Exhibit 10.2

 

COMMON STOCK PURCHASE AGREEMENT

 

COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of December 10, 2019
by and between Beyond Air, Inc., a Delaware corporation (the “Company”), and the
buyers listed on the Schedule of Buyers attached hereto as Exhibit A
(individually, the “Buyer” and collectively, the “Buyers”). Capitalized terms
used herein and not otherwise defined herein are defined in Section 7 hereof.

 

RECITALS

 

A. Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to each Buyer, severally and not jointly, and each Buyer wishes
to buy from the Company, shares of the Company’s Common Stock, par value $0.0001
per share (the “Common Stock”), with the amount to be purchased by each Buyer as
set forth opposite such Buyer’s name on the Schedule of Buyers attached hereto
as Exhibit A. The shares of Common Stock to be purchased hereunder are referred
to herein as the “Purchase Shares.”

 

B. The Company intends to enter into an Underwriting Agreement by and between
the Company and SunTrust Robinson Humphrey, Inc. as representatives of the
Underwriters listed on Schedule 1 thereto on or about December 10, 2019 (the
“Underwriting Agreement”) pursuant to which the Company will offer and sell
shares of its common stock in an underwritten public offering (the “Public
Offering”) pursuant to the Company’s registration statement on Form S-3 (File
No. 333-231416) (the “Registration Statement”).

 

NOW THEREFORE, the Company and the Buyers hereby agree as follows:

 

1. PURCHASE OF COMMON STOCK.

 

Subject to the terms and conditions set forth in this Agreement, the Company
agrees to sell to the Buyers, and the Buyers or their designees or assignees
have agreed to purchase from the Company, Purchase Shares as follows:

 

(a) Purchase. On the date each of the conditions set forth in Sections 5 and 6
below is satisfied, each Buyer shall purchase from the Company an aggregate
number of Purchase Shares equal to (i) the aggregate dollar amount set forth
opposite such Buyer’s name on the Schedule of Buyers attached hereto as Exhibit
A (the “Purchase Price”) divided by (ii) the Offering Price; provided, however,
that (A) no fractional number of Purchase Shares shall be sold hereunder, (B)
any fractional number of Purchase Shares shall be rounded down to the nearest
whole number of Purchase Shares and (C) the Purchase Price will be reduced by
the value of any fractional share (as calculated on the basis of the Offering
Price). On or prior to the Closing Date, each Buyer will pay the Purchase Price
set forth opposite such Buyer’s name on Exhibit A (as adjusted for the value of
any fractional share) via wire transfer in accordance with wire instructions
provided by the Company to the Buyers prior to the Closing Date. Each Buyer
shall severally, and not jointly, be liable for only the purchase of Purchase
Shares calculated in accordance with this Section 1(a) and not for the purchase
of Purchase Shares so calculated for any other Buyer. On or before the Closing
Date, the Company will instruct its transfer agent to make book-entry notations
representing the Purchase Shares, in each case against delivery of the aggregate
Purchase Price. Upon issuance and payment therefor as provided herein, such
Purchase Shares shall be validly issued, fully paid and non-assessable. The date
of the Buyers’ purchase of the Purchase Shares is referred to as the “Closing
Date.”

 

(b) Taxes. The Company shall pay any and all transfer, stamp or similar taxes
that may be payable with respect to the issuance and delivery of any shares of
Common Stock to the Buyers made under this Agreement.

 

2. BUYERS’ REPRESENTATIONS AND WARRANTIES.

 

Each Buyer, severally and not jointly, represents and warrants to the Company
that:

 

(a) Investment Purpose. The Buyer is entering into this Agreement and acquiring
the Purchase Shares for its own account for investment only and not with a view
towards, or for resale in connection with, the public sale or distribution
thereof; provided, however, by making the representations herein, the Buyer does
not agree to hold any of the Purchase Shares for any minimum or other specific
term.

 

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(b) Regulation S.

 

  (i) The Buyer is aware that the Shares have not been registered under the
Securities Act or any state securities laws or regulations in reliance upon the
exemption set forth in Section 4(2) of the Securities Act and safe-harbor set
forth in Regulation S adopted under the Securities Act that provides certain
offerings conducted outside the United States are not subject to the
registration requirements of the Securities Act, and similar exemptions under
state law. The Buyer will not offer or sell the Shares unless they are
registered or are exempt from registration under the Securities Act and any
applicable state securities laws or regulations.         (ii) The Buyer is
neither a U.S. person nor acquiring the Shares for the account or benefit of any
U.S. person. The Buyer, if other than a natural person, was not formed for the
purpose of acquiring the Shares.         (iii) The Buyer understands that a
“U.S. person”, as defined by Regulation S, includes any natural person resident
in the United States; any partnership or corporation organized or incorporated
under the laws of the United States; any estate of which any executor or
administrator is a “U.S. person”; any trust of which any trustee is a “U.S.
person”; any agency or branch of a foreign entity located in the United States;
any non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a “U.S.
person”; any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or (if any
individual) resident in the United States; and any partnership or corporation
organized or incorporated under the laws of a jurisdiction other than the United
States which was formed by a “U.S. person” principally for the purpose of
investing in securities not registered under the Securities Act, unless it is
organized or incorporated, and owned, by accredited investors (as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act) who are not
natural persons, estates or trusts.         (iv) The Buyer is making this
purchase from his residence or offices at the address set forth in Exhibit A.
The Buyer understands that the exemption afforded by Regulation S requires that
the purchasers of the securities not be in the United States when the offer is
made. The purchase of the Purchase Shares hereunder by the Buyer is in
accordance with all securities and other laws of the jurisdiction in which it is
incorporated or legally resident. This Agreement has not been executed or
delivered by the Buyer in the United States.         (v) The Buyer is aware that
the Purchase Shares have not been registered under the Securities Act or any
state securities laws or regulations in reliance upon the exemption set forth in
Section 4(2) of the Securities Act and safe-harbor set forth in Regulation S
adopted under the Securities Act that provides certain offerings conducted
outside the United States are not subject to the registration requirements of
the Securities Act, and similar exemptions under state law. The Buyer will not
offer or sell the Purchase Shares unless they are registered or are exempt from
registration under the Securities Act and any applicable state securities laws
or regulations.

 

(c) Information. The Buyer has been furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the
offer and sale of the Purchase Shares that have been reasonably requested by the
Buyer, including, without limitation, the SEC Filings and Risk Factors set forth
in Exhibit B hereto. The Buyer understands that its investment in the Purchase
Shares involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the Purchase Shares including a total loss,
(ii) has such knowledge and experience in financial and business matters that it
is capable of evaluating the merits and risks of the proposed investment in the
Purchase Shares and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company and other matters related to an investment in the
Purchase Shares. Neither such inquiries nor any other due diligence
investigations conducted by the Buyer or its representatives shall modify, amend
or affect the Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. The Buyer has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Purchase Shares.

 

(d) No Governmental Review. The Buyer understands that no United States federal
or state agency or any other foreign or local government or governmental agency
has passed on or made any recommendation or endorsement of the Purchase Shares
or the fairness or suitability of the investment in the Purchase Shares nor have
such authorities passed upon or endorsed the merits of the offering of the
Purchase Shares.

 

(e) Organization. The Buyer is organized, validly existing and in good standing
or equivalent under the laws of the jurisdiction set forth opposite its name on
the Schedule of Buyers attached hereto as Exhibit A and has the requisite
organizational power and authority to own its properties and to carry on its
business as now being conducted.

 

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(f) Validity; Enforcement. This Agreement has been duly and validly authorized,
executed and delivered on behalf of the Buyer and is a valid and binding
agreement of the Buyer enforceable against the Buyer in accordance with its
terms, subject as to enforceability to (i) general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies and (ii) public policy underlying any
law, rule or regulation (including any federal or state securities law, rule or
regulation) with regards to indemnification, contribution or exculpation. The
execution and delivery of this Agreement by the Buyer and the consummation by it
of the transactions contemplated hereby do not conflict with the Buyer’s
certificate of organization, operating agreement or similar documents, and do
not require further consent or authorization by the Buyer, its partners,
shareholders, managers or its members.

 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company represents and warrants to the Buyers that as of the date hereof and
as of the Closing Date:

 

(a) Financial Statements. The financial statements of the Company, together with
the related notes, set forth or incorporated by reference in the SEC Filings
comply in all material respects with the requirements of the Securities Act and
the Exchange Act and fairly present in all material respects the financial
condition of the Company and its consolidated subsidiaries as of the dates
indicated and the results of operations and changes in cash flows for the
periods therein specified in conformity with generally accepted accounting
principles in the United States (“GAAP”) consistently applied throughout the
periods involved; all non-GAAP financial information included in the SEC Filings
complies in all material respects with the requirements of Regulation G and Item
10 of Regulation S-K under the Securities Act; and, except as disclosed in the
SEC Filings, there are no material off-balance sheet arrangements (as defined in
Regulation S-K under the Securities Act, Item 303(a)(4)(ii)) or any other
relationships with unconsolidated entities or other persons, that may have a
material current or, to the Company’s knowledge, material future effect on the
Company’s financial condition, results of operations, liquidity, capital
expenditures, capital resources or significant components of revenue or
expenses. No other financial statements or schedules are required to be included
in the SEC Filings. To the Company’s knowledge, each of Kost Forer Gabbay &
Kasierer, a Member of Ernst & Young Global, and Friedman LLP, is (x) an
independent public accounting firm within the meaning of the Securities Act and
the Rules and Regulations, (y) a registered public accounting firm (as defined
in Section 2(a)(12) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley
Act”)) and (z) not in violation of the auditor independence requirements of the
Sarbanes-Oxley Act.

 

(b) Organization and Good Standing. Each of the Company and its subsidiary
Beyond Air Ltd. has been duly organized and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation (if
applicable in such jurisdiction). Each of the Company and its subsidiaries has
full corporate power and authority to own its properties and conduct its
business as currently being carried on and as described in the SEC Filings, and
is duly qualified to do business as a foreign corporation in good standing in
each jurisdiction in which it owns or leases real property or in which the
conduct of its business makes such qualification necessary and in which the
failure to so qualify would have a material adverse effect upon the business,
prospects, management, properties, operations, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries, taken
as a whole (“Material Adverse Effect”).

 

(c) Absence of Certain Events. Except as disclosed in the SEC Filings, since the
end of the period covered by the latest audited financial statements included or
incorporated by reference in any SEC Filings, neither the Company nor any of its
subsidiaries has incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions, or declared or paid any
dividends or made any distribution of any kind with respect to its capital
stock; and there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise or settlement (including any “net” or “cashless”
exercises or settlements) of outstanding options or warrants or conversion of
convertible securities), or any material change in the short-term or long-term
debt (other than as a result of the conversion of convertible securities), or
any issuance of options, warrants, convertible securities or other rights to
purchase the capital stock, of the Company or any of its subsidiaries, or any
material adverse change in the general affairs, condition (financial or
otherwise), business, prospects, management, properties, operations or results
of operations of the Company and its subsidiaries, taken as a whole (“Material
Adverse Change”) or any development which could reasonably be expected to result
in any Material Adverse Change.

 

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(d) Absence of Proceedings. Except as set forth in the SEC Filings, there is not
pending or, to the knowledge of the Company, threatened or contemplated, any
action, suit or proceeding (a) to which the Company or any of its subsidiaries
is a party or (b) which has as the subject thereof any officer or director of
the Company or any subsidiary, any employee benefit plan sponsored by the
Company or any subsidiary or any property or assets owned or leased by the
Company or any subsidiary before or by any court or Governmental Authority (as
defined below), or any arbitrator, which, individually or in the aggregate,
would reasonably be expected to result in any Material Adverse Change, or would
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations under this Agreement or which are otherwise
material in the context of the sale of the Purchase Shares. There are no current
or, to the knowledge of the Company, pending, legal, governmental or regulatory
actions, suits or proceedings (x) to which the Company or any of its
subsidiaries is subject or (y) which has as the subject thereof any officer or
director of the Company or any subsidiary, any employee plan sponsored by the
Company or any subsidiary or any property or assets owned or leased by the
Company or any subsidiary, that are required to be described in the SEC Filings
and that have not been so described.

 

(e) Disclosure of Legal Matters. There are no statutes, regulations, contracts
or documents that are required to be described in the SEC Filings that have not
been so described.

 

(f) Authorization; No Conflicts; Authority. This Agreement has been duly
authorized, executed and delivered by the Company, and constitutes a valid,
legal and binding obligation of the Company, enforceable in accordance with its
terms, except as rights to indemnity hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The execution,
delivery and performance of this Agreement and the consummation of the
transactions herein contemplated will not (A) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its subsidiaries is
subject, (B) result in any violation of the provisions of the Company’s charter
or by-laws or (C) result in the violation of any law or statute or any judgment,
order, rule, regulation or decree of any court or arbitrator or federal, state,
local or foreign governmental agency or regulatory authority having jurisdiction
over the Company or any of its subsidiaries or any of their properties or assets
(each, a “Governmental Authority”), except in the case of clauses (A) or (C) as
would not reasonably be expected to result in a Material Adverse Effect. No
consent, approval, authorization or order of, or registration or filing with any
Governmental Authority is required for the execution, delivery and performance
of this Agreement or for the consummation of the transactions contemplated
hereby, including the issuance or sale of the Purchase Shares by the Company,
except such as may be required under the Securities Act, the rules of the
Principal Market, the rules of the Financial Industry Regulatory Authority
(“FINRA”) or state securities or blue sky laws; and the Company has full power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby, including the authorization, issuance and sale of the
Purchase Shares as contemplated by this Agreement.

 

(g) Capitalization; the Securities; Registration Rights. All of the issued and
outstanding shares of capital stock of the Company, including the outstanding
shares of Common Stock, are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state and
foreign securities laws, were not issued in violation of or subject to any
preemptive rights or other rights to subscribe for or purchase securities that
have not been waived in writing, and the holders thereof are not subject to
personal liability by reason of being such holders; the Purchase Shares which
may be sold hereunder by the Company have been duly authorized and, when issued,
delivered and paid for in accordance with the terms of this Agreement, will have
been validly issued and will be fully paid and nonassessable, and the holders
thereof will not be subject to personal liability by reason of being such
holders; and the capital stock of the Company, including the Common Stock,
conforms to the description thereof in the SEC Filings. Except as otherwise
stated in the SEC Filings, (A) there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or transfer of,
any shares of Common Stock pursuant to the Company’s charter, by-laws or any
agreement or other instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound; and (B) the
offering or sale of the Purchase Shares as contemplated by this Agreement gives
rise to any rights for or relating to the registration of any shares of Common
Stock or other securities of the Company (collectively “Registration Rights”).
All of the issued and outstanding shares of capital stock of each of the
Company’s subsidiaries have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise described in the SEC
Filings, the Company owns of record and beneficially, free and clear of any
security interests, claims, liens, proxies, equities or other encumbrances, all
of the issued and outstanding shares of such stock. The Company has an
authorized and outstanding capitalization as set forth in the SEC Filings as of
their respective dates. The Common Stock (including the Purchase Shares)
conforms in all material respects to the description thereof contained in the
SEC Filings

 

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(h) Stock Options. Except as described in the SEC Filings, there are no options,
warrants, agreements, contracts or other rights in existence to purchase or
acquire from the Company or any subsidiary of the Company any shares of the
capital stock of the Company or any subsidiary of the Company. The description
of the Company’s stock option, stock bonus and other stock plans or arrangements
(the “Company Stock Plans”), and the options (the “Options”) or other rights
granted thereunder, set forth in the SEC Filings accurately and fairly presents
in all material respects the information required to be shown with respect to
such plans, arrangements, options and rights. Each grant of an Option (A) was
duly authorized no later than the date on which the grant of such Option was by
its terms to be effective by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company (or a duly
constituted and authorized committee thereof) and any required stockholder
approval by the necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and delivered by each
party thereto and (B) was made in accordance with the terms of the applicable
Company Stock Plan, and all applicable laws and regulatory rules or
requirements, including all applicable federal securities laws.

 

(i) Compliance with Laws. The Company and each of its subsidiaries holds, and is
operating in compliance in all material respects with, all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates and orders
of any Governmental Authority or self-regulatory body required for the conduct
of its business and all such franchises, grants, authorizations, licenses,
permits, easements, consents, certifications and orders are valid and in full
force and effect except for the absence of which would not reasonably be
expected to result in a Material Adverse Effect; and except as would not
reasonably be expected to result in a Material Adverse Effect, neither the
Company nor any of its subsidiaries has received notice of any revocation or
modification of any such franchise, grant, authorization, license, permit,
easement, consent, certification or order or has reason to believe that any such
franchise, grant, authorization, license, permit, easement, consent,
certification or order will not be renewed in the ordinary course; and the
Company and each of its subsidiaries is in compliance in all material respects
with all applicable federal, state, local and foreign laws, regulations, orders
and decrees.

 

(j) Ownership of Assets. The Company and its subsidiaries have good and
marketable title to all property (whether real or personal) described in the SEC
Filings as being owned by them, in each case free and clear of all liens,
claims, security interests, other encumbrances or defects except such as would
not reasonably be expected to have a Material Adverse Effect or as are described
in the SEC Filings. The property held under lease by the Company and its
subsidiaries is held by them under valid, subsisting and enforceable leases with
only such exceptions with respect to any particular lease as do not interfere in
any material respect with the conduct of the business of the Company or its
subsidiaries.

 

(k) Intellectual Property. The Company and each of its subsidiaries owns,
possesses, has a valid license to use, or can acquire on reasonable terms, all
Intellectual Property set forth in Schedule 2(k). Furthermore, (A) to the
knowledge of the Company, there is no infringement, misappropriation or
violation by third parties of any Company Intellectual Property , except as such
infringement, misappropriation or violation would not result in a Material
Adverse Effect; (B) there is no pending or, to the knowledge of the Company,
threatened, action, suit, proceeding or claim by others challenging the
Company’s or any of its subsidiaries’ rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (C) the Intellectual Property owned by the Company and
its subsidiaries, and to the knowledge of the Company, the Intellectual Property
licensed to the Company and its subsidiaries, has not been adjudged invalid or
unenforceable, in whole or in part, and there is no pending or, to the knowledge
of the Company, threatened action, suit, proceeding or claim by others
challenging the validity of any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (D)
there is no pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others that the Company or any of its subsidiaries
infringes, misappropriates or otherwise violates any Intellectual Property or
other proprietary rights of others, neither the Company or any of its
subsidiaries has received any written notice of such claim and, with respect to
the conduct of the Company’s and its subsidiaries’ business as now conducted or
as described in the SEC Filings to be conducted, except where such violation
would not reasonably be expected to result in a Material Adverse Effect, the
Company is unaware of any other fact which would form a reasonable basis for any
such claim; and (E) to the Company’s knowledge, no employee of the Company or
any of its subsidiaries 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 any of its subsidiaries or actions undertaken by the employee while employed
with the Company or any of its subsidiaries, except as such violation would not
result in a Material Adverse Effect. “Intellectual Property” shall mean all
patents, patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
domain names, technology, know-how and other intellectual property.

 

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(l) Health Care Authorizations. The Company has submitted and possesses, or
qualifies for applicable exemptions to, such valid and current registrations,
listings, approvals, clearances, licenses, certificates, authorizations or
permits and supplements or amendments thereto issued or required by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their business, including, without limitation, all such certificates,
authorizations and permits required by the United States Food and Drug
Administration (the “FDA”), the United States Department of Health and Human
Services (“HHS”), the United States Centers for Medicare & Medicaid Services
(“CMS”), the European Medicines Agency (“EMEA”), Health Canada or any other
state, federal or foreign agencies or bodies engaged in the regulation of
medical devices (including diagnostic products), drugs or biohazardous
materials, and the Company have not received any notice of proceedings relating
to the revocation or modification of, or non-compliance with, any such license,
certificate, authorization or permit, except for such registrations, listings,
approvals, clearances, licenses, certificates, authorizations or permits, the
lack of which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

(m) Clinical Trials. The studies, tests and preclinical and clinical trials
conducted by or on behalf of, or sponsored by, the Company, or in which the
Company has participated, that are described in the SEC Filings, or the results
of which are referred to in the SEC Filings, were and, if still pending, are
being conducted in all material respects in accordance with protocols,
procedures and controls pursuant to, where applicable, accepted professional and
scientific standards for products or product candidates comparable to those
being developed by the Company and all applicable statutes, rules and
regulations of the FDA, the EMEA, Health Canada and other comparable drug and
medical device (including diagnostic product) regulatory agencies outside of the
United States to which they are subject; the descriptions of the results of such
studies, tests and trials contained in the SEC Filings do not contain any
misstatement of a material fact or omit a material fact necessary to make such
statements not misleading; the Company has no knowledge of any studies, tests or
trials not described in the SEC Filings the results of which reasonably call
into question in any material respect the results of the studies, tests and
trials described in the SEC Filings; and the Company has not received any
notices or other correspondence from the FDA, EMEA, Health Canada or any other
foreign, state or local governmental body exercising comparable authority or any
Institutional Review Board or comparable authority requiring or threatening the
termination, suspension or material modification of any studies, tests or
preclinical or clinical trials conducted by or on behalf of, or sponsored by,
the Company or in which the Company has participated, and, to the Company’s
knowledge, there are no reasonable grounds for the same. Except as disclosed in
the SEC Filings, there has not been any violation of law or regulation by the
Company in its respective product development efforts, submissions or reports to
any regulatory authority that would reasonably be expected to require
investigation, corrective action or enforcement action.

 

(n) Compliance with Health Care Laws. The Company and, to the Company’s
knowledge, its directors, employees and agents (while acting in such capacity)
are in material compliance with, all health care laws applicable to the Company,
or any of its products or activities, including, but not limited to, the federal
Anti-Kickback Statute (42 U.S.C. Section 1320a-7b(b)), the Anti-Inducement Law
(42 U.S.C. Section 1320a-7a(a)(5)), the civil False Claims Act (31 U.S.C.
Section 3729 et seq.), the administrative False Claims Law (42 U.S.C. Section
1320a-7b(a)), the Stark law (42 U.S.C. Section 1395nn), the Health Insurance
Portability and Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.) as
amended by the Health Information Technology for Economic and Clinical Health
Act (42 U.S.C. Section 17921 et seq.), the exclusion laws (42 U.S.C. Section
1320a-7), the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et
seq.), the Controlled Substances Act (21 U.S.C. Section 801 et seq.), the Public
Health Service Act (42 U.S.C. Section 201 et seq.), the Clinical Laboratory
Improvement Amendments of 1988 (42 U.S.C. Section 263a), Medicare (Title XVIII
of the Social Security Act), Medicaid (Title XIX of the Social Security Act),
and the Patient Protection and Affordable Care Act of 2010, as amended by the
Health Care and Education Reconciliation Act of 2010, the regulations
promulgated pursuant to such laws, and any other state, federal or foreign law,
accreditation standards, regulation, memorandum, opinion letter, or other
issuance which imposes requirements on the manufacturing, development, testing,
labeling, advertising, marketing or distribution of drugs and medical devices
(including diagnostic products), kickbacks, patient or program charges,
recordkeeping, claims process, documentation requirements, medical necessity,
referrals, the hiring of employees or acquisition of services or supplies from
those who have been excluded from government health care programs, quality,
safety, privacy, security, licensure, accreditation or any other aspect of
providing health care, clinical laboratory or diagnostics products or services
(collectively, “Health Care Laws”). The Company has not received any
notification, correspondence or any other written or oral communication,
including notification of any pending or threatened claim, suit, proceeding,
hearing, enforcement, investigation, arbitration or other action from any
governmental authority, including, without limitation, the FDA, the EMEA, Health
Canada, the United States Federal Trade Commission, the United States Drug
Enforcement Administration (“DEA”), CMS, HHS’s Office of Inspector General, the
United States Department of Justice and state Attorneys General or similar
agencies of potential or actual non-compliance by, or liability of, the Company
under any Health Care Laws, except, with respect to any of the foregoing, such
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. To the Company’s knowledge, there are no facts or
circumstances that would reasonably be expected to give rise to material
liability of the Company under any Health Care Laws. The statements with respect
to Health Care Laws and the Company’s compliance therewith included in the SEC
Filings fairly summarize the matters therein described.

 

 6 

 

 

(o) Post-Market Reporting Obligations. The Company is complying in all material
respects with all applicable regulatory post-market reporting obligations,
including, without limitation, the FDA’s adverse event reporting requirements at
21 CFR Parts 310, 314, 600, and 803, and, to the extent applicable, the
respective counterparts thereof promulgated by governmental authorities in
countries outside the United States.

 

(p) No Shutdowns or Prohibitions. The Company has not had any product, clinical
laboratory or manufacturing site (whether Company-owned or that of a third party
manufacturer for the Company’s products) subject to a governmental authority
(including FDA) shutdown or import or export prohibition, nor received any FDA
Form 483 or other governmental authority notice of inspectional observations,
“warning letters,” “untitled letters,” requests to make changes to the Company’s
products, processes or operations, or similar correspondence or notice from the
FDA or other governmental authority alleging or asserting material noncompliance
with any applicable Health Care Laws. To the Company’s knowledge, neither the
FDA nor any other governmental authority is considering such action.

 

(q) No Safety Notices. (i) Except as disclosed in the SEC Filings, there have
been no recalls, field notifications, field corrections, market withdrawals or
replacements, warnings, “dear doctor” letters, investigator notices, safety
alerts or other notice of action relating to an alleged lack of safety,
efficacy, or regulatory compliance of the Company’s products (“Safety Notices”)
and (ii) to the Company’s knowledge, there are no facts that would be reasonably
likely to result in (x) a Safety Notice with respect to the Company’s products
or services, (y) a change in labeling of any the Company’s respective products
or services, or (z) a termination or suspension of marketing or testing of any
the Company’s products or services.

 

(r) No Violations or Defaults. Neither the Company nor any of its subsidiaries
is (A) in violation of its respective charter, by-laws or other organizational
documents, or (B) in breach of or otherwise in default, and no event has
occurred which, with notice or lapse of time or both, would constitute such a
default in the performance of any material obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or any other
material contract, lease or other instrument to which it is subject or by which
any of them may be bound, or to which any of the material property or assets of
the Company or any of its subsidiaries is subject, except in the case of clause
(B) as would not reasonably be expected to have a Material Adverse Effect.

 

(s) Taxes. The Company and its subsidiaries have timely filed all material
federal, state, local and foreign income and franchise tax returns required to
be filed and are not in default in the payment of any material taxes which were
payable pursuant to said returns or any assessments with respect thereto, other
than any which the Company or any of its subsidiaries is contesting in good
faith. There is no pending dispute with any taxing authority relating to any of
such returns, and the Company has no knowledge of any proposed liability for any
tax to be imposed upon the properties or assets of the Company for which there
is not an adequate reserve reflected in the Company’s financial statements
included in the SEC Filings.

 

(t) Exchange Listing and Exchange Act Registration. The Common Stock is
registered pursuant to Section 12(b) of the Exchange Act and is included or
approved for listing on the Principal Market and the Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or delisting the Common Stock from the
Principal Market nor has the Company received any notification that the SEC or
the Principal Market is contemplating terminating such registration or listing.
The Company has complied in all material respects with the applicable
requirements of the Principal Market for maintenance of inclusion of the Common
Stock thereon. To the knowledge of the Company, no beneficial owners of the
Company’s capital stock who, together with their associated persons and
affiliates, hold in the aggregate 10% or more of such capital stock, have any
direct or indirect association or affiliate with a FINRA member.

 

 7 

 

 

(u) Ownership of Other Entities. Other than Beyond Air, Ltd. and Advanced
Inhalation Therapies (AIT), Inc., the Company, directly or indirectly, owns no
capital stock or other equity or ownership or proprietary interest in any
corporation, partnership, association, trust or other entity.

 

(v) Internal Controls. The Company and its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management’s general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. Except as disclosed in the SEC Filings, the Company’s internal
control over financial reporting is effective and none of the Company, its board
of directors and audit committee is aware of any “significant deficiencies” or
“material weaknesses” (each as defined by the Public Company Accounting
Oversight Board) in its internal control over financial reporting, or any fraud,
whether or not material, that involves management or other employees of the
Company and its subsidiaries who have a significant role in the Company’s
internal controls; and since the end of the latest audited fiscal year, there
has been no change in the Company’s internal control over financial reporting
(whether or not remediated) that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting. The Company’s board of directors has, subject to the exceptions, cure
periods and the phase in periods specified in the applicable stock exchange
rules (“Exchange Rules”), validly appointed an audit committee to oversee
internal accounting controls whose composition satisfies the applicable
requirements of the Exchange Rules and the Company’s board of directors and/or
the audit committee has adopted a charter that satisfies the requirements of the
Exchange Rules.

 

(w) Reserved.

 

(x) Insurance. The Company and each of its subsidiaries carries, or is covered
by, insurance from reputable insurers in such amounts and covering such risks as
the Company reasonably believes is adequate for the conduct of its business and
the value of its properties and the properties of its subsidiaries and as is
customary for companies engaged in similar businesses in similar industries; all
policies of insurance and any fidelity or surety bonds insuring the Company or
any of its subsidiaries or its business, assets, employees, officers and
directors are in full force and effect; the Company and its subsidiaries are in
compliance with the terms of such policies and instruments in all material
respects; there are no claims by the Company or any of its subsidiaries under
any such policy or instrument as to which any insurance company, to the
Company’s knowledge, is denying liability or defending under a reservation of
rights clause; neither the Company nor any of its subsidiaries has been refused
any insurance coverage sought or applied for; and neither the Company nor any of
its subsidiaries has reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a Material Adverse Effect.

 

(y) Investment Company Act. The Company is not and, after giving effect to the
offering and sale of the Purchase Shares, will not be an “investment company,”
as such term is defined in the Investment Company Act of 1940, as amended.

 

(z) Sarbanes-Oxley Act. The Company is in compliance with all applicable
provisions of the Sarbanes-Oxley Act and the rules and regulations of the SEC
thereunder.

 

(aa) Disclosure Controls. The Company has established and maintains disclosure
controls and procedures (as defined in Rules 13a-14 and 15d-14 under the
Exchange Act) and such controls and procedures are effective in ensuring that
material information relating to the Company, including its subsidiaries, is
made known to the principal executive officer and the principal financial
officer. The Company has utilized such controls and procedures in preparing and
evaluating the disclosures in the SEC Filings.

 

 8 

 

 

(bb) Anti-Bribery and Anti-Money Laundering Laws. Each of the Company, its
subsidiaries, and, to the Company’s knowledge, its affiliates, any of their
respective officers, directors, supervisors, managers, employees, or, the
knowledge of the Company, agents, has not violated, its participation in the
offering will not violate, and the Company and each of its subsidiaries has
instituted and maintains policies and procedures designed to ensure continued
compliance with, each of the following laws: anti-bribery laws, including but
not limited to, any applicable law, rule, or regulation of any locality,
including but not limited to any law, rule, or regulation promulgated to
implement the OECD Convention on Combating Bribery of Foreign Public Officials
in International Business Transactions, signed December 17, 1997, including the
U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.K. Bribery Act
2010, or any other law, rule or regulation of similar purposes and scope, or
anti-money laundering laws, including but not limited to, applicable federal,
state, international, foreign or other laws, regulations or government guidance
regarding anti-money laundering, including, without limitation, Title 18 U.S.
Code Section 1956 and 1957, the Patriot Act, the Bank Secrecy Act, and
international anti-money laundering principles or procedures by an
intergovernmental group or organization, such as the Financial Action Task Force
on Money Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization
continues to concur, all as amended, and any Executive order, directive, or
regulation pursuant to the authority of any of the foregoing, or any orders or
licenses issued thereunder.

 

(cc) OFAC.

 

(A) Neither the Company nor any of its subsidiaries, nor, to the Company’s
knowledge, any of their respective directors, officers or employees, nor, to the
Company’s knowledge, any agent, affiliate or representative of the Company or
its subsidiaries is an individual or entity that is, or is owned or controlled
by an individual or entity that is:

 

(1) the subject of any sanctions administered or enforced by the U.S. Department
of Treasury’s Office of Foreign Assets Control, the United Nations Security
Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions
authority (collectively, “Sanctions”), nor

 

(2) located, organized or resident in a country or territory that is the subject
of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya,
North Korea, Sudan and Syria).

 

(B) Neither the Company nor any of its subsidiaries will, directly or
indirectly, use the proceeds of the offering, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partner or other
individual or entity:

 

(1) to fund or facilitate any activities or business of or with any individual
or entity or in any country or territory that, at the time of such funding or
facilitation, is the subject of Sanctions; or

 

(2) in any other manner that will result in a violation of Sanctions by any
individual or entity.

 

(C) For the past five years, neither the Company nor any of its subsidiaries has
knowingly engaged in, and is not now knowingly engaged in, any dealings or
transactions with any individual or entity, or in any country or territory, that
at the time of the dealing or transaction is or was the subject of Sanctions.

 

(dd) Compliance with Environmental Laws. Except as disclosed in the SEC Filings,
neither the Company nor any of its subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any Governmental Authority or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”), owns or operates any real property
contaminated with any substance that is subject to any Environmental Laws, is
liable for any off-site disposal or contamination pursuant to any Environmental
Laws, or is subject to any claim relating to any Environmental Laws, which
violation, contamination, liability or claim would, individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware of any
pending investigation which might lead to such a claim. Neither the Company nor
any of its subsidiaries anticipates incurring any material capital expenditures
relating to compliance with Environmental Laws.

 

(ee) Compliance with Occupational Laws. The Company and each of its subsidiaries
(A) is in compliance, in all material respects, with any and all applicable
foreign, federal, state and local laws, rules, regulations, treaties, statutes
and codes promulgated by any and all Governmental Authorities (including
pursuant to the Occupational Health and Safety Act) relating to the protection
of human health and safety in the workplace (“Occupational Laws”); (B) has
received all material permits, licenses or other approvals required of it under
applicable Occupational Laws to conduct its business as currently conducted; and
(C) is in compliance, in all material respects, with all terms and conditions of
such permit, license or approval. No action, proceeding, revocation proceeding,
writ, injunction or claim is pending or, to the Company’s knowledge, threatened
against the Company or any of its subsidiaries relating to Occupational Laws,
and the Company does not have knowledge of any facts, circumstances or
developments relating to its operations or cost accounting practices that could
reasonably be expected to form the basis for or give rise to such actions,
suits, investigations or proceedings.

 

 9 

 

 

(ff) ERISA and Employee Benefits Matters. (A) To the knowledge of the Company,
no “prohibited transaction” as defined under Section 406 of ERISA or Section
4975 of the Code and not exempt under ERISA Section 408 and the regulations and
published interpretations thereunder has occurred with respect to any Employee
Benefit Plan. At no time has the Company or any ERISA Affiliate maintained,
sponsored, participated in, contributed to or has or had any liability or
obligation in respect of any Employee Benefit Plan subject to Part 3 of Subtitle
B of Title I of ERISA, Title IV of ERISA, or Section 412 of the Code or any
“multiemployer plan” as defined in Section 3(37) of ERISA or any multiple
employer plan for which the Company or any ERISA Affiliate has incurred or could
incur liability under Section 4063 or 4064 of ERISA. No Employee Benefit Plan
provides or promises, or at any time provided or promised, retiree health, life
insurance, or other retiree welfare benefits except as may be required by the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or similar
state law. Each Employee Benefit Plan is and has been operated in material
compliance with its terms and all applicable laws, including but not limited to
ERISA and the Code and, to the knowledge of the Company, no event has occurred
(including a “reportable event” as such term is defined in Section 4043 of
ERISA) and no condition exists that would subject the Company or any ERISA
Affiliate to any material tax, fine, lien, penalty or liability imposed by
ERISA, the Code or other applicable law. Each Employee Benefit Plan intended to
be qualified under Code Section 401(a) is so qualified and has a favorable
determination or opinion letter from the IRS upon which it can rely, and any
such determination or opinion letter remains in effect and has not been revoked;
to the knowledge of the Company, nothing has occurred since the date of any such
determination or opinion letter that is reasonably likely to adversely affect
such qualification; (B) with respect to each Foreign Benefit Plan, such Foreign
Benefit Plan (1) if intended to qualify for special tax treatment, meets, in all
material respects, the requirements for such treatment, and (2) if required to
be funded, is funded to the extent required by applicable law, and with respect
to all other Foreign Benefit Plans, adequate reserves therefor have been
established on the accounting statements of the applicable Company or
subsidiary; (C) the Company does not have any obligations under any collective
bargaining agreement with any union and no organization efforts are underway
with respect to Company employees. As used in this Agreement, “Code” means the
Internal Revenue Code of 1986, as amended; “Employee Benefit Plan” means any
“employee benefit plan” within the meaning of Section 3(3) of ERISA, including,
without limitation, all stock purchase, stock option, stock-based severance,
employment, change-in-control, medical, disability, fringe benefit, bonus,
incentive, deferred compensation, employee loan and all other employee benefit
plans, agreements, programs, policies or other arrangements, whether or not
subject to ERISA, under which (1) any current or former employee, director or
independent contractor of the Company or its subsidiaries has any present or
future right to benefits and which are contributed to, sponsored by or
maintained by the Company or any of its respective subsidiaries or (2) the
Company or any of its subsidiaries has had or has any present or future
obligation or liability; “ERISA” means the Employee Retirement Income Security
Act of 1974, as amended; “ERISA Affiliate” means any member of the Company’s
controlled group as defined in Code Section 414(b), (c), (m) or (o); and
“Foreign Benefit Plan” means any Employee Benefit Plan established, maintained
or contributed to outside of the United States of America or which covers any
employee working or residing outside of the United States.

 

(gg) Business Arrangements. Except in the ordinary course of business or as
disclosed in the SEC Filings, neither the Company nor any of its subsidiaries
has granted rights to develop, manufacture, produce, assemble, distribute,
license, market or sell its products to any other person and is not bound by any
agreement that affects the exclusive right of the Company or such subsidiary to
develop, manufacture, produce, assemble, distribute, license, market or sell its
products.

 

(hh) Labor Matters. No labor problem or dispute with the employees of the
Company or any of its subsidiaries exists or, to the knowledge of the Company,
is threatened or imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or its subsidiaries’
principal suppliers, contractors or customers that would reasonably be expected
to have a Material Adverse Effect.

 

(ii) Restrictions on Subsidiary Payments to the Company. No subsidiary of the
Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
subsidiary’s capital stock, from repaying to the Company any loans or advances
to such subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other subsidiary of the
Company, except as may be restricted by applicable state law governing
corporations or limited liability companies or as described in or contemplated
by the SEC Filings.

 10 

 

 

4. TRANSFER RESTRICTIONS.

 

(a) Compliance with Laws. Notwithstanding any other provision of this Section 4,
each Buyer covenants that the Purchase Shares may be disposed of only pursuant
to an effective registration statement under, and in compliance with the
requirements of, 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 compliance with any applicable state and federal
securities laws. The Company may require such Buyer to provide to the Company an
opinion of counsel selected by such Buyer 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 Purchase Shares under the Securities Act.

 

(b) Legends. Each Buyer is also aware that a legend will be placed on any
certificate or certificates evidencing the Purchase Shares stating that they
have not been registered under the Securities Act and setting forth or referring
to the restrictions on transfers and sales thereof. The Company will place stop
transfer instructions against the Purchase Shares and the certificates therefor
to restrict the transfer thereof, except as may be prescribed by the Securities
Act.

 

(c) Offers and Sales. The Buyer will not offer or sell the Purchase Shares
(which term shall include any prearrangement for a purchase by a U.S. person or
other person in the U.S.) directly or indirectly, in the United States or to any
natural person who is a resident of the United States or to any other “U.S.
person” (as defined below) or for the account or benefit of any “U.S. person”
(other than a “distributor”, as defined in Regulation S) unless registered under
the Securities Act and all applicable state laws or an exemption from the
registration requirements of the Securities Act and similar state laws is
available. The Buyer will not engage in hedging transactions with regard to the
Shares unless in compliance with the Securities Act.

 

5. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL SHARES OF COMMON STOCK UNDER
THIS AGREEMENT.

 

The obligation of the Company hereunder to sell the Purchase Shares is subject
to the satisfaction of each of the following conditions on or before the Closing
Date:

 

(a) The Buyers shall have executed this Agreement and delivered the same to the
Company; and

 

(b) The representations and warranties of the Buyers in this Agreement shall be
true and correct as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which shall be
true and correct in all material respects as of such specific date) and the
Buyers shall have performed, satisfied and complied in all material respects
with the covenants and agreements required by this Agreement to be performed,
satisfied or complied with by the Buyers at or prior to the Closing Date.

 

(c) The Company shall have issued and sold the shares in the Public Offering as
contemplated by the Underwriting Agreement.

 

6. CONDITIONS TO THE BUYERS’ OBLIGATIONS TO PURCHASE SHARES OF COMMON STOCK.

 

The obligation of each Buyer to buy Purchase Shares under this Agreement is
subject to the satisfaction of each of the following conditions on or before the
Closing Date:

 

(a) The Company shall have executed this Agreement and delivered the same to the
Buyer;

 

(b) The representations and warranties of the Company in this Agreement shall be
true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such representations and warranties shall be true and
correct without further qualification) as of the date of this Agreement and as
of the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date, which shall be true and correct in
all material respects as of such specific date), the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date and no Material
Adverse Effect shall have occurred.

 

(c) The SEC shall not have issued a stop order with respect to the Common Stock
and the Common Stock shall not have been suspended, as of the Closing Date, by
the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of the Closing Date,
either (i) in writing by the SEC or the Principal Market or (ii) by falling
below the minimum listing maintenance requirements of the Principal Market;

 

 11 

 

 

(d) The Company shall have delivered to its transfer agent irrevocable written
instructions to issue to such Buyer book-entry notations representing the
Purchase Shares set forth opposite such Buyer’s name on the Schedule of Buyers
attached hereto as Exhibit A; and

 

(e) The Company shall have issued and sold the shares in the Public Offering as
contemplated by the Underwriting Agreement.

 

7. CERTAIN DEFINED TERMS.

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

(a) “Affiliate” means, with respect to a specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Person specified.

 

(b) “Business Day” means any day on which the Principal Market is open for
trading during normal trading hours (i.e., 9:30 a.m. to 4:00 p.m. Eastern Time),
including any day on which the Principal Market is open for trading for a period
of time less than the customary time.

 

(c) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(d) “Offering Price” means the public offering price per share of the Common
Stock to be issued and sold in the Public Offering, as set forth on the cover
page of the Public Offering Prospectus.

 

(e) “Person” means an individual or entity including any limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

 

(f) “Principal Market” means the Nasdaq Capital Market; provided however, that
in the event the Company’s Common Stock is ever listed or traded on the New York
Stock Exchange, the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global
Market, the Nasdaq Capital Market, the OTC Bulletin Board or either of the OTCQB
Marketplace or the OTCQX marketplace of the OTC Markets Group, then the
“Principal Market” shall mean such other market or exchange on which the
Company’s Common Stock is then listed or traded.

 

(g) “Public Offering Prospectus” means the final prospectus supplement to the
Registration Statement filed by the Company with the SEC in connection with the
Public Offering.

 

(i) “SEC” means the United States Securities and Exchange Commission.

 

(j) “SEC Filings” shall mean all reports, schedules, forms, statements and other
documents filed or required to be filed by the Company with the SEC pursuant to
the requirements of the Securities Act or the Exchange Act, including material
filed pursuant to Section 13(a) or 15(c) of the Exchange Act, in each case,
together with all exhibits, supplements, amendments and schedules thereto, and
all documents incorporated by reference therein.

 

(k) “Securities Act” means the Securities Act of 1933, as amended.

 

8. MISCELLANEOUS.

 

(a) Governing Law; Jury Trial. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. The Company (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) and each of the Buyers hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby

 

(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile or pdf (or other
electronic reproduction) signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile or pdf (or other electronic
reproduction) signature.

 

(c) Headings. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.

 

(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

 12 

 

 

(e) Entire Agreement. This Agreement supersedes all other prior oral or written
agreements between the Buyers, the Company, their Affiliates and Persons acting
on their behalf with respect to the matters discussed herein, and this Agreement
and the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor any of the
Buyers makes any representation, warranty, covenant or undertaking with respect
to such matters. Each of the Company and each of the Buyers acknowledge and
agree that it has not relied on, in any manner whatsoever, any representations
or statements, written or oral, other than as expressly set forth in this
Agreement.

 

(f) Notices. Any notices, consents or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
(iii) upon receipt, when sent by electronic message (provided the recipient
responds to the message and confirmation of both electronic messages are kept on
file by the sending party); or (iv) one (1) Business Day after timely deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

 

If to the Company:

 

Beyond Air, Inc.

825 East Gate Boulevard, Suite 320

Garden City, NY 11530

 

If to any of the Buyers, to the address set forth opposite such Buyer’s name on
EXHIBIT A hereto:

 

or at such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party at least one (1) Business Day prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine containing the time, date, and
recipient facsimile number, (C) electronically generated by the sender’s
electronic mail containing the time, date and recipient email address or (D)
provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of receipt in accordance with clause (i), (ii), (iii) or
(iv) above, respectively.

 

(g) Reserved.

 

(h) No Third-Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person, except that the Placement Agent is a third party beneficiary of the
representations and warranties of each of the Buyers and the Company set forth
herein.

 

(h) Publicity. The Company shall not be required to provide the Buyers with
advance notice of any press release, SEC filing or any other public disclosure
by or on behalf of the Company relating to the Buyers, their purchases hereunder
or any aspect of the Purchase Shares, the Agreement or the transactions
contemplated hereby.

 

(i) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

(j) Survival. The representations, warranties, agreements and covenants
contained herein shall survive the closing of the transactions contemplated
hereby and the delivery of the Purchase Shares.

 

(k) Termination. In the event that the Closing Date shall not have occurred
within twenty (20) Business Days of the date of this Agreement, due to the
failure to satisfy any of the conditions set forth in Sections 5 and 6 above,
either party shall have the option to terminate this Agreement at the close of
business on such date or thereafter without liability of either party to any
other party; provided, however, that the right to terminate this Agreement under
this Section 8(k) shall not be available to either party if such failure to
satisfy any of the conditions set forth in Sections 5 and 6 is the result of a
breach of this Agreement by such party or the failure of any representation or
warranty of such party included in this Agreement to be true and correct in all
material respects.

 

(l) No Financial Advisor, Placement Agent, Broker or Finder. The Company
represents and warrants to the Buyers that it has not engaged any financial
advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby, other than SunTrust Robinson Humphrey, Inc. and certain
other parties (collectively, the “Placement Agent”) to whom it will pay an
aggregate cash fee equal to 7% of the gross proceeds from the sale of the
Purchase Shares. Each of the Buyers represents and warrants to the Company that
it has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby. Each party shall be
responsible for the payment of any fees or commissions, if any, of any financial
advisor, placement agent, broker or finder engaged by such party relating to or
arising out of the transactions contemplated hereby. Each party shall pay, and
hold the other party harmless against, any liability, loss or expense
(including, without limitation, attorneys’ fees and out of pocket expenses)
arising in connection with any such claim.

 

(m) Amendment and Waiver; Failure or Indulgence Not Waiver. No provision of this
Agreement may be amended other than by a written instrument signed by the
Company and the Buyers obligated to purchase at least a majority of the Purchase
Shares. No provision of this Agreement may be waived other than in a written
instrument signed by the party against whom enforcement of such waiver is
sought. No failure or delay in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

 

*   *   *   *   *

 

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IN WITNESS WHEREOF, the Buyers and the Company have caused this Common Stock
Purchase Agreement to be duly executed as of the date first written above.

 

  THE COMPANY:       BEYOND AIR, INC.         By:                          
Name:     Title:  

 

  BUYER:         [_____]         By:         By:                    Name:  

 

  BUYER:         [______]         By:           By:                   Name:    
Title:  

 

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EXHIBIT A

 

SCHEDULE OF BUYERS

 

Name   Address for Notices   Jurisdiction of Formation and Entity Type  
Purchase
Price   Number of Shares of Common Stock Purchased   TOTAL           $     

 

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EXHIBIT B

 

RISK FACTORS

 

Antidilution provisions in certain of our outstanding warrants may affect the
interests of our common stockholders.

 

The warrants we issued in our January 2017 and March 2017 financing
transactions, or the 2017 Warrants, contain price protection provisions that
could be triggered by our issuance of common stock in the future, including in
connection with this offering, if the offering price for any such future
issuance is less than the then-applicable warrant exercise price. The 2017
Warrants had an original exercise price of $6.90 per share. As a result of our
February 2018 financing transaction, we adjusted the exercise price down to
$4.25 per share pursuant to the terms of the 2017 Warrants. As of the date of
this prospectus supplement, there are 3,635,270 2017 Warrants outstanding at a
current exercise price of $4.25 per share.

 

On March 16, 2018, Empery Asset Master, Ltd. (“Empery Master”), Empery Tax
Efficient, LP (“Empery I) and Empery Tax Efficient II, LP (“Empery II),
(collectively, “Empery”), filed a complaint in the Supreme Court of the State of
New York, relating to the notice of adjustment of both the exercise price of and
the number of warrant shares issuable under warrants issued to Empery in January
2017. Empery alleges that, as a result of certain circumstances in connection
with the February 2018 financing transaction, the 166,672 warrants issued to
Empery in January 2017 provide for adjustments to both the exercise price of the
warrants and the number of warrant shares issuable upon such exercise. While we
believe that we complied with the applicable protective features of the 2017
Warrants and properly adjusted the exercise price, if Empery were to prevail on
all claims in their action against us, the new adjusted total number of warrant
shares would be as follows: 319,967 warrant shares for Empery Master, 159,869
warrant shares for Empery I and 252,672 warrant shares for Empery II and the
exercise price could be reduced from $4.25 to $1.57 per share. We believe that
Empery’s claims have no merit and we shall continue to vigorously defend such
lawsuit.

 

In addition to Empery, there are 1,139,220 warrants outstanding held by
investors in the 2017 Warrants who did not participate in the February 2018
financing transaction. Any further adjustments to these 2017 Warrants pursuant
to the antidilution provisions may result in additional dilution to the
interests of our stockholders and may adversely affect the market price of our
common stock. The antidilution provisions may also limit our ability to obtain
additional financing on terms favorable to us.

 

 16