Exhibit 4.38


 


THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED, INCLUDING UNDER THE SECURITIES
ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT, AND (2) SUBJECT TO THE PROVISIONS OF ANY OTHER APPLICABLE LAW AND OF THE THEN CURRENT BY-LAWS AND CERTIFICATE
OF INCORPORATION OF THE COMPANY.


 


CONVERTIBLE PROMISSORY NOTE


 


	$512,272 (the “Loan Amount”)	April 1, 2021




 


	8% Annual Interest	(the “Note Date”)




 


THIS NOTE is issued pursuant
to the terms of that certain Amended and Restated Equity Interest Purchase and Reorganization Agreement (“Purchase Agreement”),
by and among Marpai, Inc., a Delaware corporation (“Company”), Marpai Health, Inc., a Delaware corporation (“Marpai
Health”), the stockholders and certain holders of convertible notes of Marpai Health, including the undersigned lender (“Lender”),
Continental Benefits, LLC, a Florida limited liability company, and WellEnterprises USA, LLC, a Florida limited liability company and,
solely for the purposes set forth in Section 13.15 of the Purchase Agreement, HillCour, Inc., a Florida corporation, as well as
that certain Note Exchange Agreement, dated as of the Note Date, between the Company, the Lender and certain other holders of Marpai Health
convertible notes.


 


FOR VALUE RECEIVED, the Company
hereby promises to pay to the order of the Lender, the principal sum of the Loan Amount, together with interest thereon. This Note shall
bear a simple interest rate of eight percent (8%) per annum based on a 365-day year. The obligation to pay interest on this Note shall
be cumulative. This Note is issued to Lender pursuant to Sections 1.1 and 2.3.2(c) of the Purchase Agreement, in full satisfaction and
repayment of principal and interest owed to Lender under that certain Convertible Promissory Note, dated December 4, 2020, issued by Marpai
Health, the Company’s wholly owned subsidiary (upon the consummation of the transactions contemplated by the Purchase Agreement,
in favor of Lender (the “Marpai Health Note”). In consideration of the Company’s issuance of this Note, the Lender
agrees that the Marpai Health’s obligations to Lender under the Marpai Health Note are deemed fully satisfied and discharged, and
no further sums shall be owed to Lender under such Marpai Health Note, which Lender has returned to Marpai Health concurrently herewith
for cancellation.


 


1.            
Maturity Date. If not otherwise converted pursuant to Section 3, the outstanding principal balance and unpaid accrued interest
on this Note shall be due two (2) years from the Note Date (the “Maturity Date”) or prior thereto upon the Lender’s
first written request following an Event of Default of the Company. The Maturity Date may be extended upon mutual consent of the Company
and the Lender.


 


2.           
Note Repayment. All repayments shall be made in lawful money of the United States of America by wire transfer to a bank
account to be designated by the Lender. All Notes issued pursuant to the Purchase Agreement, and any other Note outstanding as of the
date hereof, shall rank equally without preference or priority of any kind with respect to one another, and all payments with respect
to any of the Notes that have not been converted shall be applied ratably in proportion to the Loan Amounts represented thereby. The Company
shall be entitled to repay all or any portion of the principal or accrued interest outstanding under the Notes upon prior written notice
to the Lender.


 






     


     


    

 


3.            
Conversion.


 


3.1             
 Automatic Conversion upon Initial Public Offering. If, on or after the date hereof
and prior to the earlier of the Maturity Date or the full repayment or conversion of the Notes, the Company (or a successor entity) closes
an underwritten public offering of its common stock (an “IPO”), then the entire principal amount of this Note and accrued
interest (calculated through the date that is ten (10) days prior to the closing of the IPO) will be converted automatically, without
the need for any action on the part of Company or the Lender, into unregistered shares of common stock of the Company (or successor entity,
as applicable) concurrently with the closing of the IPO. The number of shares of common stock issuable upon conversion of this Note will
be calculated by dividing the total of the principal amount of and accrued interest on this Note (calculated through the date set forth
above in this Section 3.1) then outstanding by 70% of the per share public offering price stated on the front cover of the final prospectus
for the IPO (before deduction of any underwriting commissions, expenses or other amounts). The Company will give the Lender notice of
the intended closing of an IPO, including the public offering price, provided that the failure to give such notice will not affect the
automatic conversion of this Note. In order to receive certificates representing the common stock, the Lender must cause the original
of this Note to be delivered to the Company, or if lost, stolen or destroyed, an affidavit and, if reasonably requested by the Company,
a reasonable indemnity as to the lost, stolen or destroyed original of this Note. Then, the Company (or successor entity) will cause one
or more stock certificates evidencing the Lender’s ownership of the number of conversion shares into which the principal amount
of, and interest accrued on, this Note has been converted to be delivered promptly to the Lender or as directed by the Lender. From and
after the IPO, this Note will represent only the right to receive shares of common stock (or shares of a successor entity’s common
stock). 


 


3.2              
Automatic Conversion upon Qualified Financing. Notwithstanding the foregoing, at the closing of the Qualified Financing
(as hereinafter defined), the outstanding principal balance and unpaid accrued interest on this Note shall be automatically converted
into the most senior class of shares of the Company issued in such Qualified Financing (the “Shares”) at a price per
share equal to the lower of: (i) 70% of the original price per unit of such Shares on a fully diluted basis (in or (ii) a maximum company
pre-money valuation of Thirty-Five Million Dollars (US$35,000,000) each case, the “Conversion Price”). The exact number
of Shares to be issued to Lender upon conversion will be equal to the aggregate outstanding principal and unpaid accrued interest due
on this Note, divided by the Conversion Price. The issuance of such shares upon conversion of this Note shall be contingent upon execution
and delivery by the Lender of the agreements executed and delivered by investors in the Qualified Financing. The Lender shall thereupon
receive all of the rights, preferences and privileges granted to other investors in the Qualified Financing, including but not limited
to any registration and piggyback rights. “Qualified Financing” shall mean the next transaction or series of related
transactions, other than an IPO, following the date of the Purchase Agreement in which the Company issues and sells Shares to investors,
which may be existing stockholders of the Company, with gross proceeds to the Company of at least two million dollars (US$2,000,000),
excluding the conversion of Notes.


 


3.3              
Discretionary Conversion. Unless otherwise automatically converted upon an IPO or in a Qualified Financing, at any time
prior to the Maturity Date (or any time after the Maturity Date with the consent of the Company and including prior to a Change of Control
that occurs before a Qualified Financing or IPO) the Lender shall be entitled, by written notice to the Company, to convert the outstanding
principal balance and unpaid accrued interest on this Note, in whole or in part, into the most senior class of stock of the Company then
outstanding, at a conversion price based upon a maximum company pre-money valuation of Thirty-Five Million Dollars (US$35,000,000) on
a fully diluted basis. The shares issued upon said conversion shall have all preferential and associated rights with said class and given
to the investors in the applicable round of financing, and shall be identical in all terms except for said price. Any election to convert
the Note pursuant to this Section 3.3 will be made in writing and delivered to the Company.


 






     


     


    

 


3.4               Repayment
Upon Change of Control. In the event the Company consummates a Change of Control (as defined below) prior to the Maturity Date
and prior to the conversion or repayment of this Note, then this Note shall become due and payable upon the date of consummation of
such Change of Control (and following the Company’s receipt of proceeds from a Change of Control) in an amount equal to the
greater of: (i) one and one half times (1.5x) the Loan Amount, plus any accrued and unpaid interest; or (ii) the net proceeds to be
received by Lender if Lender had converted this Note based on a price per share based on a pre-money valuation of the Company equal
to $35,000,000, as calculated on a fully diluted basis, immediately prior to the Change of Control. The Company will notify Lender
in writing of a Change of Control at least five (5) days before the anticipated closing of such Change of Control. A
 “Change of Control” means the sale, conveyance, exclusive license outside of the ordinary course of business, or
other disposition of all or substantially all of the Company’s property or business, the Company’s merger with or into
or consolidation with any other corporation, limited liability company or other entity (other than a wholly owned subsidiary of the
Company) if the holders of the voting securities of the Company that are outstanding immediately prior to the consummation of such
consolidation or merger do not, immediately after the consummation of such consolidation or merger, hold voting securities that
collectively possess at least a majority of the voting power of all the outstanding securities of the surviving entity of such
consolidation or merger or such surviving entity’s parent entity or the sale or disposition of a majority of the voting
securities of the Company; provided that the term “Change of Control” shall not include (a) a merger or reorganization
of the Company effected exclusively for the purpose of changing the domicile of the Company or tax-free reorganization or (b) an
equity financing in which the Company is the surviving corporation, including but not limited to the IPO.


 


4.           
Unsecured Obligation. The Lender hereby acknowledges and agrees that the obligations of the Company hereunder (including,
without limitation, in respect of repayment of the Loan Amount and the accrued but unpaid interest thereon) shall be an unsecured obligation
of the Company in all respects.


 


5.           
Governing Law; Venue. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York without regard to the conflict
of law provisions. The competent courts of the State of New York shall have exclusive jurisdiction to resolve all disputes arising from
or in connection with this Note or the Purchase Agreement.


 


6.           
Transfer; Successors and Assigns. The Lender may not sell, assign, pledge, dispose of or otherwise transfer (collectively,
 “Transfer”) this Note, unless the Lender obtains the Company’s prior written approval (such approval to be provided
in the Company’s sole and absolute discretion).


 


7.            
Notices. The notice provision of the Purchase Agreement shall apply to this Note.


 


8.           
Amendments, Modifications. Any amendment or modification of this Note shall require the prior written consent of the Company
and the Lender.


 


9.           
Miscellaneous. The Company hereby expressly waives presentment, demand for payment, dishonor, notice of dishonor, protest,
notice of protest and any other formality.


 


10.          
Stock Reclassifications; Stock Splits, Combinations and Dividends. If the Shares issuable upon the conversion of this Note
shall be changed into the same or different number of Shares of any class or classes of stock, whether by reclassification, stock split,
stock dividend, or similar event, then and in each such event, the Lender, shall have the right thereafter to convert all or any portion
of this Note into the kind and amount of Shares and property receivable upon such capital reorganization, reclassification or other change
which the Lender would have received had this Note been converted immediately prior to such capital reorganization, reclassification or
other change.


 






     


     


    

 


11.        
 Adjustments. The Company will make an appropriate adjustment to the number of Shares issuable upon conversion and/or the
Conversion Price thereof upon any stock split, combination, dividend, distribution, recapitalization, reorganization, or similar event
affecting the Company’s capital stock other than cash dividends paid or payable from retained earnings (collectively, a "Stock
Event"), so that the Lender will receive, upon conversion, all Shares, dividends, rights and benefits to which the Lender would
have been entitled had Lender converted this Note prior to such Stock Event. The form of this Note need not be changed by reason of any
such adjustment. Any successor entity to the Company will execute and deliver to the Lender a supplement hereto acknowledging such entity's
obligations under this Note. The Company will make adjustments as soon as practicable following any Stock Event, and immediately thereafter
give notice to the Lender of all facts and calculations associated with such adjustment. Stock Event adjustments may be waived by the
Lender, in its sole and absolute discretion.


 


12.          
Default. If there shall be any Event of Default (as defined below) hereunder, at the option and upon the declaration of
the Lender of this Note and upon written notice to the Company (which election and notice shall not be required in the case of an Event
of Default under Section 12(b) or 12(c)), this Note shall accelerate and all Loan Amount and unpaid accrued interest shall become due,
payable and collectible. The occurrence of any one or more of the following shall constitute an “Event of Default”
hereunder:


 


(a)            
The Company fails to pay timely any of the Loan Amount due under this Note on the date the same becomes due and payable or any
accrued interest or other amounts due under this Note on the date the same becomes due and payable or within five (5) business days thereafter;


 


(b)            
The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other
law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes
any corporate action in furtherance of any of the foregoing; or


 


(c)            
An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within sixty (60) days) under
any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other
similar official) is appointed to take possession, custody or control of any property of the Company and is not removed within sixty (60)
days from the date of such appointment.


 


(d)            
If the Company shall admit in writing to its inability to pay its debts as they mature and Lender has elected to not convert this
Note.


 


(e)            
If a judgment creditor shall file or commence any levy of attachment, execution or other similar process against the assets of
the Company valued in excess of $100,000 which potential loss is not covered by insurance or which proceeding is not being contested in
good faith by the Company, provided however, that such event shall not be an Event of Default if the Company cures such event within sixty
(60) days after receiving notice of the Event of Default contemplated under this subsection.


 


(f)             
If the Company commits fraud at any time in connection with this Note.


 






     


     


    

 


13.           Default
Remedies.




 


(a)            If
an Event of Default (other than an insolvency Event of Default) has occurred and is continuing, the Lender, by notice to the
Company, may declare the Loan Amount of this Note and all accrued interest thereon to be immediately due and payable, and upon any
such declaration, such Loan Amount and accrued interest shall thereupon become due and payable immediately within five (5) business
days from the Lender’s written request. In the event the Company fails to pay all outstanding Amounts within this five (5)
business day period, the interest rate on the unpaid and outstanding Loan Amount of this Note shall be increased to, and this Note
shall bear interest at, a monthly rate equal to one and a half percent (1.5%) or to the maximum rate permitted by law (the
 "Default Rate") from the expiration of the five (5) business day period until such unpaid and outstanding Loan
Amount of this Note is repaid in full. If an insolvency Event of Default has occurred, the Loan Amount of this Note and accrued
Interest thereon will become immediately due and payable without any declaration or any act on the part of any Lender. Such
declaration of acceleration may be rescinded and past defaults may be waived by the Lender.


 


(b)            No course of dealing
or delay or failure on the part of the Lender to exercise any right under this Section shall operate as a waiver of such right or otherwise
prejudice the Lender’s rights, powers and remedies. The Company will pay or reimburse the Lender, to the extent permitted by law,
for all reasonable costs and expenses, including but not limited to reasonable attorneys’ fees, incurred by the Lender in collecting
any sums due on this Note or in otherwise enforcing any of the Lender's rights hereunder.


 


(c)            No right or remedy
herein conferred upon the Lender is intended to be exclusive of any other right or remedy contained herein or existing at law, in equity,
by statute or otherwise, and every such right or remedy shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law, in equity, by statute or otherwise.


 


14.           Indemnity.
The Company agrees to indemnify and hold the Lender harmless from and against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses of any kind and nature whatsoever (including attorneys' fees and disbursements and other costs of investigation
or defense) that may be instituted or asserted against or incurred by the Lender as the result of credit having been extended, suspended
or terminated under this Note or with respect to the execution, delivery, enforcement, performance and administration of, or in any other
way arising out of or relating to, this Note or the transactions referred to herein and any actions or omissions with respect to any
of the foregoing, except to the extent that the Lender is finally determined by a court of competent jurisdiction to have resulted solely
from the gross negligence or willful misconduct of the Lender.


 


15.          Replacement
of Note. If the Lender of record loses this Note, the Company shall issue an identical replacement Note to the Lender upon the Lender’s
delivery to the Company of an executed lost note affidavit stating the facts surrounding such loss of this Note and an executed indemnity
agreement indemnifying and holding harmless the Company against any losses incurred or liabilities suffered by the Company or claims
against the Company by any other holders or transferees of this Note related to or from the issuance of the replacement Note by the Company,
which lost note affidavit and indemnity agreement shall be in a form reasonably satisfactory to the Company.


 


16.           Reinstatement.
This Note shall continue to be effective, or be reinstated, as applicable, if at any time payment of all or any part hereof is rescinded
or must otherwise be returned or restored by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company, as though such payments had not been made.


 






     


     


    

 


17.           Additional
Covenants. Until this Note is paid in full, the Company shall not without the prior written consent of the Lenders holding a
majority in interest of the Loan Amount. (such consent which shall not be unreasonably delayed, withheld, or conditioned): (i) issue
any securities other than strictly pursuant to a Qualified Financing, IPO or pursuant to a duly adopted Stock Incentive Plan; (ii)
incur or agree to incur any indebtedness that is senior to this Note (except for the SQN Note as hereinafter defined) ; (iii) make
any loans to, or assume or guarantee any debt or other obligations of another person or entity in excess of $10,000; ; (iv) enter
into or modify any affiliated party transaction or pay current officers and directors in excess of that which has previously been
disclosed in writing to the Lender; (v) place any liens or encumbrances on, or cause any liens or encumbrances to be placed on, or
transfer, convey, assign, pledge or grant any security interests in, the capital stock or assets or properties of the Company other
than those liens that may be granted to SQN under the SQN Note; or (vi) declare or pay any dividends or distributions on its capital
stock until this Note is paid in full.


 


18.           Financial
Statements. So long as this Note is outstanding, the Company shall furnish to the Lender:


 


(a)                Monthly
Reports. Within thirty (30) days following the end of each fiscal month of the Company, a copy of the consolidated and consolidating
balance sheet, income statement and statement of cash flow (the "Financial Statements") of the Company and its subsidiaries,
internally prepared for such fiscal month in accordance with generally accepted accounting principles in the United States, consistently
applied, setting forth in comparative form the corresponding figures for that date and period, accompanied by a certificate executed by
the Chief Executive Officer or Chief Financial Offer of the Company certifying that (i) such Financial Statements are complete, true and
correct and (ii) to his or her actual knowledge, the Company is not in default of any of its covenants made hereunder.


 


(b)            Annual Reports.
Within ninety (90) days following the close of each fiscal year of the Company, the Financial Statements for such fiscal year certified
by an officer of the Company without qualification in reasonable detail, setting forth in comparative form the corresponding figures for
the corresponding date and period in the preceding fiscal year, and accompanied by other detailed reports from such accountants to the
Company (including, without limitation, any management letters) in connection with each annual or interim audit or review of the books
of the Company by such accountants. In the event the Board of Directors of the Company approves the annual Financial Statements to be
audited, the Lender shall be provided with Financial Statements audited by an independent certified public accounting firm reasonably
acceptable to the Lender.


 


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Left Blank]


 






     


     


    

 


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


 








	 	THE
    COMPANY:
	 	 
	 	MARPAI,
    INC.
	 	 
	 	By: 	/s/ Edmundo Gonzalez
	 	Name:  	Edmundo Gonzalez
	 	Title: 	President & Secretary




 


Approved and Agreed:


 


	 	 
	THE
    LENDER:	 
	 	 
	HILLCOUR INVESTMENT FUND, LLC	 
	 	 
	By: 	/s/ Damien Lamendola	 
	Name:  	Damien Lamendola	 
	Title:	Manager	 




 


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