Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made as of May 18, 2020, by and between ScoutCam Inc., a
Nevada corporation (the “Company”) and the entity listed in Exhibit A attached hereto (the “Investor”).


 


WHEREAS,
the Company desires to issue and sell to the Investor, and the Investor desires to purchase from the Company, upon the terms and
conditions stated in this Agreement, for an aggregate purchase price of US$2.0 million (the “Purchase Price”),
2,066,116 units (the “Units”), each Unit consists of (i) two shares of the Company’s common stock, par
value US$0.001 per share (the “Common Stock” and the “Purchased Shares”, respectively);
and (ii) (a) one warrant to purchase one share of Common Stock with an exercise price of $0.595 (“Warrant A”),
and (b) two warrants, each to purchase one share of Common Stock with an exercise price of $0.893 (“Warrant B”),
in the forms attached hereto as Appendixes A and B, respectively (collectively the “Warrants”, and together
with the Purchased Shares, the “Purchased Securities”), on the terms and conditions set forth in the Warrants;


 


WHEREAS,
as a condition to the consummation of the transactions contemplated by this Agreement, the parties have agreed to the appointment
of a representative of the Investor to the board of directors of the Company (the “Board”);


 


WHEREAS,
the Company and the Investor desire to enter into a Registration Rights Agreement, substantially in the form of Appendix C
annexed hereto and made a part hereof (the “Registration Rights Agreement”), pursuant to which, among other
things, the Company will agree to provide certain registration rights to the Investor with respect to the Purchased Securities
issued under the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations promulgated
thereunder, and applicable state securities laws;


 


WHEREAS,
the Company, the Investor and Medigus Ltd., an Israeli company (“Medigus”), desire to enter into a Voting Agreement,
substantially in the form of Appendix D annexed hereto and made a part hereof (the “Voting Agreement”),
pursuant to which, among other things, the Investor and Medigus have agreed to vote their respective shares of Common Stock, subject
to certain limitations described therein, in favor of the election of the opposite party’s designated representative(s),
as applicable, to the Board; and


 


WHEREAS,
the Investor desires to purchase and the Company desires to issue and sell to the Investor the Purchased Securities pursuant to
the terms and conditions more fully set forth in this Agreement.


 


NOW,
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:


 


1.
PURCHASE AND SALE OF SECURITIES.


 


1.1
Sale and Issuance of Securities. Subject to the satisfaction of certain closing conditions set forth in Sections 4 and
5 hereof at the Closing (as defined below), the Company shall issue and sell to the Investor, and the Investor shall purchase
from the Company an aggregate of 2,066,116 Units, at a purchase price of US$0.968 per each Unit, consisting of the Purchased Shares
and Warrants listed in Exhibit A attached hereto.


 


1.2
The capitalization table of the Company, reflecting the issued and outstanding share capital of the Company on a fully diluted
basis, (i) immediately prior to the Closing and (ii) immediately following the Closing, assuming the investment of the Purchase
Price, is annexed hereto as Appendix E (the “Capitalization Table”).


 


1.3
Closing. The consummation of the transactions contemplated hereby, including the purchase and sale of the Purchased Securities
(the “Closing”) shall take place remotely via the exchange of documents and signatures, on May 18, 2020, or
at such other time and place as the Company and the Investor mutually agree upon (such designated time and place, the “Closing
Date”). The Closing shall be subject to the conditions of Section 4 and 5 below, which conditions shall be deemed to
take place simultaneously and no transaction described in such sections shall be deemed to have been completed or any document
delivered until all such transactions have been completed and all such required documents delivered.


 


1.4
Closing Deliverables.


 


(a)
At the Closing, the Company shall deliver to the Investor:


 




    	 



     


    

 


(i)
True and correct copies of written resolutions, or minutes of a meeting, of the Board, approving and adopting in all respects
the execution, delivery and performance by the Company of this Agreement and the transactions contemplated hereby, including,
among others, (a) authorizing the issuance and sale of the Purchased Securities against payment of the Purchase Price therefor;
(b) approving the appointment of that certain representative of the Investor to the Board pursuant to Section ‎4.4
below; and (c) approving the execution, delivery and performance by the Company of all agreements contemplated herein to which
the Company is party and any agreements, instruments or documents ancillary thereto;


 


(ii)
Duly executed stock certificates or book-entry confirmations representing the Purchased Shares issued to the Investor at the Closing,
in the name of the Investor;


 


(iii)
The Warrants issued to the Investor at the Closing in the name of the Investor, duly executed by the Company; and


 


(iv)
A certificate duly executed by an executive officer of the Company as of the Closing stating that the conditions specified in
Section ‎4 have been satisfied, in the form attached hereto as Schedule ‎1.4(a)(iv).


 


1.5
Purchase Price. At the Closing, the Investor shall transfer to the Company the Purchase Price by wire transfer of immediately
available funds according to the wire instructions attached hereto as Schedule 1.5.


 


2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.


 


The
Company hereby represents and warrants to the Investor that the following representations are true, correct and complete as of
the date hereof and as of the Closing (as if made on the Closing Date); except, in each case, as to such representations and warranties
that address matters as of a particular date, which are true, correct and complete only as of such date.


 


2.1
Subsidiary. The Company wholly-owns ScoutCam Ltd., an Israeli company (the “Subsidiary”), and as of
the date of the Agreement, the Subsidiary is the only direct or indirect subsidiary of the Company. The Company owns, directly
or indirectly, all of the capital stock or other equity interests of the Subsidiary free and clear of any lien, charge, claim,
pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction, and all of the issued and
outstanding share capital of the Subsidiary is validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities.


 


2.2
Organization. The Company and the Subsidiary are each an entity duly incorporated or otherwise organized, validly existing
and in good standing (if applicable in such jurisdiction) under the laws of the jurisdiction of its incorporation or organization,
with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted
or proposed to be conducted in the SEC Reports. Neither the Company nor the Subsidiary is in violation nor default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each
of the Company and the Subsidiary is duly qualified to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material
adverse effect on the results of operations, assets, business, prospects, properties or condition (financial or otherwise) of
the Company and the Subsidiary, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform
in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”), and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or qualification.


 


2.3
Capitalization.


 


(a)
The authorized share capital of the Company will consists of 75,000,000 on or immediately prior to the Closing, as set forth in
the Company’s Articles of Incorporation (the “Articles”), and 32,976,657 shares of Common Stock, as set
forth in the Capitalization Table, shall be (immediately following the Closing) issued and outstanding. There are no other shares
of any other class or series of capital stock of the Company authorized, issued or outstanding.


 




    	 



     


    

 


(b)
The Company has no capital stock reserved for issuance, except that, the Board has reserved (i) 5,804,895 shares of Common Stock
for issuance of, and grant of options or other equity awards exercisable into, Common Stock to directors, officers, employees,
consultants and service providers of the Company or the Subsidiary, under the 2020 Stock Incentive Plan of the Company, (ii) immediately
following the Closing, 19,377,546 shares of Common Stock for issuance upon exercise of outstanding warrants listed in the Capitalization
Table and (iii) 2,688,492 shares of Common Stock issuable to Medigus upon the achievement of certain earnout targets, pursuant
to that certain Securities Exchange Agreement by and between the Company and Medigus, dated September 16, 2019.


 


(c)
The issued and outstanding shares of the Company are duly and validly authorized and issued, fully paid and non-assessable, and
were offered and issued in compliance with the provisions of the Articles as in effect at the time of each such issuance and in
compliance with all applicable corporate and securities laws.


 


(d)
Immediately prior to the Closing, no shares, options, warrants, rights (including conversion, preemptive rights, rights of first
refusal or similar rights), commitments, agreements, understandings or arrangements, relating to the issued or unissued capital
stock of the Company or any securities convertible into or exchangeable for stock or equity interest of the Company, including
rights to subscribe for or purchase from the Company of any of its share capital or other equity interest, or any securities convertible
into or exchangeable for stock of the Company or other equity interest, shall be outstanding or otherwise existing, other than
as set forth in the Capitalization Table, or that could require or obligate the Company to issue, sell, transfer, redeem, purchase,
repurchase, acquire or otherwise cause to be outstanding, any of the Company’s share capital or equity interest or securities
convertible or exercisable into shares or equity interest thereof, or obligations of the Company to grant, extend or enter into
any such option, warrant, right, commitment or agreement. Except as disclosed in the SEC Reports, there are no stockholders agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party
or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 


(e)
Immediately prior to the Closing, no option, security or other equity award convertible or exercisable into stock of the Company
shall contain a provision for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions
or other terms of such option, security or other equity award upon the occurrence of any event or combination of events, except
as disclosed in the SEC Reports. No share, option, security or other equity award convertible or exercisable into shares of the
Company is subject to repurchase or redemption (contingent or otherwise) by the Company, and the Company has not repurchased or
redeemed any of the Company’s shares of stock, options, security or other equity awards.


 


(f)
No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. The issue and sale of the Securities will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities.


 


(g)
The Company has not declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or
series of its share capital.


 


2.4
Authorization. The Company has all requisite corporate power and authority, and has taken all requisite corporate action
on the part of the Company, its directors and stockholders, necessary for the authorization, execution and delivery of this Agreement
and the other agreements, instruments or documents entered into in connection with this Agreement and to which the Company is
a party, including the Warrants (collectively, the “Transaction Documents”) and for the performance of all
obligations of the Company under the Transaction Documents in accordance with their terms has been taken or will be taken prior
to the Closing. The Transaction Documents, when executed and delivered by the Company, and assuming the due authorization, execution
and delivery by the other parties hereto and thereto, constitute valid and binding obligations of the Company, enforceable against
the Company in accordance with their respective terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’
rights generally, and (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other
equitable remedies.


 




    	 



     


    

 


2.5
Valid Issuance. The Purchased Securities being or that may be issued to the Investor, have been duly authorized and when
issued, sold and delivered in accordance with the terms of this Agreement for the consideration expressed herein, shall be duly
and validly issued, fully paid, and non-assessable, issued in compliance with all applicable securities laws, and free and clear
of liens, pledges, charges, encumbrances or other restrictions on transfer of any kind (including, without limitation, preemptive
rights), other than restrictions on transfer under this Agreement, the Articles, the Company’s currently effective Bylaws
(the “Bylaws”) and under applicable securities laws and other than liens or encumbrances created by or imposed
by the Investor. The shares of Common Stock underlying the Warrants have been duly authorized and, upon exercise of the Warrants
in accordance with their terms, will be validly issued, fully paid and nonassessable. The rights, privileges and preferences of
the Purchased Securities are as stated in the Articles and Bylaws, as may be amended from time to time in accordance with their
terms. Assuming the accuracy of the representations made by the Investor in Section 3, the offer and issuance by the Company of
the Purchased Securities is exempt from registration under the Securities Act.


 


2.6
No Conflict; Consents. The execution, delivery and performance by the Company of this Agreement and the other Transaction
Documents to which it is a party, the issuance and sale of the Purchased Securities and the consummation by it of the transactions
contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Articles, Bylaws or other
organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of any lien, charge, pledge, security interest, encumbrance, right
of first refusal, preemptive right or other restriction, upon any of the properties or assets of the Company, or give to others
any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company debt or otherwise) or other understanding to which the Company
is a party or by which any property or asset of the Company is bound or affected, or (iii) conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset
of the Company is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect. No consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state, or local governmental authority on the part of the Company or the
Subsidiary is required in connection with the consummation of the transactions contemplated by the Transaction Documents.


 


2.7
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) for the one-year period preceding the date hereof (collectively, the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and the rules and regulations of the Commission promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC Reports (the “Financial Statements”)
comply in all material respects with applicable accounting requirements and the rules and regulations of the Securities and Exchange
Commission (the “Commission”) with respect thereto as in effect at the time of filing. Such Financial Statements
have been prepared in accordance with Generally Accepted Accounting Principles in the U.S. (“US GAAP”), except
as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by US GAAP, and fairly present in all material respects the consolidated financial condition
and position of the Company and the Subsidiary, as of and for the dates thereof and the results of operations and cash flows for
the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.


 




    	 



     


    

 


2.8
Material Changes. Since December 31, 2019 there has been no event, occurrence or development that has had or that would
reasonably be expected to result in a Material Adverse Effect.


 


2.9
Continued Quotation. The Company is currently quoted on the OTC Markets, Pink Tier, and it is and has no reason to believe
that it will not in the foreseeable future continue to be, in compliance with all such quotation and maintenance requirements
of the “Pink Sheets” published and maintained by OTC Markets Group, Inc., and shall make commercial best efforts to
maintain such compliance.


 


2.10
Financial Statements; No Undisclosed Liabilities.


 


(a)
The Company and the Subsidiary has no liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred
in the ordinary course of business, which, individually and in the aggregate, do not exceed US$300,000; (ii) debt of the Subsidiary
to Medigus Ltd. in the principal amount of US$380,000; and (iii) liabilities and obligations of a type or nature not required
under GAAP to be reflected in its financial statements, which, individually and in the aggregate do not exceed US$100,000.


 


(b)
The Company and the Subsidiary are not guarantors or indemnitors of any debt or obligation of another, nor has the Company or
the Subsidiary given any loan, security or otherwise agreed to become liable for any obligation of any person. No person has given
any guarantee of, or security for, any obligation of the Company or the Subsidiary. The Company and the Subsidiary did not extend
any loans or advances to any person, other than advances for expenses to its employees in the ordinary course of business.


 


2.11
Assets and Properties. Both the Company and the Subsidiary have good and marketable title to all of the tangible or personal
properties and assets owned by the Company and the Subsidiary, which are material to the business of the Company or the Subsidiary
as currently conducted as now conducted and as proposed in the SEC Reports to be conducted, and such properties and assets are
free and clear of all mortgages, deeds of trust, liens, pledges, charges, security interests, conditional sale agreement, loans
and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and
liens that arise in the ordinary course of business and do not materially impair the Company’s or the Subsidiary’s
ownership or use of such property or assets. With respect to the tangible property and assets it leases, the Company and the Subsidiary
are in compliance in all material respects with such leases and, to the Company’s knowledge, holds a valid leasehold or
license interest free of any liens, pledges, charges, security interest, claims or encumbrances, other than those of the lessors
of such property or assets. The Company and the Subsidiary do not own any real property.


 


2.12
Intellectual Property. The Company and the Subsidiary own, or have rights to use, all patents, patent applications, trademarks,
trademark applications, trade and service mark registrations, service marks, trade names, trade secrets, inventions, copyrights,
technology, know-how, licenses and other intellectual property rights, proprietary rights and similar rights in connection with
their respective businesses and which the failure to so have could or reasonably be expected to have a Material Adverse Effect
(collectively, the “Intellectual Property Rights”). Neither the Company nor the Subsidiary have received a
notice (written or otherwise) that any of, the material Intellectual Property Rights has expired, terminated or been abandoned,
or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company
nor the Subsidiary have received, since Jan 1, 2019, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe (and will not infringe) the rights of any Person. To the knowledge of the Company, all such
Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and the Subsidiary have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except as disclosed to the Investor in writing, the Company has no knowledge
of any facts that would preclude it or the Subsidiary from having valid license rights or clear title to the Intellectual Property
Rights. There is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Company Intellectual Property or the Company’s Intellectual Property Rights. The Company and
the Subsidiary own or have rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business
as now conducted and as proposed in the SEC Reports to be conducted. For purposes of this Section, “knowledge”, including
the phrase “to the Company’s knowledge” (or similar phrases), when used in this Section 2.11 (Intellectual
Property) shall mean the actual knowledge of the Company, without conducting any patent search, freedom to operate, infringement,
or any similar search.


 




    	 



     


    

 


2.13
Labor Matters.


 


(a)
The Company and the Subsidiary have complied, in all material respects, with all applicable employment laws, policies, procedures
and agreements relating to employment, and terms and conditions of employment. The Company and the Subsidiary have paid in full
to all of its respective employees and consultants all wages, salaries, commissions, bonuses, benefits and other compensation
due and payable to such employees or consultants on or prior to the date of this Agreement. The Company and the Subsidiary have
complied in all material respects with the applicable laws relating to the proper withholding and remittance to the proper tax
and other authorities of all sums required to be withheld from employees or persons deemed to be employees under applicable laws.
To the Company’s knowledge, all persons classified by the Company or the Subsidiary as consultants or contractors thereof
are correctly classified as such and not as employees for any purpose. The Company’s and the Subsidiary’s liability
for any obligations to pay any amount of severance payment, pension, accrued vacation, and other social benefits and contributions,
under applicable law or contract, or any other payment of substantially the same nature, is fully funded by deposit of funds in
severance funds, pension funds, managers insurance policies or provident funds (and if not required to be so funded) adequate
provisions have been made in the Company’s Financial Statements.


 


(b)
Neither the Company nor the Subsidiary is a party to, bound by or subject to, and no employee of the Company or the Subsidiary
benefits from, any collective bargaining agreement, collective labor agreement, extension orders (tzavei harchava) (other
than extension orders that apply to all employees in Israel generally), or other contract or arrangement with a labor union, trade
union or other organization or body, to provide benefits or working conditions beyond the minimum benefits and working conditions
required by applicable law. No labor union has requested or has sought to represent any of the employees, representatives or agents
of the Company or the Subsidiary, nor is the Company or the Subsidiary aware of any labor organization activity involving its
employees. There is no strike or other labor dispute involving the Company or the Subsidiary pending or, to the Company’s
knowledge, threatened.


 


2.14
Taxes. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in
a Material Adverse Effect, the Company and the Subsidiary each (i) except as disclosed to the Investor in writing, has made or
filed all United States federal, state and local income and foreign income and franchise tax returns, reports and declarations
required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its
books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. Except as disclosed in SEC Reports, there are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and neither the officers of the Company nor the Subsidiary know of no basis
for any such claim.


 


2.15
Governmental Grants. Neither the Company nor the Subsidiary have applied, obtained or received any grant, loan, incentives,
benefits (including tax benefits), subsidies or other assistance from any governmental or regulatory authority or any agency,
or any international or bilateral fund, institute or organization or public entities or authorities.


 


2.16
Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or, to the Company’s knowledge,
investigation pending, or, to the Company’s knowledge, currently threatened in writing against the Company or the Subsidiary,
any of its properties, or any officer, director or employee of the Company or the Subsidiary, including, without limitation, arising
out of their employment or board relationship with the Company or the Subsidiary or in their capacity as such, or that questions
the validity of the Transaction Documents or the right of the Company to enter into them, or to consummate the transactions contemplated
by the Transaction Documents.


 




    	 



     


    

 


2.17
Insurance. The Company and the Subsidiary are covered by insurance with respect to its properties and business.


 


2.18
Compliance. Neither the Company nor the Subsidiary (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or the Subsidiary
under), nor has the Company or the Subsidiary received written notice of a claim that it is in default under, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental
body, or (iii) is in violation of any law, rule or regulation of any governmental authority, except in each case as would not
have a Material Adverse Effect.


 


2.19
Permits. The Company and the Subsidiary possess all licenses, certificates, permits and other authorizations issued by
all applicable authorities necessary to conduct their respective businesses, and neither the Company nor the Subsidiary has received
any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.


 


2.20
Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or the Subsidiary
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect
to the transactions contemplated by this Agreement.


 


2.21
Disclosure. No representation or warranty of the Company contained in this Agreement and no certificate furnished or to
be furnished to the Investor at the Closing contains any untrue statement of a material fact or, to the Company’s knowledge,
omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made.


 


3.
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.


 


The
Investor hereby represents and warrants that the following representations are true, correct and complete as of the date hereof
and as of the Closing (as if made on the Closing Date); except, in each case, as to such representations and warranties that address
matters as of a particular date, which are given only as of such date:


 


3.1
Authorization; Organization. The Investor is duly organized, validly existing and, if applicable, in good standing under
the laws of the jurisdiction in which it has been incorporated and has full power and authority to enter into the Transaction
Documents to which the Investor is a party. The Transaction Documents to which the Investor is a party, when executed and delivered
by the Investor, and assuming the due authorization, execution and delivery by the other parties hereto and thereto, constitute
valid and binding obligations of the Investor, enforceable against the Investor in accordance with their respective terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general
application relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Rights Agreement, as may be limited by applicable securities laws.


 


3.2
No Conflict; Consents. The execution, delivery and performance by the Investor of the Transaction Documents to which it
is a party and the consummation of the transactions contemplated by such Transaction Documents do not and will not (a) result
in any conflict with, or a breach or violation, with or without the passage of time and giving of notice, of any of the terms,
conditions or provisions of, or give rise to rights to others (including rights of termination, cancellation or acceleration)
under: (i) the governing documents of the Investor; (ii) any judgment, injunction, order, writ, decree or ruling of any court
or governmental authority, domestic or foreign, to which the Investor is subject; (iii) any material contract or agreement, lease,
license or commitment to which the Investor is a party or by which it is bound; (iv) any applicable law; or (b) require the consent,
approval or authorization of, registration, qualification or filing with, or notice to any person or any federal, state, local
or foreign governmental authority or regulatory authority or agency, in each case, by the Investor, which has not heretofore been
obtained or made or will be obtained or made prior to Closing.


 




    	 



     


    

 


3.3
Purchase Entirely for Own Account. The Purchased Securities will be acquired for investment for the Investor’s own
account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Investor has
no present intention of selling, granting any participation in, or otherwise distributing the same. The Investor does not presently
have any contract, undertaking, agreement or arrangement to sell, transfer or grant participation rights to any person with respect
to any of the Purchased Securities. The Investor has not been formed for the specific purpose of acquiring the Purchased Securities.


 


3.4
Disclosure of Information. The Investor has had an opportunity to discuss the Company’s business, operations, properties,
prospects, technology, plans, management, financial affairs and the terms and conditions of the offering of the Purchased Securities
with the Company’s management and has had an opportunity to review the Company’s facilities. The foregoing, however,
does not limit, modify or qualify the representations and warranties of the Company in Section ‎2 of this Agreement or the
right of the Investor to rely thereon. The Investor acknowledges that any projections provided (if any) by the Company are uncertain
in nature, and that some or all of the assumptions underlying such projections may not materialize or will vary significantly
from actual results.


 


3.5
Investment Experience; Accredited Investor; Non-U.S. Person. The Investor is an investor in securities of companies in
the development stage and acknowledges that it is able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is capable of evaluating and understanding the merits and
risks of the investment in the Purchased Securities. The Investor is either (i) an accredited investor as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act or (ii) a Non U.S. Person as defined under Regulation S promulgated under
the Securities Act. To the extent that the Investor is a non U.S. Person, the Investor (x) is not acquiring Purchased Securities
for the account or benefit of any U.S. Person, (y) is not, at the time of execution of this Agreement, and will not be, at the
time of the Closing, in the United States and (z) is not a “distributor” (as defined in Regulation S promulgated under
the Securities Act).


 


3.6
Restricted Securities. The Purchased Securities have not been and will not be registered under the Securities Act or any
state securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state
securities laws or unless an exemption from such registration requirements is available. The Investor is aware that, except as
set forth in the Registration Rights Agreement, the Company is under no obligation to effect any such registration or to file
for or comply with any exemption from registration. The sale and issuance of the Purchased Securities have not been registered
under the Securities Act by reason of a specific exemption from registration which depends upon, among other things, the accuracy
of the Investor’s representations as expressed herein.


 


3.7
Legends. The Purchased Securities, and (if applicable) any securities issued in respect of or exchange for the foregoing
may be notated with the following or a similar legend as well as other legends as may be required by applicable securities laws:
“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO TRANSFER OF SUCH SHARES MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”


 




    	 



     


    

 


4.
CONDITIONS OF INVESTOR’S OBLIGATIONS AT CLOSING.


 


The
obligation of the Investor to purchase the Purchased Securities at the Closing are subject to the fulfillment on or before the
Closing of each of the following conditions, unless otherwise waived in writing by the Investor:


 


4.1
Representations and Warranties. The representations and warranties of the Company in Section 2 of this Agreement shall
have been true in all respects on and as if made as of the Closing.


 


4.2
Performance. The Company shall have performed and complied, in all respects, with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with by it on or before the Closing.


 


4.3
Delivery of Documents. All of the documents to be delivered by the Company pursuant to Section ‎1.4, shall have been
in a form as attached to this Agreement, or, if not attached, in a form and substance satisfactory to the Investor and shall have
been delivered to the Investor.


 


4.4
Appointment of Investor Representative to the Board. Effective immediately following the Closing, the Company shall cause
a representative selected exclusively by the Investor to be appointed to the Board.


 


4.5
Registration Rights Agreement. The Company and the Investor shall have executed and delivered the Registration Rights Agreement.


 


4.6
Voting Agreement. The Company, the Investor and Medigus shall have executed and delivered the Voting Agreement.


 


5.
CONDITIONS OF THE COMPANY’S OBLIGATIONS AT CLOSING.


 


The
obligations of the Company to the Investor under this Agreement are subject to the fulfillment on or before the Closing, of each
of the following conditions, unless otherwise waived in writing by the Company:


 


5.1
Representations and Warranties. The representations and warranties contained in Section ‎3 shall have been true in
all respects on and as if made as of the Closing.


 


5.2
Performance. The Investor shall have performed and complied, in all respects, with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with by it on or before the Closing.


 


6.
AFFIRMATIVE COVENANTS BY THE COMPANY.


 


6.1
Use of Proceeds. The Company will use the Purchase Price for general working capital purposes.


 


6.2
Conduct of the Business between Signing and Closing. Except as otherwise expressly provided by this Agreement or with the
prior written consent of the Investor, the Company shall (i) conduct its business in the ordinary course of business, consistent
with prior practice; (ii) comply with legal requirements applicable to the operation of its business and pay applicable taxes
as due; (iii) maintain its books, accounts and records in the ordinary course of business; and (iv) not take any other action
that would result in a breach of any of the representations, warranties or covenants made by the Company in this Agreement or
that would adversely affect its ability to consummate the transactions contemplated by this Agreement.


 


7.
INDEMNIFICATION.


 


7.1
Effectiveness; Survival.


 


(a)
The Investor has the right to fully rely upon all representations, warranties and covenants of the Company, for which the Company
shall be held responsible (the “Indemnitor”), contained in or made pursuant to this Agreement and in the schedules
attached hereto. The representations and warranties of the Company contained in or made pursuant to this Agreement shall in no
way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Investor.


 




    	 



     


    

 


(b)
The representations and warranties of the Company contained in or made pursuant to this Agreement shall survive the execution
and delivery of this Agreement and the Closing, until (1) in case of Section 2.11 (Intellectual Property), until the 30th
months anniversary of the Closing Date; (2) in case of Sections 2.2 (Organization), 2.4 (Authorization) and
2.6 (No Conflict; Consents), until the expiration of the applicable statute of limitation period; and (3) other than as
set forth in clause (1) above, the 24th months anniversary of the Closing Date; in each case, with respect to any theretofore
un-asserted claims as set forth in clause (d) below;


 


(c)
In respect to Section 7.1(b) above, no limitation shall apply to breach of any representation or warranty, which constitutes or
otherwise involves fraud or willful misrepresentation or breach by the Company (“Fraud”). The applicable survival
period shall be referred to, as applicable, as the “Claims Period”.


 


(d)
Except for Fraud, the Company shall have any liability with respect to any breach of representation and warranty, unless a claim
is made hereunder prior to the expiration of the Claims Period for such representation and warranty, in which case such representation
and warranty shall survive as to that claim until the claim has been finally resolved.


 


(e)
It is the intention of the parties hereto that the Claims Periods supersede any statute of limitations applicable to the representations
and warranties, and this Section ‎7.1 constitutes a separate written legally binding agreement among the parties hereto
in accordance with the provisions of Section 19 of the Israeli Limitation Law, 1958.


 


7.2
Indemnification.


 


(a)
Indemnifiable Losses. The Indemnitor shall indemnify the Investor (including its shareholders, limited and general partners
directors and officers) (each, an “Indemnitee”) against, and hold each Indemnitee harmless from all claims,
actions, suits, settlements, damages, expenses (including, reasonable legal costs and expenses), losses, or costs sustained or
incurred by such Indemnitees (collectively, “Losses”) resulting from, or arising out of, a breach or misrepresentations
of any the Indemnitor’s representations, warranties or covenants made in this Agreement, subject to the limitations in this
Section ‎7.


 


(b)
Limitations. The Indemnitee’s right for indemnification hereunder is subject to the following conditions and limitations,
notwithstanding anything to the contrary in this Agreement, but in addition to any other limitation or condition contained herein;
provided, however, no limitation shall apply to Fraud:


 


(i)
Other than in respect of the Fundamental Representations, no Indemnitor shall be liable for any Loss, unless and until the aggregate
of Losses equal or exceeds US$100,000, in which case indemnification shall be made from the first dollar amount.


 


(ii)
The Indemnitor’s liability shall be limited to the Purchase Price.


 


(c)
Claims Notice; Third Party Claims. In the event that an Indemnitee wishes to assert a claim for indemnification hereunder
it shall give the Indemnitor a prompt written notice thereof (a “Claims Notice”), which shall describe in reasonable
detail the facts and circumstances upon which the asserted claim for indemnification is based and thereafter keep the Indemnitor
informed, in all material respects, with respect thereto. In the event that such Claims Notice results from a third party claim
against the Indemnitee, such Indemnitee shall promptly upon becoming aware of the commencement of proceedings by such third party
provide the Indemnitor with the Claims Notice and the Indemnitor shall have the right to assume the defense thereof (at Indemnitor’s
expense) with counsel mutually satisfactory to the parties; provided, however, that the Indemnitees shall have the right
to retain their own counsel, at the reasonable expense of the Indemnitor, and within the indemnification limitations herein, if
representation of all parties by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing
interests between the parties in such proceeding. Failure of the Indemnitees to give prompt notice or to keep it informed, as
provided herein, shall not relieve the Indemnitor of any of its obligations hereunder, except to the extent that the Indemnitor
is actually and materially prejudiced by such failure. The Indemnitor shall not be liable nor shall it be required to indemnify
or hold harmless the Indemnitee in connection with any settlement effected without its consent in writing, which shall not be
unreasonably withheld or delayed.


 




    	 



     


    

 


(d)
Sole Remedy. The indemnification provided by the Indemnitor hereunder and the enforcement of such indemnification shall
be the exclusive remedy available to the Indemnitees under this Agreement, other than with respect to Fraud; provided that
this provision does not limit the right to seek specific performance, a restraining order or injunctive or other equitable relief
with respect to any provision of this Agreement.


 


8.
MISCELLANEOUS.


 


8.1
Further Assurances. Each of the parties hereto shall perform such further acts and execute such further documents as may
reasonably be necessary to carry out and give full effect to the provisions of this Agreement and the intentions of the parties
as reflected thereby.


 


8.2
Entire Agreement. This Agreement (including the exhibits and schedules hereto) and the other Transaction Documents constitute
the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and supersede all
prior agreements and understandings, both written and oral, among any of the parties hereto, with respect to the subject matter
hereof (with no concession being made as to the existence of any such prior agreements or understandings).


 


8.3
Amendment; Waiver. Except as explicitly set forth herein, any term of this Agreement may be amended only with the written
consent of both the Company and the Investor. The observance of any term hereof may be waived (either prospectively or retroactively
and either generally or in a particular instance) only by the prior written consent of the party against which enforcement of
such waiver shall be sought. Any amendment or waiver effected in accordance with this Section ‎8.3 shall be binding upon the
Investor and each transferee of the Purchased Securities, each future holder of all such securities and the Company.


 


8.4
Assignment; Successors and Assigns. None of the rights, privileges or obligations set forth in, arising under, or created
by this Agreement may be assigned or transferred by either party, without the prior written consent of the other party. Nothing
in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.


 


8.5
Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with to the laws of the State
of Israel, disregarding its conflict of laws rules. Any dispute arising under or in relation to this Agreement shall be resolved
exclusively in the competent court located in Tel Aviv-Jaffa, Israel and each of the parties hereby irrevocably submits to the
exclusive jurisdiction of such court. Each of the parties hereto (i) consents to submit itself to the exclusive jurisdiction of
the abovementioned courts in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement,
(ii) agrees that it shall not attempt to deny or defeat such jurisdiction by motion or other request for leave from the abovementioned
court, (iii) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement
in any court other than the abovementioned court, and (iv) irrevocably consents to service of process in the manner provided by
Section ‎8.6 or as otherwise provided by applicable law.


 


8.6
Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be
deemed effectively given upon the earlier of actual receipt, or (i) when delivered, if sent by personal delivery to the party
to be notified, (ii) when sent, if sent by electronic mail or facsimile (with electronic conformation of delivery) on a business
day and during normal business hours of the recipient, and otherwise on the first business day in the place of recipient, (iii)
five (5) business days after having been sent, if sent by registered or certified mail, return receipt requested, postage prepaid,
or (iv) one (1) business day after deposit with an internationally recognized overnight courier, freight prepaid, specifying next
business day delivery, with written confirmation of receipt. All communications shall be sent to the respective parties at their
address or contact details as set forth below, or to such address or contact details as subsequently modified by written notice
given in accordance with this Section 8.6 or, in the case of the Investor, as used for purposes of sending shareholders’
notices by the Company.


 




    	 



     


    

 


	If
    to the Company:	7A
        Industrial Park, P.O. Box 3030, Omer, 8496500, Israel

        Attention:
        Yaron Silberman

        Telephone:
        +972-72-260-2200

        E-mail:
        yaron.silberman@scoutcam.com

	 	 
	 	with
    a mandatory copy to (which shall not constitute a notice):
	 	 
	 	Meitar
        | Law Offices

        16
        Abba Hillel St., Ramat-Gan, Israel

        Attention:
        Dr. Shachar Hadar, Adv.

        Telephone:
        +972-3-6103961

        E-mail:
        shacharh@meitar.com

	 	 
	If
    to the Investor:	as
    set forth on the signature page hereto/Exhibit A


 


8.7
Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing
to any party to this Agreement upon any breach or default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed
a waiver of any other breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any kind
or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of
any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set
forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party to this Agreement,
shall be cumulative and not alternative.


 


8.8
Interpretation. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement. The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”. Unless the context requires otherwise, the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer
to this Agreement in its entirety, and not to any particular provision hereof, and all references herein to Sections shall be
construed to refer to Sections to this Agreement. Reference to “governmental authorities” (or similar terms) shall
include any: (a) nation, principality, state, commonwealth, territory, county, municipality, district or other jurisdiction of
any nature, (b) federal, state, local, municipal, foreign or other government, (c) governmental, quasi-governmental or regulatory
body of any nature, including any governmental division, subdivision, department, agency, bureau, branch, office, commission,
council, board, instrumentality, organization, unit, or body, or (d) court, public or private arbitrator or other public tribunal.
Reference to a “person” shall mean any individual, corporation, partnership, limited liability company, firm, joint
venture, association, joint-stock company, trust, estate, unincorporated organization, governmental authority or other entity,
including, any party to this Agreement. Any reference to a “day” or a number of days (without explicit reference to
“business days”) shall be interpreted as a reference to a calendar day or number of calendar days, and if any action
is to be taken or given on or by a particular calendar day, and such calendar day is not a business day, then such action may
be deferred until the first business day thereafter (where “business day” shall mean any day on which banking institutions
in Tel-Aviv-Jaffa, Israel are generally open to the public for conducting business and are not required by law to close).


 


8.9
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be enforceable in accordance with its terms and interpreted
so as to give effect, to the fullest extent consistent with and permitted by applicable law, to the meaning and intention of the
excluded provision.


 


8.10
Counterparts. This Agreement and any Transaction Document may be executed in one or more counterparts, all of which together
shall constitute one and the same instrument, binding and enforceable against the parties so executing the same; it being understood
that all parties need not sign the same counterpart. Counterparts may also be delivered by facsimile or email transmission (in
pdf format or the like, or signed with docusign, e-sign or any similar form of signature by electronic means) and any counterpart
so delivered shall be sufficient to bind the parties to this Agreement or any other Transaction Document, as an original.


 


-
Signature Pages Follow -


 




    	 



     


    

 


IN
WITNESS WHEREOF, the parties have executed this SECURITIES PURCHASE AGREEMENT to be executed as of the date first written above.


 


	 	COMPANY:
	 	 
	 	SCOUTCAM
    INC.
	 	 
	 	By:	/s/
    Yaron Silberman
	 	Name:	Yaron
    Silberman
	 	Title:	Chief
    Executive Officer


 


	 	By:	/s/
    Tanya Yosef
	 	Name:	Tanya
    Yosef
	 	Title:	Chief
    Financial Officer


 


[Company
Signature Page to Securities Purchase Agreement]







 




    	 



     


    

 


IN
WITNESS WHEREOF, the parties have executed this SECURITIES PURCHASE AGREEMENT as of the date first written above.


 


INVESTOR:


 


M.
Arkin (1999) Ltd.


 


	By:	/s/
    Mori Arkin	 
	Name:	Mori
    Arkin	 
	Title:	Director	 
	Address:	6 Hachoshlim Street, Building C, 6th Floor, Herzliya, Israel 4672406


 


[Company
Signature Page to Securities Purchase Agreement]


 




    	 



     


    

 


Exhibit
List


 


Exhibit
A - Investor and Purchased Securities at the Closing


 


Appendix
List


 


Appendix
A – Form Warrant A


 


Appendix
B – Form Warrant B


 


Appendix
C – Registration Rights Agreement


 


Appendix
D – Voting Agreement


 


Appendix
E – Capitalization Table


 




    	 



     


    

 


Exhibit
A


 


Investor
and Purchased Securities at the Closing


 


	Name of Investor	 	Investment 

Amount	 	Purchased Shares	 	 	Shares

 Underlying

 Purchased

 Warrant A	 	 	Shares

 Underlying Purchased

 Warrant B	 
	M. Arkin (1999) Ltd.	 	US$2,000,000	 	 	4,132,232	 	 	 	2,066,116	 	 	 	4,132,232