price.
(c) Notwithstanding the foregoing, this Section 4.14 shall not apply in respect of an Exempt Issuance, and nothing in this Section 4.14 shall restrict the Company from performing its obligations under the Prior Transaction Documents as in effect on the date hereof or from issuing shares or Common Stock Equivalents as stock consideration or otherwise in connection with the acquisition of assets, businesses, products or technologies, including the stock consideration payable to Foldlab AI Ltd. under the Asset Purchase Agreement dated September 4, 2026, in each case to the extent permitted by the applicable transaction documents and the rules of the Principal Market; each such issuance shall be treated as an Exempt Issuance for purposes of this Agreement and the Certificate of Designations to the extent so permitted. The parties acknowledge that any adjustment, most-favored-nation election, top-up shares or other issuance triggered under the Prior Transaction Documents by this offering shall not constitute a breach of this Agreement.
Section 4.15 Conversion Price. The Conversion Price of the Preferred Stock shall be determined, and the Floor Price (as defined in the Certificate of Designations) shall be subject to adjustment, as set forth in the Certificate of Designations. The parties acknowledge and agree that no determination of the Conversion Price shall result in the issuance of Conversion Shares in excess of the Exchange Cap unless and until Stockholder Approval has been obtained.
Section 4.16 Preservation of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises in the jurisdiction of its incorporation, and qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified might reasonably be expected to have a Material Adverse Effect.
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Section 4.17 No Other Registration Statements. Except as disclosed on Schedule 4.17 (which shall include the registration statement required to be filed pursuant to the Prior Transaction Documents), while any Securities are outstanding, the Company will not file any registration statement to register sales of Common Stock, including shares underlying any derivative securities (other than a registration statement on Form S-8 or Form S-4), unless a registration statement is then in effect for the resale by the Purchasers of all of the Conversion Shares.
Section 4.18 Form D; Blue Sky Filings. The Company shall take such actions as it reasonably determines are necessary to qualify the Securities for sale to the Purchasers, or to secure an exemption from such qualification, under applicable state securities or “Blue Sky” laws of the jurisdictions in which offers and sales of the Securities are made, and shall furnish evidence of such actions promptly upon request of any Purchaser. The Company shall file a Form D with the SEC with respect to the Securities as required under Regulation D promulgated under the Securities Act within fifteen (15) days after the Closing Date and shall provide a copy of such filing to the Purchasers and the Placement Agent upon request.
Section 4.19 Exchange Cap.
(a) Notwithstanding anything herein or in any other Transaction Document to the contrary, unless and until Stockholder Approval has been obtained, the Company shall not issue, and no Purchaser shall be entitled to receive, any shares of Common Stock pursuant to the Transaction Documents (including upon conversion of the Preferred Stock, in payment of dividends thereon and as a result of any adjustment to the Conversion Price) to the extent that, after giving effect to such issuance, the aggregate number of shares of Common Stock so issued would exceed 1,157,223 shares of Common Stock, which number represents 19.99% of the 5,789,013 shares of Common Stock issued and outstanding immediately prior to the execution of this Agreement, subject to adjustment for any reverse or forward stock split, stock dividend, stock combination or other similar transaction occurring after the date hereof (the “Exchange Cap”). The Exchange Cap shall be allocated among the Purchasers pro rata based on their respective Subscription Amounts, and any shares of Common Stock not issuable by reason of the Exchange Cap shall remain issuable if and when Stockholder Approval is obtained. Nothing in this Agreement obligates the Company to seek Stockholder Approval, except as provided in Section 8(c) of the Certificate of Designations.
Section 4.20 Certificate of Designations. Prior to the Closing, the Company shall file the Certificate of Designations with the Secretary of State of the State of Delaware and shall deliver to the Purchasers and the Placement Agent evidence of such filing and acceptance. The Company shall not amend, alter or repeal the Certificate of Designations, or take any action that would adversely affect the rights, preferences or privileges of the Preferred Stock, except in accordance with the terms of the Certificate of Designations.
Section 4.21 Non-Circumvention. The Company hereby covenants and agrees that it will not knowingly take any voluntary action primarily intended to avoid or circumvent the observance or performance of the material terms of this Agreement or the other Transaction Documents, and will in good faith perform its obligations under this Agreement and the other Transaction Documents. Nothing in this Section 4.21 shall require the Company or the Board of Directors to take any action inconsistent with applicable law, the rules of the Principal Market, its fiduciary duties or the independent business judgment of the Board of Directors. Without limiting the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion of the Preferred Stock above the Conversion Price then in effect and (b) shall use commercially reasonable efforts to take such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Conversion Shares upon the conversion of the Preferred Stock.
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Section 4.22 Participation in Future Financings.
(a) From the date hereof until the date that is twelve (12) months following the Closing Date, upon any Subsequent Financing, each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to twenty-five percent (25%) of the Subsequent Financing (the “Participation Maximum”), allocated among the Purchasers pro rata based on their respective Subscription Amounts, on the same terms, conditions and price provided for in the Subsequent Financing; provided that this Section 4.22 shall not apply to an Exempt Issuance or to any issuance or transaction involving (i) a registered public offering, underwritten offering or an at-the-market offering, (ii) equity compensation or securities issued to employees, officers, directors, consultants, vendors, customers or other commercial counterparties, (iii) an acquisition, merger, strategic partnership or other bona fide commercial transaction, or (iv) debt, equipment or other non-equity financing.
(b) At least five (5) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of its intention to effect a Subsequent Financing (a “Pre-Notice”), which Pre-Notice shall ask such Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.
(c) Any Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice that such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no such notice from a Purchaser as of such fifth (5th) Trading Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate.
(d) If, by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice. If, by such time, the Purchasers have elected to participate in an aggregate amount in excess of the Participation Maximum, the Participation Maximum shall be allocated among the participating Purchasers pro rata based on their respective Subscription Amounts.
(e) The Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation set forth above in this Section 4.22, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial Subsequent Financing Notice. The Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of such Purchaser.
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(f) Notwithstanding anything to the contrary in this Section 4.22 and unless otherwise agreed to by such Purchaser, the Company shall either confirm in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Notwithstanding the foregoing, this Section 4.22 shall not apply in respect of an Exempt Issuance, and to the extent any Purchaser’s participation in a Subsequent Financing would require stockholder approval under the rules of the Principal Market, such participation shall be subject to receipt of such approval.
ARTICLE V
MISCELLANEOUS
Section 5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
Section 5.2 Reserved.
Section 5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules; provided, however, that nothing in this Agreement shall be deemed to amend, modify or supersede the Prior Transaction Documents, which shall remain in full force and effect in accordance with their terms.
Section 5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto, with a copy (which shall not constitute notice) to the Placement Agent and its counsel at the addresses set forth in the Placement Agency Agreement.
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Section 5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers which purchased at least 50.1% in interest of the Preferred Stock based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought; provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
Section 5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
Section 5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the Purchasers.
Section 5.8 No Third-Party Beneficiaries. The Placement Agent shall be a third-party beneficiary of the representations and warranties of the Company in this Agreement and shall be entitled to rely upon and enforce the same. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
Section 5.9 Governing Law; Exclusive Jurisdiction; Attorneys’ Fees. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof; provided that the Certificate of Designations and matters relating to the internal affairs of the Company shall be governed by the laws of the State of Delaware. Each party agrees that all Actions concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Document (whether brought against a party hereto or its respective Affiliates, directors, officers, stockholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in New York County, New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action, any claim that it is not personally subject to the jurisdiction of any such court, that such Action is improper or is an inconvenient venue for such Action. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company elsewhere in this Agreement, the prevailing party in such Action shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action.
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Section 5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
Section 5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file or by electronic signature complying with the U.S. federal ESIGN Act of 2000, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
Section 5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
Section 5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.
Section 5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction without requiring the posting of any bond. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
Section 5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.
Section 5.16 Payment Set Aside. To the extent the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
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Section 5.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, 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 by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
Section 5.18 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.
Section 5.19 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
Section 5.20 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
Section 5.21 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER TRIAL BY JURY.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
iSPECIMEN INC. |
Address for Notice: | ||
| By: | iSpecimen Inc. | ||
| Name: | Shahin Behroyan | 8 Cabot Road, Suite 1800 | |
| Title: | Chief Executive Officer | Woburn, MA 01801 | |
Attention: Shahin Behroyan, Chief Executive Officer Email: sbehroyan@ispecimen.com
With a copy to (which shall not constitute notice):
Sichenzia Ross Ference Carmel LLP | |||
[Signature Page to Securities Purchase Agreement]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser: ______________________________________________________________________________
Signature of Authorized Signatory of Purchaser: _______________________________________________________
Name of Authorized Signatory: ____________________________________________________________________
Title of Authorized Signatory: _____________________________________________________________________
Email Address of Authorized Signatory: _____________________________________________________________
Address for Notice to Purchaser: ___________________________________________________________________
______________________________________________________________________________________________
Address for Delivery of Securities to Purchaser (if not same as address for notice): ___________________________
_____________________________________________________________________________________________
Subscription Amount: $__________________________________________________________________________
Shares of Preferred Stock: (Subscription Amount ÷ $800)
_____________________________________________________________________________________________
EIN / Tax Identification Number: __________________________________________________________________
[Signature Page to Securities Purchase Agreement]
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EXHIBITS AND SCHEDULES
| Exhibit A | Form of Certificate of Designations | |
| Exhibit B | Form of Registration Rights Agreement | |
| Exhibit C | Form of Lock-Up Agreement | |
| Exhibit D | Form of Transfer Agent Reservation Letter | |
| Schedule 3.1(a) | Subsidiaries | |
| Schedule 3.1(d) | No Conflicts; August 5, 2026 registered offering compliance | |
| Schedule 3.1(e) | Filings, Consents and Approvals | |
| Schedule 3.1(g) | Capitalization (including Prior Placement and August 5, 2026 registered offering share counts, 2021 Plan share reserve and Exchange Cap calculation) | |
| Schedule 3.1(h) | SEC Reports; Financial Statements (including going concern disclosure) | |
| Schedule 3.1(i) | Material Changes; Undisclosed Events, Liabilities or Developments (including Foldlab AI and IR Agency matters) | |
| Schedule 3.1(j) | Litigation (including Focus Technology Solutions, Azenta and Krisbio matters) | |
| Schedule 3.1(l) | Compliance | |
| Schedule 3.1(o) | Title to Assets; Litigation-related Liens and Security Arrangements | |
| Schedule 3.1(p) | Intellectual Property | |
| Schedule 3.1(r) | Transactions with Affiliates | |
| Schedule 3.1(s) | Sarbanes-Oxley; Internal Controls | |
| Schedule 3.1(t) | Certain Fees (including IR Agency consulting fee) | |
| Schedule 3.1(v) | Registration Rights | |
| Schedule 3.1(w) | Listing Notices (including Nasdaq Rule 5550(b) deficiency and extension) | |
| Schedule 3.1(z) | Integration; Prior Placement; August 5, 2026 registered offering | |
| Schedule 3.1(ss) | Prior Placement Consents and Waivers; August 5, 2026 registered offering compliance | |
| Schedule 4.17 | Permitted Registration Statements |
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EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATIONS
[See attached]
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EXHIBIT B
FORM OF REGISTRATION RIGHTS AGREEMENT
[See attached]
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EXHIBIT C
FORM OF LOCK-UP AGREEMENT
[See attached]
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EXHIBIT D
FORM OF TRANSFER AGENT RESERVATION LETTER
[See attached]
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Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is dated as of November 6, 2026, by and among iSpecimen Inc., a Delaware corporation (the “Company”), and each purchaser appearing on the signature pages to the Purchase Agreement (as defined below) (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).
WHEREAS, the Company and the Purchasers are parties to that certain Securities Purchase Agreement, dated as of the date of this Agreement (the “Purchase Agreement”), pursuant to which the Purchasers are purchasing shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock”); and
WHEREAS, in connection with the consummation of the transactions contemplated by the Purchase Agreement, and pursuant to the terms of the Purchase Agreement, the parties desire to enter into this Agreement in order to grant certain registration rights to the Purchasers as set forth below.
NOW, THEREFORE, in consideration of the foregoing and the mutual and dependent covenants hereinafter set forth, the parties agree as follows:
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Advice” shall have the meaning set forth in Section 6(d).
“CDI 612.09” means Question 612.09 of the Commission’s Compliance and Disclosure Interpretations of the Securities Act Rules.
“Closing” means the closing of the purchase and sale of the Preferred Stock pursuant to the Purchase Agreement.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the Company’s common stock, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.
“Conversion Shares” means the shares of Common Stock issuable upon conversion of the Preferred Stock and in payment of dividends thereon, in each case in accordance with the Certificate of Designations.
“Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the seventy-fifth (75th) calendar day following the Closing (or, in the event of a “full review” by the Commission, the one hundred twentieth (120th) calendar day following the Closing) and, with respect to any additional Registration Statements which may be required pursuant to this Agreement, the seventy-fifth (75th) calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a “full review” by the Commission, the one hundred twentieth (120th) calendar day following the date such additional Registration Statement is required to be filed hereunder); provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth (5th) Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above; provided, further, that if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.
“Effectiveness Period” shall have the meaning set forth in Section 2(a).
“Event” shall have the meaning set forth in Section 2(b).
“Event Date” shall have the meaning set forth in Section 2(b).
“Filing Date” means, with respect to the Initial Registration Statement required hereunder, the thirtieth (30th) calendar day following the Closing and, with respect to any additional Registration Statements which may be required pursuant to this Agreement, the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities; provided, however, that if such Filing Date falls on a day that is not a Trading Day, then the Filing Date shall be the next succeeding Trading Day.
“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified Party” shall have the meaning set forth in Section 5(c).
“Indemnifying Party” shall have the meaning set forth in Section 5(c).
“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Losses” shall have the meaning set forth in Section 5(a).
“Permitted Blackout Period” means any period during which the Company suspends the availability of a Registration Statement and the related Prospectus pursuant to Section 3(j) in good faith because continued use would require disclosure of material non-public information regarding the Company or any of its Subsidiaries or would otherwise be materially detrimental to the Company or its stockholders.
“Plan of Distribution” shall have the meaning set forth in Section 2(a).
“Prior Registration Statement” means any registration statement, including any replacement, additional or successor covering the resale of the shares of Common Stock issued and issuable pursuant to the Prior Transaction Documents, as required by the registration rights agreement included therein.
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
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“Registrable Securities” means, as of any date of determination, (a) all Conversion Shares (assuming on such date the Preferred Stock is converted in full at the Floor Price (as defined in the Certificate of Designations) without regard to any conversion limitations therein and the payment of all dividends in shares of Common Stock), (b) any additional shares of Common Stock issuable in connection with any anti-dilution provisions of the Preferred Stock (in each case, without giving effect to any limitations on conversion or exercise set forth in the Certificate of Designations) and (c) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided that, unless and until Stockholder Approval has been obtained, the aggregate number of shares of Common Stock constituting Registrable Securities under clauses (a) and (b) shall not exceed the Exchange Cap (as defined in the Purchase Agreement); provided, further, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (i) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (ii) such Registrable Securities have been previously sold in accordance with Rule 144, or (iii) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders, as reasonably determined by the Company, upon the advice of counsel to the Company. For the avoidance of doubt, Registrable Securities do not include any shares of Common Stock issued or issuable as stock consideration to Foldlab in connection with any acquisition or other transaction, and the Company shall have no obligation to register any such shares under this Agreement.
“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 3(b), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“SEC Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.
“Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transfer Agent” means Broadridge Corporate Issuer Solutions, LLC, with a mailing address of 1155 Long Island Avenue, Edgewood, New York 11717, and any successor transfer agent of the Company.
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Section 2. Resale Registration.
(a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not then S-3 eligible, in which case such registration shall be on another appropriate form in accordance herewith, including Form S-1) and shall contain (unless otherwise directed by at least an 85% majority in interest of the Holders) substantially the “Plan of Distribution” attached hereto as Annex A and substantially the “Selling Stockholder” section attached hereto as Annex B; provided, however, that no Holder shall be required to be named as an “underwriter” without such Holder’s express prior written consent. Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause a Registration Statement filed under this Agreement (including, without limitation, under a Rule 415 offering) to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. (New York City time) on a Trading Day. The Company shall immediately notify the Holders via email of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. (New York City time) on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424. Failure to so notify the Holders within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(b).
(b) If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five (5) Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within ten (10) calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement or any other Registration Statement (unless, and only to the extent, the sole reason for such non-registration of all or any portion of the Registrable Securities is as a result of SEC Guidance, including Rule 415 or CDI 612.09, that limits or cuts back the number of Registrable Securities which may be included in a registration statement with respect to the Holders, in which case such limitation or cutback shall not constitute an Event or give rise to liquidated damages), or (v) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than fifteen (15) consecutive calendar days or more than an aggregate of twenty (20) calendar days (which need not be consecutive calendar days) during any 12-month period, excluding any days in a Permitted Blackout Period (any such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such ten (10) calendar day period is exceeded, and for purpose of clause (v) the date on which such fifteen (15) or twenty (20) calendar day period, as applicable, is exceeded being referred to as “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash or, at the Company’s election, in shares of Common Stock, as partial liquidated damages and not as a penalty, equal to the product of one percent (1.0%) multiplied by the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement for the Registrable Securities then held by such Holder, for each full or partial month during which such Event continues, with any partial month calculated on a daily pro rata basis. Any shares of Common Stock issued in lieu of cash shall be valued at the average closing price of the Common Stock on the Trading Market during the five (5) Trading Days immediately preceding the date on which such liquidated damages are payable and shall be issued subject to applicable law and Trading Market rules. Notwithstanding the foregoing, the aggregate liquidated damages payable to any Holder under this Section 2(b) shall not exceed six percent (6.0%) of the Subscription Amount paid by such Holder pursuant to the Purchase Agreement for the Registrable Securities then held by such Holder. If the Company fails to pay any liquidated damages pursuant to this Section in full within seven (7) days after the date payable, the Company will pay interest thereon at a rate of eight percent (8%) per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. Notwithstanding the foregoing, (x) the foregoing liquidated damages shall not accrue or be otherwise charged during any period in which the Holder is eligible to sell all of its Registrable Securities on any given day under Rule 144 without the volume or other limitations of such rule, or in reliance upon the exemption in Section 4(a)(1) under the Securities Act, (y) liquidated damages shall not accrue or be payable with respect to any Event under clause (iv) above to the extent that the failure to achieve the Effectiveness Date results from SEC Guidance, including any limitation or cutback under Rule 415 or CDI 612.09, or from the failure of a Holder to timely provide to the Company all information required to be provided by such Holder under Item 507 of Regulation S-K promulgated under the Securities Act or pursuant to Section 3(a) hereof, and (z) liquidated damages shall not accrue or be payable during any Permitted Blackout Period.
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(c) Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercially reasonable efforts to advocate with the Commission for the registration of all or a greater portion of Registrable Securities, including, without limitation, by advocating in accordance with CDI 612.09), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows: (i) first, the Company shall reduce or eliminate any securities to be included other than Registrable Securities; and (ii) second, the Company shall reduce Registrable Securities represented by Registrable Securities (applied, in the case that some Registrable Securities may be registered, to the Holders on a pro rata basis based on the total number of unregistered Registrable Securities held by such Holders). In the event of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.
Section 3. Registration Procedures.
In connection with the Company’s registration obligations hereunder, the Company shall:
(a) Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that the Company is notified of such objection in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”) on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which such Holder receives draft materials in accordance with this Section 3(a).
(b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.
(c) If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.
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(d) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, that in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its Subsidiaries, and the Company agrees that the Holders shall not have any duty of confidentiality to the Company or any of its Subsidiaries and shall not have any duty to the Company or any of its Subsidiaries not to trade on the basis of such information.
(e) Use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
(f) Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available on the EDGAR system need not be furnished in physical form.
(g) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.
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(i) If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates or book-entry statements representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates or book-entry statements shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.
(j) Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, without accruing or paying liquidated damages under Section 2(b), for a Permitted Blackout Period not to exceed sixty (60) consecutive calendar days or ninety (90) calendar days in the aggregate (which need not be consecutive days) in any 12-month period. During a Permitted Blackout Period, the Company shall not be required to disclose material non-public information regarding the Company or any of its Subsidiaries in order to maintain the availability of a Registration Statement or Prospectus.
(k) Comply with all applicable rules and regulations of the Commission.
(l) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three (3) Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
Section 4. Registration Expenses.
All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any Trading Market as required hereunder. In no event shall the Company be responsible for any broker-dealer or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.
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Section 5. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware.
(b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s failure to comply with any prospectus delivery requirements of the Securities Act through no fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). In no event shall the liability of a selling Holder under this Section 5 exceed, in the aggregate, the net proceeds actually received by such Holder from the sale of the Registrable Securities giving rise to such indemnification obligation, after deduction of commissions, discounts, fees and expenses paid by such Holder in connection with such sale.
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(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof, provided that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party. An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten (10) Trading Days of written notice thereof to the Indemnifying Party, provided that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder.
(d) Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding, after deduction of commissions, discounts, fees and expenses paid by such Holder in connection with such sale. The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.
Section 6. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
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(b) No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Except as set forth on Schedule 6(b) attached hereto and subject to the Prior Transaction Documents, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statement covering the resale of Registrable Securities other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the Company from filing (i) amendments to registration statements filed prior to the date of this Agreement, (ii) the Prior Registration Statement and any amendments thereto, in each case solely to the extent required by the Prior Transaction Documents, (iii) a registration statement on Form S-8 or Form S-4, (iv) any registration statement, or amendment thereto, required to satisfy registration rights or other contractual obligations existing as of the date of this Agreement, as in effect on the date hereof, or (v) provided that the Initial Registration Statement has been filed and has not been withdrawn, a registration statement for a primary offering by the Company, including a primary shelf registration statement, or amendments thereto. Nothing in this Section 6(b) shall limit the Company’s ability to include its own securities in a registration statement for a primary offering or primary shelf registration statement. Notwithstanding anything to the contrary in this Agreement, the Company may file, maintain, amend, supplement and use any Registration Statement and take any other action necessary to comply with and honor the registration rights set forth in the agreements listed on Schedule 6(b), including any priority, allocation and cutback provisions thereof, and the exercise of such rights and compliance therewith shall not constitute a breach of this Section 6(b) or a conflict with Section 6(i). In the event the Commission or SEC Guidance subsequently allows the inclusion of additional Registrable Securities, the Company shall promptly amend the Registration Statement or file a new Registration Statement to include such additional Registrable Securities that were previously cut back, on a pro rata basis as set forth in Section 2(c).
(c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to a Registration Statement.
(d) Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be excluded from the calculation of an Event and liquidated damages under Section 2(b) to the extent such periods constitute Permitted Blackout Periods.
(e) Piggy-Back Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans, and other than a registration statement filed, maintained, amended, supplemented or replaced pursuant to or to satisfy the Prior Transaction Documents, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen (15) days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144 or that are the subject of a then-effective Registration Statement; provided, further, that nothing in this Section 6(e) shall require the Company to include Registrable Securities in any registration statement filed pursuant to or to satisfy the Prior Transaction Documents or alter any priority, allocation, cutback or other registration rights under the Prior Transaction Documents.
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(f) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of a majority in interest (more than 50%) of the then outstanding Registrable Securities (for purposes of clarification, this includes any Registrable Securities issuable upon conversion of the Preferred Stock). If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the provisions of the first sentence of this Section 6(f). No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.
(g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.
(h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreement.
(i) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Notwithstanding the foregoing, the agreements listed on Schedule 6(b), and the Company’s compliance with and performance of its obligations thereunder, including any priority, allocation and cutback provisions thereof, shall not be deemed to impair the rights granted to the Holders under this Agreement or to conflict with this Agreement. Except as set forth on Schedule 6(b) (including the registration rights granted pursuant to the Prior Transaction Documents), neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.
(j) Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file or by electronic signature complying with the U.S. federal ESIGN Act of 2000, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
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(k) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.
(l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(m) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(n) Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.
(o) Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert with respect to such obligations or the transactions contemplated by this Agreement. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose.
(p) Third-Party Beneficiary. Except as expressly provided in the Purchase Agreement with respect to the Placement Agent’s rights thereunder, the Placement Agent shall be a third-party beneficiary solely of the indemnification and contribution provisions of this Agreement applicable to the Placement Agent and shall be entitled to rely upon and enforce such provisions.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
| iSPECIMEN INC. | ||
| By: | ||
| Name: | Shahin Behroyan | |
| Title: | Chief Executive Officer | |
[Signature Page to Registration Rights Agreement]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
Name of Holder:___________________________________________________________________________________
Signature of Authorized Signatory of Holder:_____________________________________________________________
Name of Authorized Signatory:________________________________________________________________________
Title of Authorized Signatory:_________________________________________________________________________
[Signature Page to Registration Rights Agreement]
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ANNEX A
PLAN OF DISTRIBUTION
Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:
| ● | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| ● | block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| ● | an exchange distribution in accordance with the rules of the applicable exchange; |
| ● | privately negotiated transactions; |
| ● | settlement of short sales; |
| ● | in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security; |
| ● | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
| ● | a combination of any such methods of sale; or |
| ● | any other method permitted pursuant to applicable law. |
The Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other brokers or dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
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In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.
The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information requirement under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
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ANNEX B
SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial owner of common stock, par value $0.0001 per share (the “Common Stock”), of iSpecimen Inc., a Delaware corporation (the “Company”), issuable upon conversion of the Company’s Series D Convertible Preferred Stock (the “Registrable Securities”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
(a) Full Legal Name of Selling Stockholder:_______________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:____________________________________________________________________________________________
(c) Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):____________________________________
2. Address for Notices to Selling Stockholder:
_______________________________________________________________________________________________
Telephone:_______________________________________________________________________________________
Email:___________________________________________________________________________________________
Contact Person:___________________________________________________________________________________
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3. Broker-Dealer Status:
(a) Are you a broker-dealer?
☐ Yes
☐ No
(b) If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?
☐ Yes
☐ No
Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c) Are you an affiliate of a broker-dealer?
☐ Yes
☐ No
(d) If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?
☐ Yes
☐ No
Note: If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
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4. Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.
(a) Type and amount of other securities beneficially owned by the Selling Stockholder:___________________________
________________________________________________________________________________________________
5. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% or more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:___________________________________________________________________________
_______________________________________________________________________________________________
The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.
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IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
| Dated: | ||
| Beneficial Owner: | ||
| By: | ||
| Name: | ||
| Title: | ||
PLEASE EMAIL A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO: Sichenzia Ross Ference Carmel LLP, 1185 Avenue of the Americas, 26th Floor, New York, NY 10036, Attention: Ross D. Carmel, Esq. (rcarmel@srfc.law), with a copy to Zarif Law Group P.C., 808 Springwood Avenue, Suite 110, Asbury Park, NJ 07712, Attention: Morris C. Zarif, Esq. (mzarif@zariflg.com).
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SCHEDULE 6(b)
EXISTING REGISTRATION RIGHTS
1. Registration rights granted to the purchasers under the May 8, 2026 Registration Rights Agreement, entered into in connection with the May 2026 private placement, with respect to the shares of Common Stock and the shares of Common Stock issuable upon exercise of the pre-funded warrants issued thereunder (including any shares issuable pursuant to the anti-dilution and top-up provisions thereof), including any priority, allocation and cutback provisions applicable thereunder.
2. Registration rights granted to the purchasers under the December 30, 2025 Registration Rights Agreement, entered into in connection with the Series C financing, with respect to the securities covered thereby, including any shares issuable pursuant to the anti-dilution, top-up or similar provisions thereof and any priority, allocation and cutback provisions applicable thereunder.
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Exhibit 10.3
PLACEMENT AGENCY AGREEMENT
November 5, 2026
PERSONAL AND CONFIDENTIAL
iSpecimen Inc.
8 Cabot Road, Suite 1800
Woburn, MA 01801
Attention: Shahin Behroyan, Chief Executive Officer
Dear Mr. Behroyan:
This agreement (the “Agreement”) constitutes the agreement between E.F. Hutton & Co. (the “Placement Agent”), on the one hand, and iSpecimen Inc., a Delaware corporation (the “Company” and, each of the Company and the Placement Agent, a “Party” and, together, the “Parties”), on the other hand, pursuant to which the Placement Agent shall serve as the exclusive placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (the “Preferred Stock” or the “Securities”), having a stated value of $1,000 per share and convertible into shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), having an aggregate purchase price of $400,000. The terms of the Placement and the Securities shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”), and nothing herein constitutes that the Placement Agent would have the power or authority to bind the Company or any Purchaser or an obligation for the Company to issue any Securities or complete the Placement. This Agreement, the Securities Purchase Agreement between the Company and the Purchasers (the “Purchase Agreement”), the Certificate of Designations of Preferences, Rights and Limitations of the Preferred Stock (the “Certificate of Designations”), the Registration Rights Agreement between the Company and the Purchasers (the “Registration Rights Agreement”), the Lock-Up Agreements described below, the Paying Agent Agreement described in Section 3, and the other documents executed and delivered by the Company and the Purchasers in connection with the Placement, are collectively referred to as the “Transaction Documents.” The closing of the Placement shall be referred to herein as the “Closing” and the date of the Closing shall be referred to herein as the “Closing Date.” The Company expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities and does not ensure the successful placement of the Securities or any portion thereof or the success of the Placement Agent with respect to securing any other financing on behalf of the Company. With the prior written consent of the Company, the Placement Agent may retain other brokers or dealers to act as sub-agents or selected dealers on its behalf in connection with the Placement.
The Company hereby confirms its agreement with the Placement Agent as follows:
Section 1. Agreement to Act as Placement Agent.
(a) On the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement, the Placement Agent shall be the exclusive placement agent in connection with the offering and sale by the Company of the Securities, with the terms of such offering (the “Offering”) to be subject to market conditions and negotiations between the Company, the Placement Agent and the prospective Purchasers. The Placement Agent will act on a reasonable best efforts basis and the Company agrees and acknowledges that there is no guarantee of the successful placement of the Securities, or any portion thereof, in the prospective Offering. Under no circumstances will the Placement Agent or any of its Affiliates (as defined below) be obligated to underwrite or purchase any of the Securities for its own account or otherwise provide any financing. The Placement Agent shall act solely as the Company’s agent and not as principal. The Placement Agent shall have no authority to bind the Company with respect to any prospective offer to purchase Securities and the Company shall have the sole right to accept offers to purchase Securities and may reject any such offer, in whole or in part. Subject to the terms and conditions hereof, payment of the purchase price for, and delivery of, the Securities shall be made at the Closing of the Offering as provided in the Purchase Agreement. As compensation for services rendered, on the Closing Date, the Company shall pay to the Placement Agent the fees and expenses set forth below:
(i) a cash fee equal to four percent (4.0%) of the aggregate gross proceeds raised in the Offering (the “Cash Fee”);
(ii) a non-refundable, non-accountable expense allowance equal to one percent (1.0%) of the aggregate gross proceeds raised in the Offering (the “Non-Accountable Expense Allowance”); and
(iii) the reimbursement of expenses provided for in Section 7.
The foregoing fees are due and payable to the Placement Agent immediately upon the Closing of the Offering and shall be disbursed to the Placement Agent, through the Paying Agent, simultaneously with the delivery of the proceeds of the Offering to the Company, in accordance with the Flow of Funds Memorandum (as defined in Section 3). For the avoidance of doubt, in the event the Company proceeds with a Financing (as defined below) outside of the Placement Agent, or with an Introduced Party (as defined in Section 15) during the Term (as defined below) or the Tail Period (as defined in Section 15), the Placement Agent shall be entitled to receive full compensation at the percentages stated above.
(b) The term of the Placement Agent’s engagement hereunder (the “Term”) shall commence on the date of this Agreement and shall continue until the date that is six (6) months after the date of this Agreement (the “Initial Term”), and thereafter until terminated (i) at any time by written notice from the Placement Agent, or (ii) by the Company, on or after the expiration of the Initial Term, by thirty (30) days’ prior written notice to the Placement Agent. During the Term, the Placement Agent shall be the Company’s exclusive placement agent, and the Company shall not, directly or indirectly, engage, solicit or negotiate with any other placement agent, underwriter, sales agent, finder or other financial intermediary with respect to, any (A) private placement, including any PIPE, (B) registered direct offering or other public offering of equity or equity-linked securities, or (C) “at-the-market” offering, in each case of the Company’s equity or equity-linked securities (each, a “Financing”), and the Placement Agent shall act as lead placement agent on any such private placement or registered direct offering and as sole sales agent on any such at-the-market offering, in each case on terms consistent with this Agreement and the Engagement Letter. The Parties acknowledge that the foregoing exclusivity corresponds to the exclusive engagement set forth in Section 1 of the Engagement Letter, and agree that the Term and the exclusivity hereunder shall run from the date of this Agreement notwithstanding any earlier Closing or any other event that may have terminated or be deemed to have terminated the Engagement Letter under Section 6 thereof. Notwithstanding anything to the contrary contained herein, the provisions concerning the payment of fees, reimbursement of expenses, the tail, the right of first refusal, indemnification and contribution, confidentiality, conflicts, independent contractor status, the survival of the Engagement Letter (as defined in Section 11) and waiver of the right to trial by jury will survive any expiration or termination of this Agreement. Notwithstanding anything to the contrary contained herein, the Company has the right to terminate this Agreement for cause in compliance with FINRA Rule 5110(g)(5)(B)(i). The exercise of such right of termination for cause eliminates the Company’s obligations with respect to the provisions relating to the tail fees and the right of first refusal. Notwithstanding anything to the contrary contained in this Agreement, in the event that the Offering pursuant to this Agreement shall not be carried out for any reason whatsoever during the Term, the Company shall be obligated to pay to the Placement Agent its actual and accountable out-of-pocket expenses related to the Offering (including the fees and disbursements of the Placement Agent’s legal counsel) as set forth in Section 7 hereunder.
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(c) Nothing in this Agreement shall be construed to limit the ability of the Placement Agent or its Affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory, or any other business relationship with Persons (as defined below) other than the Company. As used herein, (i) “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof), or other entity of any kind and (ii) “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act of 1933, as amended (the “Securities Act”). The Company shall furnish, or cause to be furnished, to the Placement Agent all information requested by the Placement Agent for the purpose of rendering services hereunder and conducting due diligence (all such information being the “Information”). In addition, the Company agrees to make available to the Placement Agent upon request from time to time the officers, directors, accountants, counsel and other advisors of the Company. The Company recognizes and confirms that the Placement Agent (A) will use and rely upon the Information, including any documents provided to investors in the Offering (the “Offering Documents”), and upon information available from generally recognized public sources in performing the services contemplated by this Agreement without having independently verified the same; (B) does not assume responsibility for the accuracy or completeness of the Offering Documents or the Information and such other information; and (C) will not make an appraisal of any of the assets or liabilities of the Company. Upon reasonable request, the Company will meet with the Placement Agent or its representatives to discuss all information relevant for disclosure in the Offering Documents and will cooperate in any investigation undertaken by the Placement Agent thereof, including any document included or incorporated by reference therein. At the request of the Placement Agent, the Company shall deliver such legal letters (including, without limitation, negative assurance letters), opinions, a comfort letter dated as of the Closing Date, officers’ and secretary’s certificates, chief financial officer’s certificates and good standing certificates, all in form and substance reasonably satisfactory to the Placement Agent and its counsel, as is customary for the Offering. The Placement Agent shall be a third-party beneficiary of any representations, warranties, covenants, closing conditions and closing deliverables made by the Company in any Transaction Document, including representations, warranties, covenants, closing conditions and closing deliverables made to any investor in the Offering.
(d) The Closing of the Offering shall be conducted pursuant to the Purchase Agreement via wire transfer through the Paying Agent, and such Securities shall be registered in such name or names and shall be in such denominations as the Purchasers shall direct. The Placement Agent shall not have any independent obligation to verify the accuracy or completeness of any information contained in the Purchase Agreement or other subscription documents for the Offering (the “Subscription Documents”) or the authenticity, sufficiency or validity of any wire or payment delivered by any prospective Purchaser in payment for the Securities, nor shall the Placement Agent incur any liability with respect to any such verification or failure to verify.
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Section 2. Representations, Warranties and Covenants of the Company.
(a) The Placement Agent shall be a third-party beneficiary of the representations and warranties of the Company to the Purchasers in the Purchase Agreement.
(b) Any certificate signed by an officer of the Company and delivered to the Placement Agent or to counsel for the Placement Agent shall be deemed to be a representation and warranty by the Company to the Placement Agent as to the matters set forth therein.
(c) The Company acknowledges that the Placement Agent will rely upon the accuracy and truthfulness of the foregoing representations and warranties and hereby consents to such reliance.
(d) In connection with the Offering of the Securities, the Company has not published, distributed, issued, posted or otherwise used or employed, and shall not publish, distribute, issue, post or otherwise use or employ, (i) any form of general solicitation or advertising within the meaning of Rule 502 under the Securities Act (“General Solicitation”) other than with the prior written consent of the Placement Agent, or (ii) any General Solicitation that constitutes a written communication within the meaning of Rule 405 under the Securities Act (“Written General Solicitation Material”). Each individual Written General Solicitation Material, if any, does not and will not conflict with the information contained in the SEC Reports (as defined below), and does not and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(e) The Company will furnish a copy of any amendment or supplement to a Written General Solicitation Material to the Placement Agent and counsel for the Placement Agent and obtain the Placement Agent’s written consent prior to any publication, distribution, issuance, posting or other use or employment of any such amendment or supplement.
(f) If at any time after the date hereof and prior to the Closing, any event shall have occurred as a result of which any Written General Solicitation Material, as then amended or supplemented, would conflict with the information in the Company’s reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (collectively, the “SEC Reports”), or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein or in the SEC Reports, in light of the circumstances under which they were made, not misleading, or, if for any other reason it shall become necessary to amend or supplement any Written General Solicitation Material, the Company shall promptly notify the Placement Agent and, upon its request, shall use its best efforts to ensure that all purchasers or expected purchasers of the Securities receive corrected Written General Solicitation Materials.
(g) The Company represents, warrants and agrees that all sales of the Securities shall be made only to “accredited investors” as defined in Rule 501(a) under the Securities Act, and the Company shall obtain from each Purchaser a completed accredited investor questionnaire identifying the paragraph(s) of Rule 501(a) under which such Purchaser qualifies. The Company acknowledges that the Placement Agent’s determination of whether a filing pursuant to FINRA Rule 5123 is required with respect to the Offering will depend on such qualifications, and the Company shall cooperate with the Placement Agent in making any such filing. Notwithstanding the foregoing, the Placement Agent shall use commercially reasonable efforts to assist its customers to complete the Subscription Documents.
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(h) None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the Offering, any beneficial owner of twenty percent (20%) or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale nor any compensated solicitor or any director, executive officer or other officer of the compensated solicitor participating in the Offering (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event, including by obtaining completed bad actor questionnaires from each of its directors, executive officers and beneficial owners of twenty percent (20%) or more of its outstanding voting equity securities. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Placement Agent a copy of any disclosures provided thereunder.
(i) The Company will notify the Placement Agent in writing, prior to the Closing Date, of (i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating to any Issuer Covered Person.
(j) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and the other Transaction Documents, including, without limitation, the filing of the Certificate of Designations and the issuance of the Securities, and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors of the Company (the “Board”) or the Company’s stockholders in connection herewith or therewith. This Agreement and each other Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(k) Issuance of the Securities. The Securities will be duly authorized, validly issued, fully paid and non-assessable upon payment of the purchase price therefor to the Company in accordance with the terms of the Purchase Agreement, and will have the applicable rights, preferences and priorities set forth in the Company’s Fifth Amended and Restated Certificate of Incorporation, including the Certificate of Designations (as the same may be amended or restated from time to time, collectively, the “Charter”). The shares of Common Stock issuable upon conversion of the Preferred Stock (the “Underlying Shares”), when issued in accordance with the Certificate of Designations, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens, charges, pledges, security interests, encumbrances or other restrictions imposed by the Company other than restrictions provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock the number of shares of Common Stock required to be reserved pursuant to Section 4.9 of the Purchase Agreement. The issuance of the Securities and the Underlying Shares is not subject to any preemptive rights, rights of first refusal or other similar rights of any securityholder of the Company. No holder of the Securities will be subject to personal liability solely by reason of being such a holder.
(l) Each of the representations and warranties (together with any related disclosure schedules thereto) made by the Company to the Purchasers in the applicable Transaction Documents is hereby incorporated herein by reference, as though fully restated herein, and is hereby made to, and in favor of, the Placement Agent.
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Section 3. Delivery and Payment; Paying Agent. The Closing shall occur remotely via the electronic exchange of documents and signatures (or at such other place as shall be agreed upon by the Parties). Subject to the terms and conditions hereof, at the Closing, payment of the purchase price for the Securities sold on the Closing Date shall be made by the Purchasers by federal funds wire transfer to the escrow account established with InBank, as escrow agent (the “Paying Agent”), pursuant to that certain Escrow Agreement, dated as of the date hereof, among the Company, the Placement Agent, Corporate Escrow Management Inc., as escrow manager, and the Paying Agent (the “Paying Agent Agreement”), and shall be disbursed by the Paying Agent on the Closing Date in accordance with a flow of funds memorandum executed by the Company and the Placement Agent (the “Flow of Funds Memorandum”). The Securities shall be registered in such name or names and shall be in such denominations as the Placement Agent may request at least one (1) business day before the time of purchase. The fees of the Paying Agent and the escrow manager under the Paying Agent Agreement shall be paid by the Placement Agent and reimbursed to the Placement Agent through the Flow of Funds Memorandum as an accountable transaction expense pursuant to Section 7. All actions taken at the Closing shall be deemed to have occurred simultaneously. The Company and the Placement Agent may agree to conduct one or more Closings of the Offering.
Section 4. Closing Conditions.
The obligations of the Placement Agent, and the closing of the sale of the Securities, are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein and in the Purchase Agreement, to the performance by the Company of its obligations hereunder and under the Purchase Agreement, and to each of the following additional conditions, any of which may be waived in writing by the Placement Agent:
(a) Corporate Proceedings and Legal Opinion. All corporate proceedings and other legal matters incident to the authorization, execution and delivery of this Agreement, the Purchase Agreement, the Certificate of Designations, the Registration Rights Agreement, and the transactions contemplated hereby shall be completed or resolved in a manner reasonably satisfactory to the Placement Agent. The Placement Agent shall have received a legal opinion from Sichenzia Ross Ference Carmel LLP (“Company Counsel”), addressed to the Placement Agent and the Purchasers and dated as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agent, which opinion shall include, without limitation, opinions as to the due authorization and valid issuance of the Preferred Stock and the Underlying Shares, the effectiveness of the Certificate of Designations under the laws of the State of Delaware and the availability of the exemption from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D thereunder, based on the representations of the Company and the Purchasers in the Transaction Documents.
(b) Certificate of Designations. The Certificate of Designations shall have been filed with and accepted by the Secretary of State of the State of Delaware and shall be in full force and effect, and the Placement Agent shall have received a copy thereof certified by the Secretary of State of the State of Delaware.
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(c) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, in the Placement Agent’s sole judgment after consultation with the Company, there shall not have occurred any material adverse change or development involving a prospective material adverse change in the condition or the business activities, financial or otherwise, of the Company since the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2025 on April 1, 2026 (a “Material Adverse Change”).
(d) Officer’s, Secretary’s and Chief Financial Officer’s Certificates. The Placement Agent shall have received customary certificates of the Company’s Chief Executive Officer (the “Officer’s Certificate”) as to the accuracy of the representations and warranties contained in the Purchase Agreement and the performance of the Company’s covenants thereunder, a certificate of the Company’s Secretary (or other suitable executive officer) (the “Secretary’s Certificate”) certifying (i) that the Company’s organizational documents (including the Certificate of Designations) are true and complete, have not been modified and are in full force and effect; (ii) that the resolutions of the Board (or any authorized committee thereof) relating to the Placement and the Certificate of Designations are in full force and effect and have not been modified; and (iii) as to the incumbency of the officers of the Company, and a certificate of the Company’s Chief Financial Officer (the “CFO Certificate”) as to the Company’s cash and cash equivalents, indebtedness and any material off-balance sheet or undisclosed liabilities as of the Closing Date. Each of the Officer’s Certificate, the Secretary’s Certificate and the CFO Certificate must be dated as of the Closing Date, and all documents referenced in the Secretary’s Certificate must be attached thereto. The Company shall have taken no action designed to terminate, or likely to have the effect of terminating, the registration of the Common Stock under the Exchange Act or delisting or suspending from trading the Common Stock from Nasdaq, nor has the Company received any information suggesting that the Securities and Exchange Commission (the “Commission”) or Nasdaq is contemplating terminating such registration or listing.
(e) Comfort Letter. The Placement Agent shall have received from the Company’s independent registered public accounting firm a “comfort letter,” dated as of the Closing Date, addressed to the Placement Agent and in form and substance reasonably satisfactory to the Placement Agent, and the Company shall have caused such firm to participate in a due diligence call with the Placement Agent and its counsel prior to the Closing.
(f) Certificate of Good Standing. The Company shall deliver a certificate of good standing of the Company issued by the Secretary of State of the State of Delaware as of a date within five (5) business days of the Closing Date.
(g) Lock-Up Agreements. The Placement Agent shall have received duly executed lock-up agreements in the form attached as an exhibit to the Purchase Agreement and otherwise in form and substance reasonably satisfactory to the Placement Agent (the “Lock-Up Agreements”), duly executed and delivered by each of the Company’s directors and executive officers, pursuant to which such persons agree not to, directly or indirectly, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any shares of the Company’s securities during the ninety (90) day period following the Closing, subject to customary exceptions.
(h) Transfer Agent Instructions. The Placement Agent shall have received copies of the irrevocable transfer agent instructions and the share reservation letter required to be delivered pursuant to the Purchase Agreement, each acknowledged by the Company’s transfer agent.
(i) Purchase Agreement and Other Deliverables. The Company shall have delivered, or caused to be delivered, all deliverables set forth in the Purchase Agreement, including the Registration Rights Agreement, in form and substance reasonably satisfactory to the Placement Agent and its counsel, and such agreements shall be in full force and effect.
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(j) No Legal Impediment. No statute, regulation, rule, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits or materially adversely affects any of the transactions contemplated by this Agreement.
If any of the foregoing conditions shall not have been satisfied on or before the Closing Date, the Placement Agent may terminate this Agreement, without liability to the Company, by written notice to the Company. Any such termination shall not affect the obligations of the Company to reimburse the Placement Agent for expenses or its indemnification and contribution obligations as set forth in this Agreement.
Section 5. Covenants and Agreements of the Company.
The Company further covenants and agrees with the Placement Agent as follows:
(a) Blue Sky Compliance. The Company will cooperate with the Placement Agent and the Purchasers in endeavoring to qualify the Securities for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the Purchasers may reasonably request and will make such applications, file such documents and furnish such information as may be reasonably required for that purpose, provided the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent, and provided further that the Company shall not be required to produce any new disclosure documents. The Company will, from time to time, prepare and file such statements, reports and other documents as are or may be required to continue such qualifications in effect for so long a period as the Placement Agent may reasonably request for distribution of the Securities. The Company will advise the Placement Agent promptly of the suspension of the qualification or registration of (or any such exemption relating to) the applicable Securities for the offering, sale or trading in any jurisdiction or any initiation or threat of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption, the Company shall use its commercially reasonable efforts to obtain the withdrawal thereof at the earliest possible moment.
(b) Amendments, Supplements and Other Matters. The Company will comply with the Securities Act and the Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the sale of the Securities as contemplated in this Agreement. If during the Offering period, any event shall occur as a result of which, in the judgment of the Company or in the opinion of the Placement Agent or Zarif Law Group P.C. (“Placement Agent Counsel”), acting as counsel for the Placement Agent, it becomes necessary to amend or supplement the SEC Reports in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the SEC Reports, the Company will promptly prepare an appropriate amendment or supplement to the SEC Reports that is necessary in order to make the statements therein as so amended or supplemented, in light of the circumstances under which they were made, not misleading, or so that the SEC Reports, as so amended or supplemented, will comply with law. Before amending the SEC Reports, the Company will furnish the Placement Agent with a copy of such proposed amendment or supplement and will not distribute any such amendment or supplement to which the Placement Agent reasonably objects.
(c) Copies of any Amendments and Supplements to the SEC Reports. The Company will furnish the Placement Agent, without charge, during the period beginning on the date hereof and ending on the Closing Date, as many copies of the SEC Reports and other documents to be furnished to the Purchasers as the Placement Agent may reasonably request; provided that the Company’s filing of the SEC Reports on the Electronic Data Gathering, Analysis and Retrieval system of the Commission shall be deemed to satisfy this covenant.
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(d) Transfer Agent. The Company will maintain, at its expense, a transfer agent for the Securities and the Common Stock.
(e) Periodic Reporting Obligations. For as long as the Company remains subject to the reporting requirements of the Exchange Act, the Company will duly file, on a timely basis, with the Commission and Nasdaq, or any successor U.S. national securities exchange, all reports and documents required to be filed under the Exchange Act within the time periods and in the manner required by the Exchange Act.
(f) Additional Documents. The Company will enter into any customary Closing documentation as the Placement Agent or the Purchasers deem necessary or appropriate to consummate the Offering, all of which will be in form and substance reasonably acceptable to the Placement Agent and the Purchasers.
(g) No Manipulation of Price. The Company has not taken, directly or indirectly, any action designed to cause or result in, or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any of its securities, including of its Common Stock.
(h) Nasdaq Matters. The Company shall (i) timely submit a listing of additional shares notification to Nasdaq with respect to the Underlying Shares and (ii) not issue any shares of Common Stock pursuant to the Transaction Documents in excess of the Exchange Cap (as defined in the Purchase Agreement) unless and until the Stockholder Approval (as defined in the Purchase Agreement) has been obtained.
(i) Form D; Form 8-K; Press Release. The Company shall file a Form D with the Commission with respect to the Securities within fifteen (15) days after the Closing Date, shall file a Current Report on Form 8-K disclosing the material terms of the Offering (including the Transaction Documents as exhibits thereto) within the time required by Section 4.4 of the Purchase Agreement, and shall provide the Placement Agent and Placement Agent Counsel with a reasonable opportunity to review and comment on such Form 8-K and any press release relating to the Offering prior to filing or issuance.
(j) Acknowledgment. The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the Board and may not be used, reproduced, disseminated, quoted or referred to, without the Placement Agent’s prior written consent.
(k) Announcement of Offering. The Company acknowledges and agrees that the Placement Agent may, subsequent to the Closing and at the Placement Agent’s expense, make public its involvement with the Offering.
(l) Reliance on Others. The Company confirms that it will rely on its own counsel and accountants for legal and accounting advice.
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(m) Research Matters. By entering into this Agreement, the Placement Agent does not provide any promise, either explicitly or implicitly, of favorable or continued research coverage of the Company, and the Company hereby acknowledges and agrees that the Placement Agent’s selection as placement agent for the Offering was in no way conditioned, explicitly or implicitly, on the Placement Agent providing favorable or any research coverage of the Company. In accordance with FINRA Rule 2241, the Parties acknowledge and agree that the Placement Agent has not directly or indirectly offered favorable research, a specific rating or a specific price target, or threatened to change research, a rating or a price target, to the Company or as inducement for the receipt of business or compensation. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Placement Agent with respect to any conflict of interest that may arise from the fact that the views expressed by its independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by the Placement Agent’s investment banking division. The Company acknowledges that the Placement Agent is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short positions in debt or equity securities of the Company.
Section 6. Conditions of the Obligations of the Placement Agent.
The obligations of the Placement Agent hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 2 and in the Transaction Documents, in each case as of the date hereof and as of the Closing Date as though then made, to the timely performance by the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions:
(a) Transaction Documents. The Transaction Documents between the Company and the Purchasers shall have been executed and delivered.
(b) Corporate Proceedings. All corporate proceedings and other legal matters in connection with this Agreement and the sale and delivery of the Securities shall have been completed or resolved in a manner reasonably satisfactory to Placement Agent Counsel.
(c) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, in the Placement Agent’s sole judgment after consultation with the Company, there shall not have occurred any (i) material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the subsidiaries of the Company (the “Subsidiaries”), taken as a whole, or (iii) material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document.
(d) Placement Agent Compensation. The Cash Fee and the Non-Accountable Expense Allowance calculated in the manner provided in Section 1(a), and reimbursement of expenses as set forth in Section 7, shall have been paid or delivered to the Placement Agent by wire transfer of immediately available funds through the Paying Agent in accordance with the Flow of Funds Memorandum.
If any condition specified in this Section 6 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement Agent by notice to the Company at any time on or prior to the Closing Date, which termination shall be without liability on the part of any Party to any other Party, except that Section 7 (Payment of Expenses), Section 8 (Indemnification and Contribution), Section 9 (Representations and Indemnities to Survive Delivery), Section 11 (Engagement Letter; Survival) and Section 15 (Tail; Right of First Refusal) shall at all times be effective and shall survive such termination.
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Section 7. Payment of Expenses.
(a) The Company shall reimburse the Placement Agent promptly upon request for all reasonable, documented and accountable out-of-pocket expenses actually incurred in connection with the Offering, whether or not there is a Closing of the Offering, including, but not limited to, road show and travel expenses (including, if applicable, the costs associated with the use of a third-party electronic road show service), due diligence expenses, the costs of background checks on the Company’s officers and directors and any of its stockholders designated by the Placement Agent, the costs associated with the Placement Agent’s use of book-building and compliance software, the fee of the Paying Agent, the fees and expenses of Placement Agent Counsel and any other independent advisors selected and retained by the Placement Agent, and all fees, expenses and disbursements required under the “blue sky” securities laws of such states and other jurisdictions as the Placement Agent may reasonably designate (with the Company’s consent, which shall not be unreasonably withheld); provided that the fees and expenses of Placement Agent Counsel reimbursable to the Placement Agent under this Section 7 shall not exceed $80,000. Placement Agent Counsel shall be a third-party beneficiary of the expense reimbursement obligations set forth in this Section 7 and may be paid directly from the proceeds of the Offering pursuant to the Flow of Funds Memorandum.
(b) The Company will bear all fees, disbursements and expenses in connection with the Offering, including, without limitation, the Company’s legal and accounting fees and disbursements; the costs of preparing, printing, mailing and delivering the registration statement to be filed pursuant to the Registration Rights Agreement, the prospectus contained therein and amendments and supplements thereto, any other offering materials, this Agreement and related documents (all in such quantities as the Placement Agent may reasonably require); the fees of the Secretary of State of the State of Delaware in connection with the filing of the Certificate of Designations; the fees of the Company’s transfer agent; the costs of any “due diligence” meetings; filing fees (including Commission filing fees), costs and expenses (including third party expenses and disbursements) incurred in registering the resale of the Underlying Shares; Nasdaq listing fees; FINRA filing fees, if any; costs and expenses of making any required filings or notices under applicable state securities or “blue sky” laws as specified by the Placement Agent, including Form D filings under Regulation D; but excluding those costs and expenses that FINRA rules require to be borne by a placement agent or underwriter. The Company acknowledges that the Company is liable to pay the fees of Placement Agent Counsel on the Placement Agent’s behalf, subject to the cap set forth in Section 7(a), and that such fees shall be paid from the proceeds of the Offering pursuant to the Flow of Funds Memorandum.
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Section 8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the Placement Agent, its Affiliates, and each person controlling the Placement Agent (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents, stockholders and employees of the Placement Agent, its Affiliates and each such controlling person (the Placement Agent, and each such entity or person, an “Indemnified Person”) from and against any losses, claims, damages, judgments, assessments, costs and other liabilities, including reasonable attorneys’ fees (collectively, the “Liabilities”), and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of one counsel for all Indemnified Persons, except as otherwise expressly provided herein) (collectively, the “Expenses”) as they are incurred by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified Person is a party thereto, (i) caused by a breach by the Company of any of its representations, warranties or covenants contained in this Agreement or in any certificate delivered by or on behalf of the Company in connection with this Agreement, (ii) caused by, or arising out of or in connection with, any untrue statement or alleged untrue statement of a material fact contained in the SEC Reports or the Offering Documents or by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (other than untrue statements or alleged untrue statements in, or omissions or alleged omissions from, information relating to an Indemnified Person furnished in writing by or on behalf of such Indemnified Person expressly for use in such documents), or (iii) otherwise arising out of or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services or transactions; provided, however, that, in the case of clause (iii) only, the Company shall not be responsible for any Liabilities or Expenses of any Indemnified Person that have resulted primarily from such Indemnified Person’s (x) gross negligence, bad faith or willful misconduct in connection with any of the advice, actions, inactions or services referred to above or (y) use of any Offering materials or information concerning the Company in connection with the offer or sale of the Securities in the Offering which were not authorized for such use by the Company and which use constitutes gross negligence, bad faith or willful misconduct. The Company also agrees to reimburse each Indemnified Person for all Expenses as they are incurred in connection with enforcing such Indemnified Person’s rights under this Agreement. In this regard, and without limitation, the Company acknowledges that the Placement Agent is not responsible for the actions of the Introduced Parties or their agents. The Company acknowledges that none of the Indemnified Persons is acting as an attorney, accountant or negotiator, that the Placement Agent will not make any recommendations about the Offering, and that the Company will seek its own professional advice with respect to any transaction.
(b) Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to which indemnity may be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any liability which the Company may have on account of this indemnity or otherwise to such Indemnified Person, except to the extent the Company shall have been prejudiced by such failure. The Company shall, if requested by the Placement Agent, assume the defense of any such action including the employment of counsel reasonably satisfactory to the Placement Agent, which counsel may also be Company Counsel. Any Indemnified Person shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense and employ counsel or (ii) the named parties to any such action (including any impleaded parties) include such Indemnified Person and the Company, and such Indemnified Person shall have been advised in the reasonable opinion of counsel that there is an actual conflict of interest that prevents the counsel selected by the Company from representing both the Company (or another client of such counsel) and any Indemnified Person; provided that the Company shall not in such event be responsible hereunder for the fees and expenses of more than one firm of separate counsel for all Indemnified Persons in connection with any action or related actions, in addition to any local counsel. The Company shall not be liable for any settlement of any action effected without its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the Placement Agent (which shall not be unreasonably withheld), settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which indemnification or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination includes an unconditional release of each Indemnified Person from all Liabilities arising out of such action for which indemnification or contribution may be sought hereunder. The indemnification required hereby shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.
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(c) In the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement, the Company shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand, and the Placement Agent and any other Indemnified Person, on the other hand, in connection with the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the Company contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities and Expenses in excess of the amount of fees actually received by the Placement Agent pursuant to this Agreement. For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement Agent, on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as (i) the total value paid or contemplated to be paid to or received or contemplated to be received by the Company in the transaction or transactions that are within the scope of this Agreement, whether or not any such transaction is consummated, bears to (ii) the fees paid to the Placement Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.
(d) The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services or transactions except for Liabilities (and related Expenses) of the Company that are finally judicially determined to have resulted primarily from such Indemnified Person’s gross negligence or willful misconduct in connection with any such advice, actions, inactions or services.
(e) The reimbursement, indemnity and contribution obligations of the Company set forth herein shall apply to any modification of this Agreement and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person’s services under or in connection with, this Agreement.
(f) The Placement Agent and the Company agree that the obligations of each of the Parties are solely corporate obligations, and that no officer, director, employee, agent or stockholder of either Party shall be subjected to any personal liability whatsoever to any person, nor will any claim for liability or suit be asserted by, or on behalf of, either the Placement Agent or the Company. In no event shall the Placement Agent be liable to the Company, whether a claim be in tort, contract or otherwise, for any amount in excess of the total amount of fees paid by the Company to the Placement Agent under this Agreement.
Section 9. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties and other statements of the Company or any person controlling the Company, of its officers, and of the Placement Agent set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Placement Agent, the Company, or any of its or their partners, officers or directors or any controlling person, as the case may be, and will survive delivery of and payment for the Securities sold hereunder and any termination of this Agreement. A successor to the Placement Agent, or to the Company, its directors or officers or any person controlling the Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Agreement.
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Section 10. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or e-mailed and confirmed to the Parties hereto as follows:
If to the Placement Agent:
E.F. Hutton & Co.
745 Fifth Avenue, 34th Floor & PH
New York, NY 10151
Attention: Joseph T. Rallo
Email: jrallo@efhutton.com
With a copy (which shall not constitute notice) to:
Zarif Law Group P.C.
808 Springwood Avenue, Suite 110
Asbury Park, NJ 07712
Attention: Morris C. Zarif, Esq.
Email: mzarif@zariflg.com
If to the Company:
iSpecimen Inc.
8 Cabot Road, Suite 1800
Woburn, MA 01801
Attention: Shahin Behroyan, Chief Executive Officer
Email: sbehroyan@ispecimen.com
With a copy (which shall not constitute notice) to:
Sichenzia Ross Ference Carmel LLP
1185 Avenue of the Americas, 26th Floor
New York, NY 10036
Attention: Ross D. Carmel, Esq.
Email: rcarmel@srfc.law
Any Party hereto may change the address for receipt of communications by giving written notice to the others.
Section 11. Engagement Letter; Survival.
(a) The Parties acknowledge that this Agreement is the “Definitive Agreement” contemplated by Section 3 of that certain letter agreement, dated April 14, 2026, between the Company and the Placement Agent (the “Engagement Letter”), with respect to the Offering. This Agreement is intended to implement, and not to supersede, terminate or diminish, the Engagement Letter. The Engagement Letter shall remain in full force and effect in accordance with its terms, including with respect to any Financing (as defined therein) other than the Offering, and nothing in this Agreement (including Section 17(a)) shall be construed to terminate, waive, release or otherwise limit any right of the Placement Agent under the Engagement Letter, including, without limitation, the Placement Agent’s rights under Sections 2 (Fees), 4 (Expense Reimbursement), 5 (Lock-Ups), 6 (Term & Tail), 7 (Company’s Representations & Warranties), 10 (Exculpation), 11 (Indemnity/Hold Harmless), 12 (Prevailing Party) and 14 (Confidentiality) thereof, each of which is hereby ratified and confirmed and shall survive the execution and delivery of this Agreement and the Closing.
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(b) Consistent with Section 3 of the Engagement Letter, in no event shall any roles, fees (including allocations) or reimbursable expenses payable to the Placement Agent hereunder be less than as set forth in the Engagement Letter. In the event of any conflict or inconsistency between this Agreement and the Engagement Letter with respect to the Offering, the provision that is more favorable to the Placement Agent shall control; provided that, for the avoidance of doubt, the compensation payable to the Placement Agent in respect of the Offering shall not be duplicated. Notwithstanding the foregoing or Section 5 of the Engagement Letter, the lock-up requirements applicable to the Offering shall be solely as set forth in Section 4(g), Section 16 and the Lock-Up Agreements. Without limiting the foregoing, the Company acknowledges that the Term and exclusivity set forth in Section 1(b), the Tail Period set forth in Section 15(a) and the ROFR Period set forth in Section 15(b) each commence on the date of this Agreement, are of the same duration as, and are in addition to and not in substitution for, the corresponding provisions of the Engagement Letter, and shall not be shortened by reason of any Closing, expiration or termination that occurred or is deemed to have occurred under the Engagement Letter prior to the date hereof.
Section 12. Successors and Assignment. This Agreement will inure to the benefit of and be binding upon the Parties hereto, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 8 hereof and Placement Agent Counsel as provided in Section 7, and to their respective successors and personal representatives, and no other person will have any right or obligation hereunder.
Section 13. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
Section 14. Governing Law Provisions.
(a) This Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect and in all other respects by the internal laws of the State of New York, without regard to the conflict of laws principles thereof. The Placement Agent and the Company agree that with respect to any controversy or claim relating to, arising under or involving this Agreement or breach thereof (a “Claim”), the matter shall first be submitted for mediation through the Judicial Arbitration and Mediation Service, Inc. (“JAMS”) and its applicable rules in New York, New York; provided, however, that in the case of a breach or threatened breach of Section 15 or Section 16 hereof, the Placement Agent may seek and obtain, in addition to any remedies available under this Agreement or applicable law, an injunction or other equitable relief from any court of competent jurisdiction and nothing in this Agreement shall in any way limit or condition its right and recourse to seek and obtain such equitable relief. In the event that the Placement Agent and the Company are not able to agree on a mediator within thirty (30) days of the first Party seeking mediation, the presiding judge of the court in which venue would lie for the filing of a complaint for relief in such Claim shall have jurisdiction to appoint a mediator. The Parties covenant that they will participate in the mediation in good faith.
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(b) In the event that the Placement Agent and the Company are unable to resolve any Claim after mediation as set forth in the preceding paragraph, then the Parties hereby agree that such Claim shall be submitted to JAMS for final and binding arbitration pursuant to its Comprehensive Arbitration Rules and Procedures (the “Arbitration Rules”) in New York, New York. The arbitration shall be conducted before a neutral arbitrator who shall be an attorney or retired judge and shall be selected in accordance with the Arbitration Rules. The arbitrator’s award shall be final and binding on all Parties. Except to the extent otherwise required pursuant to the applicable JAMS rules and procedures and applicable law, each Party will pay the fees of its respective attorney(s), expert(s) and other fees.
(c) Without limiting the mediation and arbitration provisions set forth above, each Party hereby irrevocably agrees and consents to be subject to the jurisdiction of the state courts sitting in New York County, State of New York, or if such state courts lack jurisdiction, the United States District Court for the Southern District of New York, in any suit, action or proceeding pursuant to this Agreement. Each Party hereby irrevocably consents to the service of any and all process in any such suit, action or proceeding by the delivery of such process in person, by overnight courier or first class mail, with a copy by email, to such Party as set forth in Section 10 hereof.
(d) EACH OF THE PLACEMENT AGENT AND THE COMPANY (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 15. Tail; Right of First Refusal.
(a) Tail. If there is a Closing of the Offering, or if this Agreement expires or terminates (other than a termination for cause in compliance with FINRA Rule 5110(g)(5)(B)(i)), the Placement Agent shall be entitled to compensation under Section 1 hereof, calculated in the manner set forth therein, with respect to any public offering or other equity financing or capital-raising transaction of any kind (the “Tail Financing”) to the extent that such financing or capital is provided to the Company by investors that the Placement Agent had introduced to the Company, whether during the term of the Engagement Letter or during the Term (each, an “Introduced Party”), if such Tail Financing is consummated at any time within the twelve (12) month period following the expiration or termination of the Term (the “Tail Period”). The Parties acknowledge that the Tail Period corresponds to the tail set forth in Section 6 of the Engagement Letter and agree that, as to any Financing, the Tail Period shall be measured from the later of the expiration or termination of the Term hereunder and the expiration or termination of the Engagement Letter, and in no event shall the Tail Period expire earlier than twelve (12) months after the expiration or termination of the Term. The Placement Agent shall deliver to the Company a written list of Introduced Parties on or prior to the expiration or termination of the Term, which list the Placement Agent may supplement to include any Person introduced to the Company prior to such date. For the avoidance of doubt, the Purchasers and the purchasers in the Prior Placement are Introduced Parties.
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(b) Right of First Refusal. If there is a Closing of the Offering, for a period of twelve (12) months from the date of this Agreement (the “ROFR Period”), the Placement Agent shall have an irrevocable right of first refusal to act as lead placement agent, sole book-running manager or sole underwriter, as applicable, on any private placement, registered direct offering or other public offering of equity or equity-linked securities of the Company, and as sole sales agent on any at-the-market offering of the Company, in each case undertaken during the ROFR Period (each, a “ROFR Financing”). The Company shall deliver written notice to the Placement Agent of its intention to pursue any ROFR Financing, setting forth the material terms thereof, and the Placement Agent shall have ten (10) Business Days following receipt of such notice to elect to exercise its right of first refusal. If the Placement Agent elects to exercise such right, the Placement Agent and the Company shall negotiate in good faith the terms of such engagement, which shall be customary for transactions of such type and no less favorable to the Placement Agent than the terms of this Agreement and the Engagement Letter. If the Placement Agent declines to exercise such right, or fails to respond within such ten (10) Business Day period, the Company may proceed with such ROFR Financing with another financial intermediary; provided that if the Company does not consummate such ROFR Financing within ninety (90) days on terms substantially consistent with those set forth in such notice, the Placement Agent’s right of first refusal shall apply anew to such ROFR Financing. The Parties acknowledge that the ROFR Period runs from the date of this Agreement and is in addition to, and not in substitution for, the exclusivity set forth in Section 1(b) and Section 1 of the Engagement Letter. The right of first refusal set forth in this Section 15(b) shall terminate upon a termination of this Agreement by the Company for cause in compliance with FINRA Rule 5110(g)(5)(B)(i), and in no event shall extend beyond three (3) years from the date hereof.
Section 16. Lock-Up. The Company agrees that, during the period beginning on the date hereof and ending ninety (90) days after the Closing Date (the “Lock-Up Period”), the Company’s officers and directors will not, directly or indirectly, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of any shares of the Company’s securities, in each case in accordance with the Lock-Up Agreements. The Placement Agent shall serve as the sole lock-up release agent for any lock-up agreed to in connection with the Offering, and no release of any lock-up obligation shall be effective without the prior written consent of the Placement Agent. The Company shall enforce the Lock-Up Agreements for the benefit of the Placement Agent and the Purchasers and shall impose stop-transfer instructions with its transfer agent to the extent necessary to give effect to the Lock-Up Agreements.
Section 17. General Provisions.
(a) Subject to Section 11, this Agreement constitutes the entire agreement of the Parties to this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement may not be amended or modified unless in writing by all of the Parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each Party whom the condition is meant to benefit. Section headings herein are for the convenience of the Parties only and shall not affect the construction or interpretation of this Agreement.
(b) The Company acknowledges that in connection with the Offering: (i) the Placement Agent has acted at arm’s length, is not an agent of, and owes no fiduciary duties to, the Company or any other person, (ii) the Placement Agent owes the Company only those duties and obligations set forth in this Agreement and the Engagement Letter, and (iii) the Placement Agent may have interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Placement Agent arising from an alleged breach of fiduciary duty in connection with the Offering.
(c) The Company shall be responsible for any and all compliance with the securities laws applicable to it, including, without limitation, Regulation D and the Securities Act, and Rule 506 promulgated thereunder, and all state securities laws.
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(d) Each Party agrees not to mention the name of the other Party or its agents in any press release or news announcement without the express written consent of the other Party, except as required by applicable law or the rules of Nasdaq and except as provided in Sections 5(k) and 18.
(e) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by facsimile, email (including .pdf) or other electronic transmission shall be equally as effective as delivery of a manually executed counterpart.
Section 18. Confidentiality; Announcements. In the event of the consummation or public announcement of the Offering, the Placement Agent shall have the right to disclose its participation in the Offering, including, without limitation, by placing “tombstone” advertisements in financial and other newspapers and journals at its own cost. All advice (written or oral) given by the Placement Agent in connection herewith is intended solely for the benefit and use of the Company, and no such advice shall be used for any other purpose or be reproduced, disseminated, quoted from or referred to at any time, in any manner or for any purpose, nor shall any public references to the Placement Agent be made by the Company without the prior written consent of the Placement Agent.
Section 19. Limitations on Engagement; Limitations of Placement Agent Liability.
(a) The Company acknowledges that the Placement Agent has been retained only by the Company, that the Placement Agent is providing services hereunder as an independent contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement of the Placement Agent is not deemed to be on behalf of, and is not intended to confer rights upon, any stockholder, owner or partner of the Company or any other person not a party hereto as against the Placement Agent or any of its Affiliates, or any of its or their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents. Unless otherwise expressly agreed in writing by the Placement Agent, no one other than the Company is authorized to rely upon this Agreement or any other statements or conduct of the Placement Agent, and no one other than the Company is intended to be a beneficiary of this Agreement. The Company acknowledges that any recommendation or advice, written or oral, given by the Placement Agent to the Company in connection with the Placement Agent’s engagement is intended solely for the benefit and use of the Company’s management and directors in considering a possible Offering and any such recommendation or advice is not on behalf of, and shall not confer any rights or remedies upon, any other persons or be used or relied upon for any other purpose.
(b) The Placement Agent and the Company agree that neither the Placement Agent nor any of its Affiliates or any of its or their respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents shall have any liability to the Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract, tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating to this Agreement or the services rendered hereunder, except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by the Placement Agent and that are finally judicially determined to have resulted solely from the bad faith, gross negligence or willful misconduct of the Placement Agent.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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If the foregoing is in accordance with your understanding of our agreement, please sign below whereupon this instrument, along with all counterparts hereof, shall become a binding agreement in accordance with its terms.
| Very truly yours, | ||
| E.F. HUTTON & CO. | ||
| By: | ||
| Name: | Duncan B. Swanston | |
| Title: | Supervisory Principal | |
The foregoing Placement Agency Agreement is hereby confirmed and accepted as of the date first above written.
| iSPECIMEN INC. | ||
| By: | ||
| Name: | Shahin Behroyan | |
| Title: | Chief Executive Officer | |
[Signature Page to Placement Agency Agreement]
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Exhibit 10.4
LOCK-UP AGREEMENT
November 5, 2026
iSpecimen Inc.
8 Cabot Road, Suite 1800
Woburn, MA 01801
E.F. Hutton & Co.
745 Fifth Avenue, 34th Floor & PH
New York, NY 10151
| Re: | Placement Agency Agreement, dated as of November 5, 2026 (the “Placement Agency Agreement”), between iSpecimen Inc. (the “Company”) and E.F. Hutton & Co. (the “Placement Agent”), and Securities Purchase Agreement, dated as of November 5, 2026 (the “Purchase Agreement”), among the Company and the purchasers party thereto |
Ladies and Gentlemen:
Defined terms not otherwise defined in this letter agreement (the “Letter Agreement”) shall have the meanings set forth in the Placement Agency Agreement. In satisfaction of a condition of the Placement Agent’s obligations under the Placement Agency Agreement and the Purchasers’ obligations under the Purchase Agreement, the undersigned irrevocably agrees with the Company and the Placement Agent that, from the date hereof until ninety (90) days after the Closing Date (such period, the “Restriction Period”), the undersigned will not offer, sell, contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any Affiliate of the undersigned or any person in privity with the undersigned or any Affiliate of the undersigned), directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to, any shares of Common Stock of the Company or securities convertible into, exchangeable or exercisable for shares of Common Stock of the Company beneficially owned, held or hereafter acquired by the undersigned (the “Lock-Up Securities”), excluding any securities issued or issuable as consideration in connection with the Company’s asset purchase transaction with Foldlab AI that are held in escrow and subject to a separate lock-up agreement (the “Foldlab Securities”), which shall not constitute Lock-Up Securities or otherwise be subject to this Letter Agreement and shall instead be governed solely by such separate lock-up agreement, or make any demand for or exercise any right or cause to be filed a registration statement, including any amendments thereto, with respect to the registration of any shares of Common Stock or Common Stock Equivalents, or publicly disclose the intention to do any of the foregoing. Beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act. All references to the number or amount of shares of Common Stock or other securities hereunder shall be appropriately adjusted to give effect to any reverse or forward stock split, stock dividend, stock combination, recapitalization or similar transaction occurring after the date hereof. The undersigned acknowledges that the Company shall provide written notice to the transfer agent of the Company to inform it of the Restriction Period, which written notice shall include notification by email. In order to enforce this covenant, the Company shall impose irrevocable stop-transfer instructions preventing the transfer agent of the Company from effecting any actions in violation of this Letter Agreement.
The Placement Agent shall serve as the sole lock-up release agent for the Restriction Period. The Placement Agent may, in its sole discretion, consent to or waive any restriction or condition hereunder, or release any Lock-Up Securities from the restrictions hereunder, by written notice to the Company and the undersigned; provided that any such consent, waiver or release shall be effective only upon delivery of such written notice to the Company and the undersigned, and the Company shall promptly notify the transfer agent thereof. For the avoidance of doubt, no stockholder of the Company that is not a director or executive officer of the Company shall be required by the Company or the Placement Agent to execute this Letter Agreement, and neither the Company nor the Placement Agent shall be obligated to compel any such stockholder to do so.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Lock-Up Securities in the circumstances described in clauses (i) through (viii) below, provided that (1) the Company and the Placement Agent receive a signed lock-up letter agreement (in the form of this Letter Agreement) for the balance of the Restriction Period from each donee, trustee, distributee or transferee, as the case may be, prior to such transfer, (2) any such transfer shall not involve a disposition for value, (3) any filing required under Section 16 of the Exchange Act in connection with any such transfer may be made, provided that such filing identifies the applicable permitted transfer and states that it was made pursuant to a permitted exception under this Letter Agreement, and (4) neither the undersigned nor any donee, trustee, distributee or transferee, as the case may be, otherwise voluntarily effects any public filing or report regarding such transfers during the Restriction Period. The transfer described in clause (ix) below shall be permitted notwithstanding conditions (1) and (2), subject to the conditions expressly set forth in clause (ix):
(i) as a bona fide gift or gifts, including gifts made for estate-planning purposes;
(ii) to any immediate family member or to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this Letter Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin);
(iii) to any corporation, partnership, limited liability company or other business entity all of the equity holders of which consist of the undersigned and/or the immediate family of the undersigned;
(iv) if the undersigned is a corporation, partnership, limited liability company, trust or other business entity, (a) to another corporation, partnership, limited liability company, trust or other business entity that is an Affiliate of the undersigned or (b) in the form of a distribution to limited partners, limited liability company members or stockholders of the undersigned;
(v) if the undersigned is a trust, to the beneficiary of such trust;
(vi) by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree, separation agreement or other court order;
(vii) to a charity or educational institution;
(viii) by will, other testamentary document or intestate succession to the legal representative, heir, beneficiary or a member of the immediate family of the undersigned; or
(ix) sales of Common Stock made pursuant to and in accordance with a trading plan pursuant to Rule 10b5-1 under the Exchange Act established and in effect prior to the date hereof, provided that any filing under Section 16 of the Exchange Act made in connection with such sales shall state that such sales were made pursuant to such trading plan;
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In addition, notwithstanding the foregoing, this Letter Agreement shall not restrict (i) the delivery of shares of Common Stock to the undersigned upon exercise of any options or settlement of restricted stock units or other equity awards granted under any employee benefit plan of the Company, or the exercise of warrants, including any cashless or net exercise, provided in each case that any shares of Common Stock or other securities acquired in connection with any such exercise or settlement will remain subject to the restrictions set forth in this Letter Agreement, (ii) the withholding, surrender or sale of shares of Common Stock to cover the payment of exercise prices, tax withholding obligations or other taxes associated with the exercise or settlement of equity awards described in clause (i) above, including any net exercise or net settlement, (iii) the grant, issuance, vesting, settlement, exercise, cancellation or administration of awards by the Company pursuant to any equity incentive plan, employee benefit plan, agreement or arrangement, (iv) any sale or other transfer of shares of Common Stock acquired by the undersigned in open-market transactions after the Closing Date, so long as such shares were not acquired from the Company or any of its Affiliates, or (v) any transfer of Lock-Up Securities pursuant to a tender offer, merger, consolidation, business combination, change of control transaction or sale of all or substantially all of the assets of the Company, in each case approved by the Company’s board of directors.
The undersigned acknowledges that the execution, delivery and performance of this Letter Agreement is a material inducement to the Placement Agent and the Purchasers to complete the transactions contemplated by the Placement Agency Agreement and the Purchase Agreement, and the Company and the Placement Agent shall each be entitled to specific performance of the undersigned’s obligations hereunder. The undersigned hereby represents that the undersigned has the power and authority to execute, deliver and perform this Letter Agreement, that the undersigned has received adequate consideration therefor and that the undersigned will indirectly benefit from the closing of the transactions contemplated by the Placement Agency Agreement and the Purchase Agreement.
For purposes of this Letter Agreement and the lock-up requirements applicable to executive officers of the Company, any person serving as an executive officer through a contractor, consulting or other service entity shall be treated as an executive officer notwithstanding the form of engagement, including Shahin Behroyan, who serves as Chief Executive Officer through 1605811 BC Ltd. If an executive officer serves through such an entity, the individual and the entity shall be subject to the restrictions in this Letter Agreement with respect to any Lock-Up Securities beneficially owned, held or hereafter acquired by either, and the entity shall execute this Letter Agreement or a written joinder thereto, or otherwise agree in writing to be bound by this Letter Agreement.
This Letter Agreement shall automatically terminate and be of no further force or effect upon the earliest to occur of (i) the termination of the Purchase Agreement in accordance with its terms or the Purchase Agreement otherwise ceasing to be effective, (ii) the failure of the Closing to occur on or before the Outside Date (as defined in the Purchase Agreement), and (iii) the expiration of the Restriction Period. Upon any such termination, the undersigned shall be released from all obligations under this Letter Agreement, except for any obligations that expressly survive termination.
This Letter Agreement may not be amended or otherwise modified in any respect without the written consent of each of the Company, the Placement Agent and the undersigned. This Letter Agreement shall be construed and enforced in accordance with the laws of the State of New York without regard to the principles of conflicts of law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The undersigned agrees and understands that this Letter Agreement does not intend to create any relationship between the undersigned and the Placement Agent other than as expressly set forth herein, that the Placement Agent is not entitled to cast any votes on the matters herein contemplated and that no issuance or sale of the Lock-Up Securities is created or intended by virtue of this Letter Agreement.
This Letter Agreement shall be binding on successors and assigns of the undersigned with respect to the Lock-Up Securities and any such successor or assign shall enter into a similar agreement for the benefit of the Company and the Placement Agent. This Letter Agreement may be executed in two or more counterparts, all of which when taken together may be considered one and the same agreement, and delivery of an executed counterpart by email (including .pdf) or other electronic transmission shall be as effective as delivery of a manually executed counterpart.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned has executed this Letter Agreement as of the date first written above.
Signature:______________________________
Print Name:_____________________________
Position in Company:_____________________
Address for Notice:
_____________________________________
_____________________________________
Email:_________________________________
By signing below, the Company agrees to enforce the restrictions on transfer set forth in this Letter Agreement.
| iSPECIMEN INC. | ||
| By: | ||
| Name: | Shahin Behroyan | |
| Title: | Chief Executive Officer | |
[Signature Page to Lock-Up Agreement]
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