Form 8-K
8-K — BIOMERICA INC
Accession: 0001493152-26-040251
Filed: 2026-08-26
Period: 2026-08-20
CIK: 0000073290
SIC: 2835 (IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES)
Item: Entry into a Material Definitive Agreement
Item: Unregistered Sales of Equity Securities
Item: Financial Statements and Exhibits
Documents
8-K — form8-k.htm (Primary)
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EX-10.2 (ex10-2.htm)
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): August 20, 2026
BIOMERICA,
INC.
(Exact
name of registrant as specified in its charter)
Delaware
001-37863
95-2645573
(State
or Other Jurisdiction
of
Incorporation)
(Commission
File
Number)
(IRS
Employer
Identification
No.)
17571
Von Karman Avenue, Irvine, California
92614
(Address
of Principal Executive Offices)
(Zip
Code)
(949)
645-2111
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
symbol(s)
Name
of each exchange on which registered
Common
Stock, par value $0.08 per share
BMRA
Nasdaq
Stock Market, LLC
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement.
Private
Placement
On
August 20, 2026, Biomerica, Inc., a Delaware corporation (the “Company”), entered into a Securities
Purchase Agreement (the “Purchase Agreement”) with certain institutional and individual investors identified on the signature
pages thereto, which included among others B. Riley Principal Capital, LLC and certain members of the Company’s Board of Directors
and executive officers (collectively, the “Purchasers”), pursuant to which the Company agreed to issue and sell an aggregate
of 1,393,705 shares of the Company’s common stock, par value $0.08 per share (the “Shares”), at a purchase price of
$1.60 per Share, for aggregate gross proceeds of approximately $2.23 million (the “Private Placement”).
The closing
of the Private Placement occurred on August 26,
2026 (the “Closing Date”).
The
Purchase Agreement also provides that, for so long as the “B. Riley Purchasers,” as defined therein, beneficially owns, in
the aggregate, securities representing at least 10% of the voting power of the Company’s outstanding common stock, B. Riley Principal
Capital, LLC, one of the B. Riley Purchasers, will have the right, subject to the applicable rules of the Nasdaq Stock
Market LLC, to designate one representative for election or appointment to the Company’s Board of Directors. The Purchase Agreement
also provides for certain related governance rights.
In
connection with the Private Placement, the Company’s directors and certain executive officers are required to enter into lock-up
agreements restricting, subject to the terms and exceptions set forth therein, certain transfers of Company securities for a period of
180 days following the Closing.
The
Purchase Agreement contains customary representations, warranties, covenants and closing conditions.
Registration
Rights Agreement
In
connection with the Private Placement, on August 20, 2026, the Company entered into a Registration Rights Agreement with the Purchasers
(the “Registration Rights Agreement”), pursuant to which the Company agreed to file with the Securities and Exchange Commission
(the “SEC”) a registration statement to register and provide for the resale of the Shares and to use commercially reasonable
efforts to cause such registration statement to become effective and remain effective for the periods specified therein. The
Company is required to file such registration statement within 30 calendar days of the Closing Date and to use its commercially reasonable
efforts to have such registration statement declared effective within 30 calendar days of the closing date (or 60 calendar days in the
event of a “full review” by the SEC). If the Company fails to satisfy certain filing or effectiveness obligations under the
Registration Rights Agreement, the Company is obligated to pay the Purchasers liquidated damages equal to 1.0% of the aggregate purchase
price paid by such Purchaser, subject to a maximum aggregate cap of 5.0% of such Purchaser’s subscription amount.
The
Registration Rights Agreement also contains customary registration procedures, indemnification provisions and provisions for partial
liquidated damages upon the occurrence of certain specified registration failures.
The
foregoing descriptions of the Purchase Agreement and the Registration Rights Agreement do not purport to be complete and are qualified
in their entirety by reference to the full text of the Purchase Agreement and the Registration Rights Agreement, which are filed as Exhibits
10.1 and 10.2, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item
3.02 Unregistered Sales of Equity Securities.
The
information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated
herein by reference.
The
Shares have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being offered
and sold in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation
D promulgated thereunder.
This
Current Report on Form 8-K does not constitute an offer to sell or a solicitation of an offer to buy the Shares, nor shall there be any
sale of the Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
Exhibit
Description
10.1
Securities Purchase Agreement, dated August 20, 2026, by and among Biomerica, Inc. and certain purchasers
10.2
Registration Rights Agreement, dated August 20, 2026, by and among Biomerica, Inc. and certain purchasers
104
Cover
Page Interactive Data File (embedded within the XBRL document)
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.
BIOMERICA,
INC.
Date:
August 26, 2026
By:
/s/
Zackary S. Irani
Zackary
S. Irani
Chief
Executive Officer
EX-10.1
EX-10.1
Filename: ex10-1.htm · Sequence: 2
EXHIBIT 10.1
BIOMERICA,
INC.
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES Purchase Agreement (this “Agreement”)
is dated as of August 20, 2026, by and between Biomerica, Inc., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, “Purchaser” and collectively the “Purchasers”).
Whereas,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below),
and/or Rule 506 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.
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
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms
have the meanings set forth in this Section 1.1:
“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.
“BSA/PATRIOT
Act” shall have the meaning ascribed to such term in Section 3.2(f).
“Board
of Directors” means the board of directors of the Company.
“B.Riley
Board Representative” shall have the meaning ascribed to such term in Section 5.1(a).
“B.
Riley Purchasers” means the parties set forth on Schedule I hereto.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Closing”
means the closing of the purchase and sale of the Shares pursuant to Section 2.2.
“Closing
Date” shall have the meaning ascribed to such term in Section 2.2.
“Code”
shall have the meaning ascribed to such term in Section 3.2(h).
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.08 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 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.
“Company
Counsel” means KL Gates LLP.
“Company
Lock-Up Period” means the period commencing on the Closing Date and ending on the date that is one hundred eighty (180)
days following the Closing Date.
“DGCL”
means the Delaware General Corporation Law, as amended.
“Diagnostic
Product” shall have the meaning ascribed to such term in Section 3.1(hh).
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time)
and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following
the date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any
Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof.
“Disqualification
Event” shall have the meaning ascribed to such term in Section 3.1(mm).
“Effective
Date” means the earliest of the date that (a) the initial Registration Statement registering for resale all Shares has
been declared effective by the Commission, (b) all of the Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule
144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without
volume or manner-of-sale restrictions, (c) following the one year anniversary of the Closing Date provided that a holder of Shares
is not an Affiliate of the Company, or (d) all of the Shares may be sold pursuant to an exemption from registration under Section 4(a)(1)
of the Securities Act without volume or manner-of-sale restrictions.
2
“ERISA”
shall have the meaning ascribed to such term in Section 3.2(h).
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) the Shares pursuant to this Agreement, (b) shares of Common Stock upon the exercise
of options or warrants that were issued pursuant to an equity incentive plan and are outstanding as of the date of this Agreement, (c)
shares of Common Stock or options or restricted stock units to employees, officers or directors of the Company pursuant to any equity
incentive plan in existence as of the date hereof or any equity incentive 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 Company, (d) securities issued pursuant to the At Market Issuance Sales Agreement, dated May 10, 2024, by
and between the Company, EF Hutton LLC and R.F. Lafferty & Co., Inc., (e) up to one million dollars ($1,000,000) of Common Stock
and (f) shares of Common Stock upon the exercise, exchange or conversion of any securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been
amended since the date of this 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.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“FDA”
shall have the meaning ascribed to such term in Section 3.1(hh).
“FDCA”
shall have the meaning ascribed to such term in Section 3.1(hh).
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(z).
“Intellectual
Property” means all patents, patent applications, trademarks, trademark registrations, service marks, service mark registrations,
trade names, copyrights, copyright registrations, licenses, inventions, trade secrets, Internet domain names, Internet domain name registrations,
technology, registrations, trade secret rights, know-how and other intellectual property.
“Issuer
Covered Person” shall have the meaning ascribed to such term in Section 3.1(mm).
“IT
Systems and Data” shall have the meaning ascribed to such term in Section 3.1(ii).
“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.
3
“Lock-Up
Agreements” means those certain lock-up agreements, dated as of the date hereof, by and between the Company and each of
the directors and certain executive officers of the Company, pursuant to which each such person agrees not to sell, transfer or otherwise
dispose of any shares of Common Stock or Common Stock Equivalents beneficially owned by such person during the period commencing on the
Closing Date and ending on the date that is one hundred eighty (180) days following the Closing Date, in the form of Exhibit B
attached hereto.
“Material
Adverse Effect” shall have the meaning assigned 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(ll).
“Non-cooperative
Jurisdiction” shall have the meaning ascribed to such term in Section 3.2(g).
“OFAC”
shall have the meaning ascribed to such term in Section 3.1(jj).
“Per
Share Purchase Price” equals $1.60, 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 and prior to the Closing
Date.
“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.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).
“Purchaser
Indemnitors” shall have the meaning ascribed to such term in Section 5.1(d)(ii).
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated on or about the date hereof, among the Company and the
Purchasers, in the form of Exhibit A attached hereto.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale by the Purchasers of the Shares.
4
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 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.
“Sanctioned
Person” shall have the meaning ascribed to such term in Section 3.2(f).
“Sanctions”
shall have the meaning ascribed to such term in Section 3.2(f).
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shell
Bank” shall have the meaning ascribed to such term in Section 3.2(f).
“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“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 locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares 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.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“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” means this Agreement, the Registration Rights Agreement, the Lock-Up Agreements, all exhibits and schedules
thereto and hereto, and any other documents or agreements executed in connection with the transactions contemplated hereunder.
5
“Transfer
Agent” means the current transfer agent of the Company, and any successor transfer agent of the Company.
“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 the OTCQB Venture Market (“OTCQB”) or
the OTCQX Best Market (“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 (“Pink Market”)
operated by OTC Markets, Inc. (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 Purchasers of a majority in interest of the Securities then outstanding and
reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Article
II
PURCHASE
AND SALE
2.1
Purchase and Sale of Securities. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company
agrees to sell, and each Purchaser, severally and not jointly, agrees to purchase up to an aggregate of approximately $1,500,0000 of
Shares. Each Purchaser shall deliver to the Company, via wire transfer, immediately available funds equal to such Purchaser’s Subscription
Amount as set forth on the signature page hereto executed by such Purchaser. The Company shall deliver to each Purchaser its respective
Shares, as determined pursuant to Section 2.2, and the Company and each Purchaser shall deliver the other items set forth in Section
2.2 deliverable at the Closing.
2.2
Closing.
(a)
Subject to the terms and conditions set forth herein, including, without limitation upon satisfaction of the covenants and conditions
set forth in 2.2 and 2.3, the closing of the purchase and sale of the Shares pursuant to this Agreement (the “Closing”)
shall be held remotely via the exchange of documents and signatures (or their electronic counterparts) no later than August 26, 2026,
or such other date as the Company and the Purchasers may mutually agree upon in writing (the “Closing Date”).
(b)
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)
a legal opinion of Company Counsel, directed to the Purchasers, in form and substance reasonably acceptable to the Purchasers;
6
(iii)
the Company’s wire instructions;
(iv)
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to establish via the direct registration
system a book-entry notation for that number of Shares to be issued to such Purchaser under this Agreement;
(v)
the Registration Rights Agreement duly executed by the Company;
(vi)
the Lock-Up Agreements duly executed by each of the directors and certain executive officers of the Company; and
(vii)
evidence that the Board of Directors has adopted resolutions approving, for purposes of Section 203 of the DGCL, the transactions contemplated
by this Agreement and the other Transaction Documents, including the acquisition by the Purchasers of the Securities, such that Section
203 of the DGCL shall not apply to any of the transactions contemplated hereby or thereby.
(c)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i)
this Agreement duly executed by such Purchaser;
(ii)
such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company; and
(iii)
the Registration Rights Agreement duly executed by such Purchaser.
2.3
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) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein (unless
such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to
the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) 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;
(iii)
the Board of Directors shall have adopted resolutions approving, for purposes of Section 203 of the DGCL, the transactions contemplated
by this Agreement and the other Transaction Documents, including the acquisition by the Purchasers of the Securities, such that Section
203 of the DGCL shall not apply to any of the transactions contemplated hereby or thereby;
7
(iv)
the Company shall have delivered to the Purchasers the Lock-Up Agreements, duly executed by each of the directors and certain executive
officers of the Company; and
(v)
the delivery by each Purchaser of the items set forth in Section 2.2(c) 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
such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to
the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) 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;
(iii)
the delivery by the Company of the items set forth in Section 2.2(b) of this Agreement;
(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, 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 Trading 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.
Article
III
REPRESENTATIONS
AND WARRANTIES
3.1
Representations and Warranties of the Company. Except as set forth in the SEC Reports, the Company hereby makes the following representations
and warranties to each Purchaser as of the date hereof and the Closing Date (unless as of a specific date therein, in which case they
shall be accurate as of such date):
(a)
Subsidiaries. The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, limited liability company, association, or other business entity.
8
(b)
Organization and Qualification. The Company is an entity duly incorporated, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, with the requisite power and authority to own and use its properties and assets and to carry
on its business as currently conducted. The Company is not in violation nor default of any of the provisions of its amended and restated
certificate of incorporation or amended and restated bylaws. The Company 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, would 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, 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, to the knowledge of the Company, 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.
(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 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 it 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. 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 amended and restated certificate of incorporation
or amended and restated bylaws, or (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 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 debt or otherwise) or other understanding
to which the Company is a party or by which any property or asset of the Company is bound or affected, 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 is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as
would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.
9
(e)
Filings, Consents and Approvals. 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 filings with the Commission pursuant to the Registration Rights Agreement,
(iii) the notice and/or application(s) to each applicable Trading Market for the listing of the Shares for trading thereon in the time
and manner required thereby, (iv) the filing of Form D, if applicable, with the Commission, and (v) such filings as are required to be
made under applicable state securities laws (collectively, the “Required Approvals”).
(f)
Issuance of the Securities. The Shares are duly authorized and, when issued and paid for in accordance with this Agreement, will
be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to this Agreement.
(g)
Capitalization. As of the date hereof, the Company has 300,000,000 shares of Common Stock authorized, par value $0.08 per share,
and 5,000,000 shares of preferred stock authorized, of which 571,429 shares have been designated as Series A 5% Convertible Preferred
Stock, par value $0.08 per share (none of which are issued and outstanding), and 4,428,571 shares of which are undesignated preferred
stock, no par value (none of which are issued and outstanding). The Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options or vesting and settlement
of restricted stock units 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 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. 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. As
of the date hereof, 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 contracts, commitments, understandings or arrangements by which the Company
is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are
no outstanding securities or instruments of the Company with any provision that adjusts the exercise, conversion, exchange or reset price
of such security or instrument upon an issuance of securities by the Company. There are no outstanding securities or instruments of the
Company that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by
which the Company is or may become bound to redeem a security of the Company. 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 applicable 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. No further approval or authorization of any stockholder, the Board of Directors or others is required
for the issuance and sale of the Shares. 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, to the knowledge of the Company, between or among any of the
Company’s stockholders.
10
(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”) on a timely basis or has received a valid extension of such time of filing
and has filed any such SEC Reports prior to the expiration of any such extension. 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 Company has
never been an issuer subject to Rule 144(i) under the Securities Act. 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 Commission 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 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,
immaterial, year-end audit adjustments.
(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, (i) there has been no event, occurrence or development that has had or that would 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 Commission, (iii) the Company
has not materially 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 or director, except pursuant to existing Company equity compensation
plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the
transactions contemplated by the Transaction Documents, 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 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.
11
(j)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of
the Company, threatened against or affecting the Company or any of its properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which, if there were an unfavorable decision, would individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. None of the Actions adversely affects or challenges the legality, validity or enforceability of any of the Transaction
Documents or the Securities.
(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 would reasonably be expected to result in a Material Adverse Effect. None of the Company’s employees is a
member of a union that relates to such employee’s relationship with the Company, and the Company is not a party to a collective
bargaining agreement, and the Company believes that its relationships with their employees are good. The Company is in compliance with
all 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 would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(l)
Compliance. The Company: (i) is not 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), nor has the Company 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 not in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is not or has
not been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety
and employment and labor matters, except in each case of (i), (ii) and (iii) as would not have or reasonably be expected to result in
a Material Adverse Effect.
12
(m)
Environmental Laws. The Company (i) is 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) has received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) is in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n)
Regulatory Permits. The Company possesses 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 would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.
(o)
Title to Assets. The Company does not own any real estate. The Company has good and marketable title in all personal property
owned by them that is material to the business of the Company, 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 (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 are held under valid, subsisting and enforceable leases with which the Company is in compliance, with
such exceptions as are not material and do not materially interfere with the use made or proposed to be made of such real property, improvements,
equipment or personal property of the Company.
(p)
Intellectual Property. The Company owns, possesses, or can acquire on reasonable terms, all Intellectual Property (as defined
below) necessary for the conduct of the Company’s business as now conducted or as described in the SEC Reports to be conducted,
except as such failure to own, possess, or acquire such rights would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Furthermore, (A) to the Company’s knowledge, there is no infringement, misappropriation or violation
by third parties of any such Intellectual Property, except as such infringement, misappropriation or violation would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect; (B) there is no pending or, to the Company’s knowledge,
threatened, action, suit, proceeding or claim by others challenging the Company’s rights in or to any such Intellectual Property,
and the Company is unaware of any objective facts which would form a reasonable basis for any such claim; (C) the Intellectual Property
owned by the Company, and to the Company’s knowledge, the Intellectual Property licensed to the Company, has not been adjudged
invalid or unenforceable, in whole or in part, and there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any such Intellectual Property; (D) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes, misappropriates or otherwise
violates any Intellectual Property or other proprietary rights of others, and the Company has not received any written notice of such
claim; and (E) to the Company’s knowledge, no employee of the Company is in or has ever been in violation of any term of any employment
contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement or any restrictive covenant to or with a former employer where the basis of such violation relates to such employee’s
employment with the Company or actions undertaken by the employee while employed with the Company, except as such violation would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
13
(q)
Insurance. The Company is 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 is engaged, including, but not limited to, directors and
officers insurance coverage at least equal to the aggregate Subscription Amount. The Company has no reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in cost.
(r)
Sarbanes-Oxley; Internal Accounting Controls. The Company is in compliance, in all material respect, with any and all applicable
requirements of the Sarbanes-Oxley Act of 2002, as amended, that are effective as of the date hereof and any and all applicable rules
and regulations promulgated by the Commission thereunder that are effective as of the date hereof. The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s
general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general
or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have
evaluated the effectiveness of the disclosure controls and procedures of the Company 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 that have
materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company.
(s)
Certain Fees. Except for compensation payable by the Company to certain financial advisors, no brokerage or finder’s fees
or commissions are or will be payable by the Company 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(s) that may be due in connection with the transactions contemplated by the Transaction Documents.
14
(t)
Private Placement. Assuming the accuracy of the Purchasers’ 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. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(u)
Investment Company. The Company is not, and immediately after receipt of payment for the Securities, will not be an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.
(v)
Registration Rights. Other than to each of the Purchasers pursuant to the Registration Rights Agreement, no Person has any right
to cause the Company to effect the registration under the Securities Act of any securities of the Company.
(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 Commission is contemplating terminating such registration.
The Company has not, in the 12 months preceding the date hereof, received notice from any Trading 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
Trading Market. 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 or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.
(x)
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 it believes constitutes or might constitute material, non-public information. 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, its respective businesses and the
transactions contemplated hereby, 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 the light of the circumstances under
which they were 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.
15
(y)
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 this offering of the Securities
to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any
such Securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of
the securities of the Company are listed or designated.
(z)
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 year from the Closing Date. The Company is not in default with respect to any Indebtedness. For the
purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in
excess of $50,000 (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 $50,000 due
under leases required to be capitalized in accordance with GAAP.
(aa)
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 (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.
(bb)
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.
16
(cc)
Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf
of the Company, 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 made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated
in any material respect any provision of FCPA.
(dd)
Accountants. The Company’s independent registered public accounting firm is Haskell & White LLP. To the knowledge and
belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall
express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year
ending May 31, 2025.
(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.
(ff)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(i) and 4.11 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers 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.
17
(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 any security of the Company to facilitate
the sale or resale of any 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.
(hh)
FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”)
under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is
manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company (each such product, a “Diagnostic
Product”), such Diagnostic Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure
to be in compliance would not reasonably be expected to have a Material Adverse Effect. There is no pending, completed or, to the Company’s
knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company, and the Company has not received any notice, warning letter or other communication from the FDA
or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the
distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Diagnostic Product,
(ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising
or sales promotional materials relating to, any Diagnostic Product, (iii) imposes a clinical hold on any clinical investigation by the
Company, (iv) enjoins production at any facility of the Company, (v) enters or proposes to enter into a consent decree of permanent injunction
with the Company, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company, and which, either individually
or in the aggregate, would reasonably be expected to have a Material Adverse Effect. The properties, business and operations of the Company
have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA,
except where the failure to so conduct, individually or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States
of any product proposed to be developed, produced or marketed by the Company.
(ii)
Cybersecurity. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect
(i) there has been no security breach or other compromise of or relating to any of the Company’s 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 has not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result
in, any security breach or other compromise to its IT Systems and Data; (iii) the Company is 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 has implemented and maintained
commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation,
redundancy and security of all IT Systems and Data; and (v) the Company and have implemented backup and disaster recovery technology
consistent with industry standards and practices.
18
(jj)
Office of Foreign Assets Control. Neither the Company, nor to the Company’s knowledge, any director, officer, agent, employee
or Affiliate of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”).
(kk)
Bank Holding Company Act. The Company is not 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”). The Company
does not own or control, 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. The Company does not exercise 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.
(ll)
Money Laundering. The operations of the Company are and have been conducted at all times in compliance in all material respects
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 or Proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
(mm)
No Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 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 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 (each, an “Issuer Covered Person”) 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) under
the Securities Act. 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) under the Securities Act,
and has furnished to the Purchasers a copy of any disclosures provided thereunder.
19
(nn)
Other Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(oo)
Notice of Disqualification Events. The Company will notify the Purchasers 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.
3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants
as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they
shall be accurate as of such 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 the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by such Purchaser of the transactions contemplated by the Transaction Documents 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 pursuant to the Registration Statement or
otherwise in compliance with applicable federal and state securities laws). 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 his, her or 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
pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its business.
20
(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof and the Closing Date
it is, either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8), (a)(9), (a)(12),
or (a)(13) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act.
(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, (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.
(f)
Sanctioned Persons; BSA/PATRIOT Act. Such Purchaser is not owned or controlled by or acting on behalf of (in connection with this
Agreement), a Sanctioned Person. Such Purchaser is not an institution that accepts currency for deposit and that (a) has no physical
presence in the jurisdiction in which it is incorporated or in which it is operating and (b) is unaffiliated with a regulated financial
group that is subject to consolidated supervision (a “Shell Bank”) or providing banking services to a Shell
Bank. Such Purchaser represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.),
as amended by the USA PATRIOT Act of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”),
that Purchaser maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act.
Such Purchaser also represents that, to the extent required by applicable law, it maintains, either directly or through the use of a
third-party administrator, policies and procedures reasonably designed for the screening of any investors in the Purchaser against Sanctions-related
lists of blocked or restricted persons. Such Purchaser further represents and warrants that (a) the funds held by Purchaser and used
to purchase the Securities were not directly or indirectly derived from or related to any activities that may contravene U.S. federal,
state or non-U.S. anti-money laundering, anti-corruption or Sanctions laws and regulations or activities that may otherwise be deemed
criminal and (b) any returns from the Purchaser’s investment will not be used to finance any illegal activities. For purposes of
this Agreement, “Sanctioned Person” means at any time any person or entity with whom dealings are restricted,
prohibited, or sanctionable under any Sanctions (as defined below), including as a result of being: (a) listed on any Sanctions-related
list of designated or blocked or restricted persons; (b) that is a national of, the government of, or any agency or instrumentality of
the government of, or resident in, or organized under the laws of, a country or territory that is the target of comprehensive Sanctions
from time to time (as of the date of this Agreement, Cuba, Iran, North Korea, Syria, and the Crimea region); or (c) a relationship of
ownership, control, or agency with any of the foregoing. “Sanctions” means those trade, economic and financial
sanctions laws, regulations, embargoes, and restrictive measures (in each case having the force of law) administered, enacted or enforced
from time to time by (a) the United States (including without limitation the U.S. Department of the Treasury, Office of Foreign Assets
Control, the U.S. Department of State, and the U.S. Department of Commerce), (b) the European Union and enforced by its member states,
(c) the United Nations and (d) the United Kingdom.
21
(g)
Non-cooperative Jurisdiction. Such Purchaser is not owned or controlled by or acting on behalf of (in connection with this Agreement),
a person or entity resident in, or whose funds used to purchase the Securities are transferred from or through, a country, territory
or entity that (i) has been designated as non-cooperative with international anti-money laundering or counter terrorist financing principles
or procedures by the United States or by an intergovernmental group or organization, such as the Financial Action Task Force, of which
the United States is a member; (ii) is the subject of an advisory issued by the Financial Crimes Enforcement Network of the U.S. Department
of the Treasury; or (iii) has been designated by the Secretary of the Treasury under Section 311 of the USA PATRIOT Act as warranting
special measures due to money laundering concerns (any such country or territory, a “Non-cooperative Jurisdiction”),
or an entity or individual that resides or has a place of business in, or is organized under the laws of, a Non-cooperative Jurisdiction.
(h)
ERISA. If Purchaser is an employee benefit plan that is subject to Title I of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), a plan, an individual retirement account or other arrangement that is subject to section
4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or an employee benefit plan that is a governmental
plan (as defined in section 3(32) of ERISA), a church plan (as defined in section 3(33) of ERISA), a non-U.S. plan (as described in section
4(b)(4) of ERISA) or other plan that is not subject to the foregoing but may be subject to provisions under any other federal, state,
local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code, or an entity whose underlying
assets are considered to include “plan assets” of any such plan, account or arrangement subject to the fiduciary or prohibited
transaction provisions of ERISA or section 4975 of the Code, the Purchaser represents and warrants that the acquisition and holding of
the Securities will not result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code.
(i)
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 locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
22
(j)
General Solicitation. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
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. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
Article
IV
OTHER
AGREEMENTS OF THE PARTIES
4.1
Transfer Restrictions.
(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 thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to 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.
(b)
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:
THESE
SECURITIES HAVE NOT 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. THESE SECURITIES 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.
23
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, 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 Securities may reasonably request in connection with a pledge or transfer of the Securities.
(c)
Certificates or book-entry statements evidencing the Securities shall not be required to contain any legend (including the legend set
forth in Section 4.1(b) hereof), (i) while a registration statement (including the Registration Statement) covering the resale of such
security is effective under the Securities Act, (ii) following any sale of such Securities pursuant to Rule 144, (iii) if such Securities
are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information
required 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 judicial interpretations and pronouncements issued by the staff of the
Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent as promptly as practicable after the
effectiveness of the Registration Statement if required by the Transfer Agent to effect the removal of the legend hereunder. Subject
to the receipt of the below noted representation certificate, 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 the
Purchaser to the Company of a request therefor (such date, the “Legend Removal Date”), cause the Transfer Agent
to effect removal of the legend hereunder. In making such request, the Purchaser shall deliver a representation certificate, in form
and substance reasonably acceptable to Company Counsel and the Transfer Agent that such parties shall be entitled to rely upon in connection
with the removal of any legend. 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, unless required by law. 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 the Depository
Trust Company System as directed by such Purchaser.
24
(d)
In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Shares (based on the VWAP of the Common Stock on the date such Shares are submitted
to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $5 per Trading Day for each Trading
Day commencing on the tenth (10th) Trading Day after the Legend Removal Date until such certificate or book-entry statement
is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the
Legend Removal Date a certificate representing the Shares so delivered to the Company by such Purchaser that is free from all restrictive
and other legends and (b) 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 shares of Common Stock,
or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, that such Purchaser
anticipated receiving from the Company without any restrictive legend, then 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
(including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In Price”) over the product
of (A) such number of Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B)
net proceeds actually received by such Purchaser in the sale giving rise to such Buy-In. Notwithstanding the foregoing, no liquidated
damages shall accrue under this Section 4.1(d): (i) until five (5) Trading Days after the Company’s receipt of written notice from
such Purchaser of the applicable failure; (ii) for any period during which the removal of a legend is delayed by such Purchaser’s
failure to deliver the representation certificate or other documentation required under Section 4.1(c); (iii) during the pendency of
a good-faith dispute as to whether the conditions to legend removal have been satisfied; or (iv) for any delay caused by the Transfer
Agent, the Depository Trust Company, or any other event outside the Company’s reasonable control.
(e)
Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or
an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2
Furnishing of Information; Public Information.
(a)
Until the time that no Purchaser owns Securities, the Company shall use reasonable best efforts to maintain the registration of the Common
Stock under Section 12(b) or 12(g) of the Exchange Act and 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.
25
(b)
At any time during the period commencing from the six (6) month anniversary of the date hereof 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 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 a 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 Securities, an amount in cash equal to two percent
(2.0%) of the Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth
(30th) day (prorated for periods totaling less than thirty 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 Purchasers to transfer the
Securities pursuant to Rule 144, provided that a Purchaser shall not be entitled to a payment pursuant to the foregoing if such Purchaser
is able to sell its Securities pursuant to Rule 144 without restrictions or pursuant to an applicable registration statement. The payments
to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein as “Public Information Failure
Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during
which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure
giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments
in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial
months) until paid in full. Notwithstanding the foregoing, no Public Information Failure Payments shall accrue with respect to any Public
Information Failure arising from events outside the Company’s reasonable control, including any delay attributable to the Company’s
independent auditors or to review or comment by the Commission.
4.3
Integration. 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 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 or that would be integrated with the offer or sale of
the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior
to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
26
4.4
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, 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 Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company
represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers
by the Company or any of its 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 or any of its 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 and be of no further
force or effect. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company. 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 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 Commission or any regulatory agency or Trading Market,
without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with (i) any registration
statement contemplated by the Registration Rights Agreement and (ii) the filing of final Transaction Documents with the Commission and
(b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers
with prior notice of such disclosure permitted under this clause (b) and reasonably cooperate with such Purchaser regarding such disclosure.
4.5
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 in writing with the Company to keep such information confidential. 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
or any of its officers, directors, agents, or employees 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 or any
of its officers, directors, agents, or employees, or a duty to the Company or any of its officers, directors, agents, or employees not
to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable
law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company, the Company shall simultaneously with the delivery of such notice file such notice with the Commission 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.
4.6
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder to fund operations and potential
strategic transactions that may arise, and shall not use such proceeds: (a) for the redemption of any Common Stock or Common Stock Equivalents,
(b) for the settlement of any outstanding litigation or (c) in violation of FCPA or OFAC regulations.
27
4.7
Indemnification of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser
and its directors, officers, shareholders, 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, shareholders,
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 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 that any such Purchaser Party may suffer
or incur as a result of or relating to (a) any 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 solely based upon a material 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 violations by such Purchaser Party of state or federal securities laws
or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence 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 (x) the employment thereof has been specifically authorized by the Company in writing,
(y) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (z) in such action there
is, in the reasonable opinion of counsel, 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. The Company will not be liable to any Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (2) 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 indemnification
required by this Section 4.7 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; provided that, if any Purchaser Party is finally judicially determined not to be entitled
to indemnification or payment under this Section 4.7, such Purchaser Party shall promptly reimburse the Company for any payments that
are advanced pursuant to this provision. The indemnity agreements contained herein shall be in addition to any cause of action or similar
right of any Purchaser Party against the Company and any liabilities the Company may be subject to pursuant to law.
4.8
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 sufficient number of shares of Common Stock for the purpose of enabling the Company to issue
Shares pursuant to this Agreement.
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4.9
Listing of Common Stock. The Company hereby agrees to use reasonable best efforts to maintain the listing of the Common Stock on
the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list all of the Shares
on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further agrees, if the
Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Shares,
and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other Trading Market as promptly
as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a
Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules
of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository
Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository
Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.10
Company Lock-Up; Subsequent Equity Sales. From the date hereof until the expiration of the Company Lock-Up Period, the Company shall
not, without the prior written consent of the Purchasers holding a majority in interest of the Securities, (i) issue, offer, sell, grant
any option to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option to purchase or other disposition
of) any shares of Common Stock or Common Stock Equivalents (other than Exempt Issuances), or (ii) file any registration statement or
any amendment or supplement thereto, or (iii) enter into any agreement, arrangement or understanding with respect to any of the foregoing.
For the avoidance of doubt, this Section shall not restrict the Company from (a) filing any registration statement in connection with
the Registration Rights Agreement or (b) filing a registration statement on Form S-8 in connection with any employee compensation plan.
4.11
ATM Notices; Participation Rights in Certain Exempt Issuances
(a)
ATM Notices. With respect to any issuance of securities pursuant to clause (d) of the definition of “Exempt Issuance”
(“ATM Sales”), the Company shall, no later than 5:00 p.m. (New York City time) on the Friday of each calendar
week during which any ATM Sales have occurred, deliver to each party in the B. Riley Purchasers a written notice setting forth (i) the
aggregate number of shares of Common Stock sold in ATM Sales during such calendar week and (ii) the volume-weighted average price per
share of such ATM Sales.
(b)
Clause (e) of Exempt Issuance Participation Rights. With respect to any proposed issuance of securities pursuant to clause (e)
of the definition of “Exempt Issuance” (a “Covered Equity Issuance”), each party in the B. Riley
Purchasers shall have the right, but not the obligation, to participate in the purchase of the securities being offered in such Covered
Equity Issuance in an amount up to each party’s Covered Pro Rata Portion on the same terms and conditions as those offered to the
other purchasers of such securities in such Covered Equity Issuance.
29
(i)
Prior to effecting any Covered Equity Issuance, the Company shall deliver to each party in the B. Riley Purchasers a written notice (the
“Equity Issuance Notice”) setting forth in reasonable detail (i) the material terms and conditions of the Covered
Equity Issuance, including the number of securities to be issued and the price per security, (ii) such party’s Covered Pro Rata
Portion, and (iii) the proposed closing date of such Covered Equity Issuance. Each party in the B. Riley Purchasers shall have two (2)
Trading Days from the date of receipt of the Equity Issuance Notice to elect to participate in the Covered Equity Issuance by delivering
written notice to the Company (the “Equity Participation Notice”) indicating such party’s election to
participate in such Covered Equity Issuance. If a party to the B. Riley Purchasers does not deliver an Equity Participation Notice within
such two (2) Trading Day period, such party shall be deemed to have waived its participation rights with respect to such Covered Equity
Issuance.
(ii)
For purposes of this Section, “Covered Pro Rata Portion” means, with respect to each party in the B. Riley
Purchasers, an amount equal to (A) the number of securities proposed to be issued in such Covered Equity Issuance, multiplied by (B)
a fraction, the numerator of which is the number of shares of Common Stock held by such party as of the date of the Equity Issuance Notice
and the denominator of which is the total number of shares of Common Stock outstanding as of the date of the Equity Issuance Notice (in
each case, calculated on an as-converted or as-exercised basis for any Common Stock Equivalents held by such party).
(c)
Closing of Participation. The closing of any participation by a party in the B. Riley Purchasers in a Covered Equity Issuance
shall occur concurrently with the closing of such Covered Equity Issuance. At any such closing, each participating party in the B. Riley
Purchasers shall deliver to the Company payment in immediately available funds for the applicable purchase of all or any portion of its
Covered Pro Rata Portion, and the Company shall deliver to each participating party in the B. Riley Purchasers the securities being purchased
by such party pursuant to the applicable Equity Participation Notice.
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 (other than as disclosed to its legal
and other representatives). 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 any of its officers, directors, employees, Affiliates or agent, pursuant to this Agreement, 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.
30
4.13
Form D; Blue Sky Filings. If required, the Company agrees to timely file a Form D with respect to the Securities as required under
Regulation D.
4.14
DGCL Section 203 Waiver. The Company represents and warrants that the Board of Directors has taken all actions necessary to ensure
that the restrictions applicable to business combinations contained in Section 203 of the DGCL are, and will be, inapplicable to the
execution, delivery and performance of this Agreement and each other Transaction Document and to the consummation of the transactions
contemplated hereby and thereby, including the acquisition by the Purchasers of the Securities. The Company covenants that it shall not
take any action that would cause Section 203 of the DGCL to become applicable to the transactions contemplated by this Agreement or any
other Transaction Document.
Article
V
BOARD
MATTERS
5.1
B. Riley Purchasers Board Matters.
(a)
For as long as the B. Riley Purchasers beneficially owns, in the aggregate, securities representing at least 10% of the voting power
of all Common Stock then outstanding (including for purposes of such calculation, assuming the exercise in full of any derivative securities
then beneficially owned by any party in the B. Riley Purchasers and not giving effect to any contractual prohibition on exercise contained
therein), B. Riley Principal Capital (one of the B. Riley Purchasers) shall have the right, subject to compliance with the applicable
rules and regulations of the Trading Market, to designate one (1) member of the Board of Directors (a “B.Riley Board Representative”),
who shall initially be [_____]. The Board of Directors shall cause such individual to be elected or appointed to the Board of Directors
as the B.Riley Board Representative with effect from the Closing Date.
(b)
For as long as the B. Riley Principal Capital holds the right to designate the B.Riley Board Representative pursuant to this Section
5.1:
(i)
the Company shall cause the B.Riley Board Representative to be promptly elected or appointed to the Board of Directors, including by
taking all action as may be necessary to secure the favorable votes of the Board of Directors or the stockholders of the Company, as
applicable, in respect of the election or appointment, as the case may be, of such B.Riley Board Representative at the time of any future
director elections or appointments (including to fill any vacancy), whether at any annual or special meeting of stockholders, or pursuant
to any written consent or vote of the Board of Directors.
31
(ii)
[Reserved.]
(c)
Approval over Certain Board Events. For as long as the B. Riley Principal Capital holds the right to designate a member of the
Board of Directors pursuant to this Section 5.1, the Company shall not, without the affirmative consent of the B.Riley Board Representative,
increase the size of the Board of Directors to more than five (5) members; provided that the affirmative consent of the B.Riley Board
Representative to increase the size of the Board of Directors shall not be required if a majority of the remaining members of the Board
of Directors determines, in good faith, that failure to increase the size of the Board of Directors would reasonably be expected to be
inconsistent with its fiduciary duties to the Company and the Company’s stockholders under Delaware law.
(d)
Expenses; Indemnification.
(i)
In addition, the B.Riley Board Representative will be entitled to compensation in accordance with the Company’s non-employee director
compensation policy, as in effect from time to time.
(ii)
The B.Riley Board Representative shall be entitled to indemnification by the Company to the maximum extent permitted by applicable law
and the Company’s governing documents and shall enter into the Company’s standard form of indemnification agreement with
its executive officers and directors, as may be amended from time to time. The Company hereby acknowledges that the B.Riley Board Representative
may have certain rights to indemnification, advancement of expenses and/or insurance provided by any Purchaser or certain of its affiliates
(collectively, the “Purchaser Indemnitors”), and agrees that the liability of the Company in respect of its
obligations to the B.Riley Board Representative in respect of indemnification, expense advancement, amounts paid in compromise or settlement,
and the other obligations of the Company pursuant to such indemnification agreement or similar or related obligation of the Company shall
be primary, without regard to any advancement or payment by any Purchaser Indemnitor on behalf of the B.Riley Board Representative. Without
limitation by any of the foregoing, the Company hereby irrevocably waives, relinquishes and releases the Purchaser Indemnitors from any
and all claims against any of them for contribution, subrogation or any other recovery of any kind in respect of any Company obligation
to the B.Riley Board Representative under any indemnification agreement or similar or related obligation of the Company. In no case shall
the terms of any agreement with the Company entered into by the B.Riley Board Representative or any other Person be deemed to terminate,
amend, modify or replace the terms of this Section 5.1(d)(ii) except in respect of the rights of any person who explicitly consents to
such termination, amendment, modification or replacement by specific reference to this Section 5.1(d)(ii). B. Riley Principal Capital
shall be entitled to seek enforcement of the Company’s obligations hereunder on behalf of the B.Riley Board Representative and
any Purchaser Indemnitor.
32
(e)
Disqualification; Vacancy.
(i)
For as long as the B. Riley Purchasers holds the right to designate a member of the Board of Directors pursuant to this Section 5.1,
in the event that a vacancy is created at any time by the death, disability, retirement, resignation (including due to the operation
of Section 5.1(e)(ii)) or removal of the B.Riley Board Representative, then the B. Riley Purchasers may designate any other individual
reasonably satisfactory to the Company to serve as the B.Riley Board Representative, subject to the applicable rules and regulations
of the Trading Market.
(ii)
If the Board of Directors reasonably determines that a B.Riley Board Representative is subject to any Disqualification Event, upon the
advice of legal counsel of national standing, then such B.Riley Board Representative shall immediately tender their resignation from
the Board of Directors and its committees. No such disqualification of a serving B.Riley Board Representative shall limit the B. Riley
Purchasers’s rights under this Section 5.1.
Article
VI
MISCELLANEOUS
6.1
Termination. This Agreement may be terminated (i) 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 hereto and (ii) by the Company by written
notice to the Purchaser if the Purchaser has not delivered the Subscription Amount 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).
6.2
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident (a)
to the negotiation, preparation, execution, delivery and performance of this Agreement and (b) the registration of the Shares. The Company
shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter
delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
6.3
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.
6.4
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 time 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 time 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. To the extent that any notice provided
pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
33
6.5
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 a number of Purchasers which represent at least 50.1% in interest of the Securities
based on the initial Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) 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 shall be binding upon each
Purchaser and holder of Securities and the Company.
6.6
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.
6.7
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.”
6.8
No Third-Party Beneficiaries. 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 4.7.
34
6.9
Governing Law. 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. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of
the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan 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 or Proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such action or Proceeding is improper or is an inconvenient venue for such Proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such 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 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 or Proceeding to enforce any provisions of the Transaction Documents, then, in addition
to the obligations of the Company under Section 4.7, the prevailing party in such action or Proceeding 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 or Proceeding.
6.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
6.11
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 e-mail delivery
(including any electronic signature covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic
Signatures and Records Act or other applicable law, e.g., www.docusign.com) or other transmission method, such signature shall
be deemed to have been duly and validly delivered and 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 “.pdf” signature page were an original thereof.
6.12
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.
35
6.13
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.
6.14
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. 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.
6.15
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.
6.16
Payment Set Aside. To the extent that 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.
6.17
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.
36
6.18
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 Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
6.19
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.
6.20
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 WAIVES FOREVER TRIAL BY JURY.
37
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.
BIOMERICA, INC.
Address for Notice:
17571 Von Karman Avenue
Irvine, CA 92614
By:
E-Mail: zirani@biomerica.com
Name:
Zackary S. Irani
Title:
Chief Executive Officer
With
a copy to (which shall not constitute notice):
KL
Gates LLP
1
Park Plaza, Twelfth Floor
Irvine,
California 92614
Attention:
Michael Hedge
[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]
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:
Email Addresses for Notices:
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser(if not same as address for notice):
Subscription
Amount: $ _________________________
Shares: _______________
EIN
Number: _________________________________
[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]
EX-10.2
EX-10.2
Filename: ex10-2.htm · Sequence: 3
EXHIBIT
10.2
BIOMERICA,
INC.
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is made and entered into as of August 20, 2026, by and between Biomerica, Inc.,
a Delaware corporation (the “Company”), and each of the several purchasers signatory hereto (each such purchaser,
a “Purchaser” and, collectively, the “Purchasers”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser
(the “Purchase Agreement”).
The
Company and each Purchaser hereby agree as follows:
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).
“Effectiveness
Date” means, with respect to a Registration Statement required to be filed hereunder, the 30th calendar day following the
applicable Filing Date (or, in the event of a “full review” by the Commission, the 60th calendar day following the applicable
Filing Date); 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 5th Trading Day following the date on which the Company is so notified in writing if such date precedes the dates
otherwise required above, provided, further, 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(d).
“Event
Date” shall have the meaning set forth in Section 2(d).
“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 30th calendar day following the
Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c),
the earliest reasonably practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement
related to the Registrable Securities.
“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).
“Plan
of Distribution” shall have the meaning set forth in Section 2(a).
“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.
“Registrable
Securities” means, as of any date of determination, (a) all Shares and (b) any securities issued or then issuable upon
any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however,
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 (a) 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, (b) such Registrable Securities
have been previously sold pursuant to such effective Registration Statement or in accordance with Rule 144, or (c) such securities become
eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144.
“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional
registration statements contemplated by Section 2(c) or Section 3(c), 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, (ii) the Securities Act and (iii) any other rules and regulations of the Commission.
“Shares”
shall have the meaning ascribed to such term in Section 1.1 of the Purchase Agreement.
2
2. Shelf
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 eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise directed by at least 85%
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 Section 3(c)) to be declared effective under the Securities Act as promptly
as practicable 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 cease to be Registrable Securities under this Agreement (the “Effectiveness
Period”). The Company shall notify the Holders via e-mail 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 5:30 p.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, if required.
(b) Notwithstanding
the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities
cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement,
the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the
Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered
by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering,
subject to the provisions of Section 2(e); with respect to filing on Form S-3 or other appropriate form, and subject to the provisions
of Section 2(d) with respect to the payment of liquidated damages; provided, however, that prior to filing such amendment, the
Company shall be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities
in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.
(c) Notwithstanding
any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission or
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 diligent efforts to advocate with the Commission for the
registration of all or a greater portion of Registrable Securities), 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:
a. First,
the Company shall reduce or eliminate any securities to be included other than Registrable
Securities; and
b. Second,
the Company shall reduce Registrable Securities represented by Shares (applied, in the case
that some Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Shares 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.
3
(d) If:
(i) the Initial Registration Statement is not filed on or prior to its Filing Date, 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 in writing 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 fifteen (15) 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 (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 ten (10) consecutive calendar days or more than an aggregate
of fifteen (15) calendar days (which need not be consecutive calendar days) during any 12-month 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 ten (10) or fifteen (15) 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 such Event Date and 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, as partial liquidated damages and not as a penalty, equal to the product of (1) the product of (A) 1.0% multiplied
by (B) the quotient of (I) the number and type of each Holders’ Registrable Securities that are not then covered by a Registration
Statement that is then effective and available for use by the Holders divided by (II) the total number and type of the Holders’
Registrable Securities initially purchased multiplied by (2) the aggregate allocated Subscription Amount paid by such Holder pursuant
to the Purchase Agreement for such Registrable Securities that are not so covered by a Registration Statement. The parties agree that
the maximum aggregate liquidated damages payable to a Holder under this Agreement shall be 5.0% of the aggregate Subscription Amount
paid by such Holder pursuant to the Purchase Agreement, and in no event shall partial liquidated damages accrue with respect to any Event
after such Event has been cured. Notwithstanding the foregoing, no partial liquidated damages shall accrue under this Section 2(d): (A)
until five (5) Trading Days after the Company’s receipt of written notice from such Holder of the applicable Event; (B) during
the pendency of a good-faith dispute as to whether an Event has occurred or has been cured; or (C) for any period of delay attributable
to events outside the Company’s reasonable control, including any delay attributable to review or comment by the Commission, the
Company’s independent auditors, the Transfer Agent, the Depository Trust Company or any other event outside the Company’s
reasonable control; provided that clause (C) shall not excuse the accrual of partial liquidated damages to the extent such delay
results from the Company’s failure to act within the periods specified in clauses (ii) and (iii) above. If the Company fails to
pay any partial 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 10.0% 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 partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in
full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior
to the cure of an Event.
4
(e) If
Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the
resale of the Registrable Securities on another appropriate form, and (ii) undertake to register the Registrable Securities on Form S-3
as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then
in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by
the Commission.
(f) Notwithstanding
anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as
any underwriter without the prior written consent of such Holder, unless required by law.
3. Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company shall:
(a) Not
less than two (2) 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 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.
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 two (2) 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.
(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), 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.
5
(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.
(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) Upon
written request, deliver 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 (or successor thereto) need not be delivered.
(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.
6
(i) If
requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates 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 practicable 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 (a “Suspension Event”) 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, subject to the payment of partial
liquidated damages otherwise required pursuant to Section 2(d), on more than two (2) occasions
for a period of more than sixty (60) consecutive days each or more than a total of one hundred-twenty (120) calendar days, in each case
in any three hundred sixty (360) day period.
Upon
receipt of any written notice from the Company (which notice shall not contain any material non-public information regarding the Company)
of the happening of any Suspension Event during the period that the Registration Statement is effective or if as a result of a Suspension
Event the Registration Statement or related Prospectus contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made
(in the case of the Prospectus) not misleading, the undersigned agrees that it will immediately discontinue offers and sales of the Registrable
Securities under the Registration Statement (excluding, for the avoidance of doubt, sales conducted pursuant to Rule 144) until the undersigned
receives copies of a supplemental or amended prospectus (which the Company agrees to promptly prepare) that corrects the misstatement(s)
or omission(s) referred to above and receives notice that any post-effective amendment has become effective or unless otherwise notified
by the Company that it may resume such offers and sales. If so directed by the Company, the undersigned will deliver to the Company or,
in the undersigned’s sole discretion destroy, all copies of the Prospectus covering the Registrable Securities in the undersigned’s
possession; provided, however, that this obligation to deliver or destroy all copies of the Prospectus covering the Registrable
Securities shall not apply (w) to the extent the undersigned is required to retain a copy of such prospectus (A) in order to comply with
applicable legal, regulatory, self-regulatory or professional requirements or (B) in accordance with a bona fide pre-existing document
retention policy or (x) to copies stored electronically on archival servers as a result of automatic data back-up. The Company agrees
that the Holders shall not have any duty of confidentiality to the Company as related to any written notice Company (which notice shall
not contain any material non-public information regarding the Company) from the Company of the happening of any Suspension Event.
7
(k) Otherwise
use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and
the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement
or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at
any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof,
the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions
as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
(l) The
Company shall use its commercially reasonable efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for
the registration of the resale of Registrable Securities.
(m) 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.
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. In no event shall the Company be responsible for any broker or similar commissions of any Holder or any legal fees
or other costs of the Holders.
8
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 and employees, 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 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 and, documented 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 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 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. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any
Registrable Securities by any of the Holders in accordance with Section 6(h).
(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: 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 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
(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. In no event shall the liability of a selling Holder be greater in amount than the dollar amount
of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any
damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the
sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.
9
(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 reasonable and documented
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 and documented fees and expenses of the Indemnified Party (including reasonable and documents
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, within fifteen (15) 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 determined by a court of competent jurisdiction (which determination
is not subject to appeal or further review) not to 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.
10
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. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the
amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
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.
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.
(b) No
Piggyback on Registrations; Prohibition on Filing Other Registration Statements. 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 Statements 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 so long as no new securities
are registered on any such existing registration statements and (ii) a replacement shelf registration statement on Form S-3.
(c) 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 subject to the provisions of Section 2(d).
(d) 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 50.1% or more of the then outstanding Registrable Securities, provided that, if any amendment,
modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately
impacted Holder (or group of Holders) shall be required. 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 only 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(d). 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.
11
(e) 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.
(f) 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 6.7 of the Purchase Agreement.
(g) No
Inconsistent Agreements. The Company has not entered, as of the date hereof, nor shall it, 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. The Company has not 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.
(h) 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 e-mail delivery
of a “.pdf” format data file or any electronic signature complying with the U.S. federal ESIGN Act of 2000 (e.g.,
www.docusign.com), 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 “.pdf” signature page were an original thereof.
(i) 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.
(j) Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(k) 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.
(l) 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.
(m) 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 group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect
to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders
are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions.
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. The use of
a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action
or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do
so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a
Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.
[Remainder
of Page Left Blank Intentionally]
12
In
Witness Whereof, the parties have executed this
Registration Rights Agreement as of the date first written above.
Biomerica,
Inc.
By:
Name:
Title:
[BIOMERICA,
INC. – COMPANY SIGNATURE PAGE]
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: __________________________
[BIOMERICA,
INC. – PURCHASER SIGNATURE PAGE]
Annex
A
Plan
of Distribution
Each
selling stockholder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their
shares of common stock covered hereby on The Nasdaq Global 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 such shares of common stock:
● ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
● block
trades in which the broker-dealer will attempt to sell the shares of common stock 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 shares of common stock 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 the shares of common stock under Rule 144 or any other exemption from registration under the Securities
Act of 1933, as amended, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling stockholders may arrange for other brokers-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.
In
connection with the sale of the shares of common stock 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 the shares of common stock 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 the shares of the common stock. 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 the shares of common
stock 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 shares of common stock 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 us that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the shares of common stock.
We
are required to pay certain fees and expenses incurred by us incident to the registration of the shares of common stock. We have agreed
to indemnify the selling stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.
We
have agreed to keep the registration statement of which this prospectus forms a part effective until the earlier of (i) the date on which
the shares of common stock 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 us to be in compliance with the current public information under Rule
144 under the Securities Act or any other rule of similar effect, and (ii) all of the shares of common stock have been sold pursuant
to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The shares of common stock will be sold
only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states,
the shares of common stock 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 Securities Exchange Act of 1934, as amended, any person engaged in the distribution of the
shares of common stock 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 Securities Exchange Act of 1934, as amended, 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).
Annex
B
SELLING
STOCKHOLDERS
The
selling stockholders may offer and sell, from time to time, any or all of the shares of common stock being offered for resale by this
prospectus, which consists of up to [●] shares of common stock.
For
additional information regarding the issuance of these securities, see the section titled “Private Placement of Shares of Common
Stock.” Except for the ownership of the shares of common stock, the selling stockholders have not had any material relationship
with us within the past three years.
As
used in this prospectus, the term “selling stockholders” includes the selling stockholders listed in the table below, together
with any additional selling stockholders listed in a subsequent amendment to this prospectus, and their donees, pledgees, assignees,
transferees, distributees and successors-in-interest that receive shares in any non-sale transfer after the date of this prospectus.
In
accordance with the terms of a registration rights agreement with the selling stockholders, this prospectus covers the resale of the
number of shares of common stock issued to the selling stockholders.
The
table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock by
each of the selling stockholders as of [●], 2026. The following table also provides the number of shares of common stock that may
be sold by each selling stockholder under this prospectus and that each selling stockholder will beneficially own assuming all the shares
of common stock that may be offered pursuant to this prospectus are sold. Because each selling stockholder may dispose of all, none or
some portion of their shares of common stock, no estimate can be given as to the number of shares of common stock that will be beneficially
owned by a selling stockholder upon termination of this offering. For purposes of the table below; however, we have assumed that after
termination of this offering none of the shares of common stock covered by this prospectus will be beneficially owned by the selling
stockholders and further assumed that the selling stockholders will not acquire beneficial ownership of any additional securities during
the offering. In addition, the selling stockholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise
dispose of, at any time and from time to time, our securities in transactions exempt from the registration requirements of the Securities
Act after the date on which the information in the table is presented. See the section titled “Plan of Distribution.”
Beneficial
Ownership
Prior to This Offering
Number
of
Shares Being
Beneficial
Ownership
After this Offering
Name
of Selling Stockholder
Shares
%
Offered
Shares
%
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Trading symbol of an instrument as listed on an exchange.
+ References
No definition available.
+ Details
Name:
dei_TradingSymbol
Namespace Prefix:
dei_
Data Type:
dei:tradingSymbolItemType
Balance Type:
na
Period Type:
duration
X
- Definition
Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
+ Details
Name:
dei_WrittenCommunications
Namespace Prefix:
dei_
Data Type:
xbrli:booleanItemType
Balance Type:
na
Period Type:
duration