Document:

Exhibit
10.1

 

 

Form
of

Convertible
Note Purchase Agreement 

 

 

This Convertible Note Purchase
Agreement (the “Agreement”) dated as of [Month] [Day], 2022 (the “Effective Date”) among:

 

(a)        MOSAIC
IMMUNOENGINEERING, INC., a Delaware corporation (the “Company”) and

 

(b)       And
the persons and entities (each individually a “Purchaser,” and collectively, the “Purchasers”) named
on the Schedule of Purchasers attached hereto (the “Schedule of Purchasers”)

 

Each of the Company and the
Purchasers are, individually, a “Party” and are, collectively the “Parties.”

 

Background

 

A.        The
Company desires to issue and sell (the “Offering”) up to an aggregate principal amount of up to $5,000,000 of convertible
notes in substantially the form attached to this Agreement as Exhibit A (each a “Note” and, collectively, the
“Notes”) for a purchase price equal to the principal amount thereof (the “Consideration”) set forth
opposite each Purchaser’s name on the Schedule of Purchasers.

 

B.        The
Offering is being conducted pursuant to the exemptions from the registration provisions of the Securities Act of 1933, as amended (the
“Securities Act”) provided by Section 4(a)(2) of the Securities Act and Rule 506(b) (“Rule 506”)
of Regulation D thereunder.

 

C.        The
Purchaser (the Purchaser, together with the other purchasers of the Notes, are sometimes referred to collectively as the “Purchasers”)
desires to purchase a Note.

 

NOW THEREFORE, in
consideration of the mutual promises contained herein and other good and valuable consideration, the receipt of which is hereby acknowledged,
the parties to this Agreement agree as follows:

 

1.            
Definitions. Capitalized terms not otherwise defined in this Agreement will have the meanings set forth in this Section
1.

 

1.1             
“Common Stock” means the Company’s common stock, $0.00001 par value per share.

 

1.2             
“Conversion Stock” (for purposes of determining the type of Equity Securities issuable upon conversion of the
Notes) means:

 

(a)              
with respect to a conversion pursuant to Section 4.1, units of the Equity Securities issued in the Qualified Financing; and

 

(b)              
with respect to a conversion pursuant to Section 4.2, Common Stock.

 

1.3             
“Conversion Price” means:

 

(a)              
with respect to a conversion pursuant to Section 4.1, the lesser of: (i) the product of (x) 100% less the Discount and (y)
the lowest per unit purchase price of the Equity Securities issued for cash in the Qualified Financing; and (ii) $1.00 per share; and

 

(b)              
with respect to a conversion pursuant to Section 4.2, $1.00 per share.

 

 

    	 	 	 

     

    

 

1.4             
“Corporate Transaction” means:

 

(a)              
the closing of the sale, transfer or other disposition, in a single transaction or series of related transactions, of all or substantially
all of the Company’s assets;

 

(b)              
the consummation of a merger or consolidation of the Company with or into another entity (except a merger or consolidation in which
the holders of voting securities of the Company immediately prior to such merger or consolidation continue to hold a majority of the outstanding
voting securities of the Company or the surviving or acquiring entity immediately following the consummation of such transaction); or

 

(c)              
the closing of the transfer (whether by merger, consolidation or otherwise), in a single transaction or series of related transactions,
to a “person” or “group” (within the meaning of Section 13(d) and Section 14(d) of the Exchange Act) of the Company’s
voting securities if, after such closing, such person or group would become the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act) of more than 50% of the outstanding voting securities of the Company (or the surviving or acquiring entity).

 

For the avoidance
of doubt, a transaction will not constitute a “Corporate Transaction” if its sole purpose is to change the state of the Company’s
organization or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s
securities immediately prior to such transaction. Notwithstanding the foregoing, the sale of Equity Securities in a bona fide financing
transaction will not be deemed a “Corporate Transaction.”

 

1.5             
“Discount” means 20%.

 

1.6             
“Eligible Purchaser” means a Purchaser who purchased at least (a) $50,000 of Notes or (b) an amount of Notes
equivalent to that amount that such Purchaser also purchased of May 7 Notes.

 

1.7             
“Equity Securities” means (a) Common Stock; (b) any securities conferring the right to purchase Common Stock;
or (c) any securities directly or indirectly convertible into, or exchangeable for (with or without additional consideration) Common Stock.
Notwithstanding the foregoing, the following will not be considered “Equity Securities”: (i) any security granted, issued
or sold by the Company to any director, officer, employee, consultant or adviser of the Company for the primary purpose of soliciting
or retaining their services; and (ii) any convertible promissory notes (including the Notes) issued by the Company.

 

1.8             
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

1.9             
 “Maturity” means, with respect to each Note issued under this Agreement, unless previously converted or repaid,
upon the occurrence of a Corporate Transaction, unless otherwise converted into Conversion Stock pursuant to Section 4.2.

 

1.10           
“May 7 Note Agreement” means that certain Convertible Note Agreement, dated May 7, 2021, between the Company
and the investors set forth therein.

 

1.11           
“May 7 Notes” means those certain convertible notes of the Company issued on May, 7 2021 to the investors specified
in the May 7 Note Agreement.

 

1.12           
“Note Documents” means this Agreement and the Notes.

 

1.13           
 “Notes” means the one or more promissory notes issued to each Purchaser pursuant to Section 2, the form of
which is attached hereto as Exhibit A.

 

    	 	2	 

     

    

 

1.14           
“Material Adverse Effect” means a material adverse effect on (i) the assets, liabilities, results of operations,
condition (financial or otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of
the Company to perform its obligations under the Note Documents.

 

1.15            
“Noteholder” means each person or entity holding a Note.

 

1.16           
“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association,
joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity
not specifically listed herein.

 

1.17           
“Preferred Stock” means the Company’s Series B Preferred Stock

 

1.18           
“Qualified Financing” means the next sale (or series of related sales) by the Company of its Equity Securities
following the date of this Agreement from which the Company receives gross proceeds of not less than Five Million Dollars ($5,000,000)
(excluding, for the avoidance of doubt, the aggregate principal amount of the Notes).

 

1.19           
“Requisite Noteholders” means such Noteholders holding an aggregate principal amount of 51% of the aggregate
principal amount of the Notes then outstanding.

 

1.20           
“Securities Act” means the Securities Act of 1933, as amended.

 

1.21           
“Smaller Financing” means the next sale (or series of related sales) by the Company of its Equity Securities
following the date of this Agreement from which the Company receives gross proceeds of less than a Qualified Financing (excluding, for
the avoidance of doubt, the aggregate principal amount of the Notes).

 

1.22           
“Subsidiary” of any Person means another Person, an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to elect at least a majority of its board of directors or other governing body
(or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first
Person.

 

2.            
Purchase and Sale of Notes. In exchange for the Consideration paid by each Purchaser, the Company will sell and issue to
such Purchaser one or more Notes. The Consideration for each Note will be equal to the principal amount of such Note as set forth opposite
such Purchaser’s name on the Schedule of Purchasers.

 

3.            
Closings.

 

3.1             
Initial Closing. The initial closing of the sale of the Notes in return for the Consideration paid by each Purchaser (the
“Initial Closing”) will take place remotely via the exchange of documents and signatures on the date of this Agreement,
or at such other time and place as the Company and the Purchasers purchasing a majority-in-interest of the aggregate principal amount
of the Notes to be sold at the Initial Closing agree upon by email or in writing. At the Initial Closing, each Purchaser will deliver
the Consideration to the Company in immediately available funds in accordance with the wire instructions set forth in Exhibit B and the
Company will deliver to each Purchaser one or more executed Notes in return for the respective Consideration provided to the Company.

 

3.2             
Subsequent Closings. In any subsequent closing (each a “Subsequent Closing”), the Company may sell additional
Notes subject to the terms of this Agreement to any purchaser as the Company shall select; provided that the aggregate principal
amount of Notes issued pursuant to this Agreement does not exceed Five Million Dollars ($5,000,000), and the final Subsequent Closing
shall occur no later than June 30, 2022, unless extended by the Company. Any subsequent purchasers of Notes will become parties to, and
will be entitled to receive Notes in accordance with, this Agreement. Each Subsequent Closing will take place remotely via the exchange
of documents and signatures or at such locations and at such times as will be mutually agreed upon orally or in writing by the Company
and such purchasers of additional Notes. The Schedule of Purchasers will be updated to reflect the additional Notes purchased at each
Subsequent Closing and the parties purchasing such additional Notes.

 

    	 	3	 

     

    

 

4.            
Conversion. Each Note shall be convertible into Conversion Stock pursuant to this Section 4.

 

4.1             
Qualified Financing Conversion.

 

(a)         
The principal balance and unpaid accrued interest on each Note will automatically convert into Conversion Stock upon the closing
of the Qualified Financing. The number of Conversion Stock the Company issues upon such conversion will equal the quotient (rounded down
to the nearest whole unit) obtained by dividing (x) the outstanding principal balance and unpaid accrued interest under each converting
Note on the date of conversion by (y) the applicable Conversion Price. At least five (5) days prior to the closing of the Qualified Financing,
the Company will notify the holder of each Note in writing of the terms of the Equity Securities that are expected to be issued in such
financing. The issuance of Conversion Stock pursuant to the conversion of each Note will be on, and subject to, the same terms and conditions
applicable to the Equity Securities issued in the Qualified Financing.

 

(b)         
Upon any Smaller Financing, each Noteholder will have right to convert the principal balance and unpaid accrued interest upon the
closing of a Smaller Financing, subject to the same terms and conditions as set forth for a Qualified Financing under Section 4.1(a).

 

4.2             
Corporate Transaction Conversion. In the event of a Corporate Transaction prior to the conversion of a Note pursuant to
Section 4.1, at the closing of such Corporate Transaction, the holder of each Note may elect that either: (a) the Company will pay the
holder of such Note an amount equal to the sum of (x) all accrued and unpaid interest due on such Note and (y) one and one-half (1.5)
times the outstanding principal balance of such Note; or (b) such Note will convert into that number of Conversion Stock equal to the
quotient (rounded down to the nearest whole unit) obtained by dividing (x) the outstanding principal balance and unpaid accrued interest
of such Note on the date of conversion by (y) the applicable Conversion Price. The Company shall provide Purchaser at least fifteen (15)
days’ notice of any proposed Corporate Transaction.

 

4.3             
Mechanics of Conversion.

 

(a)              
Surrender of Note. Upon the conversion of the Notes, pursuant to Section 4 of this Agreement, each Noteholder shall surrender
all Notes held by it for cancellation to the principal office of the Company.

 

(b)              
Certificates. As promptly as practicable after the conversion of each Note and the issuance of the Conversion Stock, the
Company will issue and deliver to the holder thereof a certificate or certificates evidencing the Conversion Stock (if certificated),
or if the Conversion Stock are not certificated, will deliver a true and correct copy of the Company’s unit register reflecting
the Conversion Stock held by such holder. The Company will not be required to issue or deliver the Conversion Stock until the holder of
such Note has surrendered the Note to the Company (or provided an instrument of cancellation or affidavit of loss). The conversion of
the Notes pursuant to Section 4.1 and Section 4.2 may be made contingent upon the closing of the Qualified Financing or Corporate Transaction,
as applicable.

 

(c)              
Effect of Conversion. On and after the effective time of the conversion date, the Noteholder shall be treated for all purposes
as the holder of the Conversion Stock issued thereunder. On and after the effective time of the conversion or the repayment of the Notes,
the Company shall be forever released and discharged from all its obligations and liabilities under this Agreement and the Notes and the
terms and conditions herein.

 

 

 

    	 	4	 

     

    

 

4.4                  
Amendment of May 7 Notes and May 7 Note Agreement for Eligible Purchasers.

 

(a)              
The Company and each Eligible Purchaser agree that the applicable May 7 Note for each Eligible Purchaser shall be amended as follows:

 

(i)                
The Conversion Price set forth in the May 7 Note Agreement is hereby deleted in its entirety and replaced with the definition of
Conversion Price set forth in Section 1.3 of this Agreement.

 

(ii)             
A conversion related to a Qualified Financing under an Eligible Purchaser’s May 7 Note shall use the amended Conversion Price
for purposes of Sections 1.18, 4.1, and 4.3 of the May 7 Note Agreement.

 

(b)              
This amendment of the May 7 Notes and the May 7 Note Agreement shall strictly apply solely to Eligible Purchasers.

 

(c)              
The Company and each Eligible Purchaser acknowledge and agree that upon execution of this Agreement by the Company and each Eligible
Purchaser, this Section 4.4 serves as an amendment to the May 7 Note Agreement (and each applicable May 7 Note) for each Eligible Purchaser
under Section 8.9 of the May 7 Note Agreement.

 

(d)              
The Company and each Eligible Purchaser further acknowledge and agree that no other provisions of either (i) the applicable May
7 Notes for Eligible Purchasers or (ii) the related May 7 Note Agreement as applied to Eligible Purchasers are amended. The Company and
each Eligible Purchaser agree that all other provisions of the May 7 Notes and May 7 Note Agreement are hereby ratified and acknowledged
to be in full force and effect.

 

5.            
No Rights as Stockholder. Neither this Agreement nor the Notes shall, except upon the Notes’ conversion into Conversion
Stock, entitle the Noteholder to any of the rights of a stockholder of the Company.

 

6.            
Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that, except
as set forth in either the schedules delivered herewith (collectively, the “Disclosure Schedules”) or the SEC
Reports (as such term is defined below):

 

6.1             
Organization, Good Standing and Qualification. The Company and its Subsidiaries (as defined below) are each corporations
duly organized, validly existing and in good standing under the laws of the jurisdiction of their incorporation. Each has all requisite
corporate power and authority to carry on their business as now conducted. Each of the Company and its Subsidiaries are duly qualified
to do business as a foreign corporation and are in good standing in each jurisdiction in which the conduct of their business.

 

6.2             
Authorization and Enforceability. The Company has all corporate power and authority and has taken all requisite action on
the part of the Company, its officers, directors and stockholders necessary for (i) the authorization, execution and delivery of the Note
Documents, (ii) the authorization of the performance of all obligations of the Company hereunder or thereunder, and (iii) the authorization,
issuance (or reservation for issuance) and delivery of the Notes and the shares of common stock, $0.00001 par value per share (the “Common
Stock”) of the Company issuable upon conversion thereof (the “Conversion Shares” and, together
with the Notes, the “Securities”). The Note Documents, upon execution and delivery thereof by the Company, will
constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability, relating to or affecting
creditors’ rights generally and to general equitable principles.

 

 

 

    	 	5	 

     

    

 

6.3             
Capitalization. The Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “10-K”)
sets forth as of its date: (i) the authorized and outstanding capital stock of the Company; (ii) the number of shares of capital stock
issuable pursuant to the Company’s stock plans; and (iii) the number of shares of capital stock issuable and reserved for issuance
pursuant to securities (other than the Notes) exercisable for, or convertible into or exchangeable for any shares of capital stock of
the Company. All of the issued and outstanding shares of the Company’s capital stock have been duly authorized and validly issued
and are fully paid, nonassessable and free of pre-emptive rights and were issued in full compliance with applicable state and federal
securities law and any rights of third parties. All of the issued and outstanding shares of capital stock of the Subsidiary have been
duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were issued in full compliance with
applicable state and federal securities law and any rights of third parties and are owned by the Company, beneficially and of record,
subject to no Lien (as defined below). No Person is entitled to pre-emptive or similar statutory or contractual rights with respect to
any securities of the Company. Except as contemplated by the Note Documents and except as disclosed in the SEC Reports, there are no outstanding
warrants, options, convertible securities or other rights, agreements or arrangements of any character under which the Company is or may
be obligated to issue any equity securities of any kind. Except as disclosed in the SEC Reports and except for the Note Documents, there
are no voting agreements, buy-sell agreements, option or right of first purchase agreements or other agreements of any kind among the
Company and any of the securityholders of the Company relating to the securities of the Company held by them. Except as disclosed in the
SEC Reports, no Person has the right to require the Company to register any securities of the Company under the Securities Act, whether
on a demand basis or in connection with the registration of securities of the Company for its own account or for the account of any other
Person. For purposes of this Agreement, “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest of any kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset
and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

 

6.4             
Governmental Approval. No action, consent or approval of, registration or filing with or any other action by any federal,
state, local or foreign court or governmental agency, authority, instrumentality or regulatory body (collectively, “Governmental
Authority”) is or will be required in connection with the transactions contemplated hereby, except for such as have been made or
obtained and are in full force and effect and post-sale filings pursuant to applicable state and federal securities laws which the Company
undertakes to file within the applicable time periods.

 

6.5             
Accuracy of Filings. Neither the 10-K nor any of the Company’s reports, schedules, forms, statements and other documents
filed with the Securities and Exchange Commission (the “SEC”) since the filing of the 10-K (collectively, the “SEC
Reports”), including, without limitation, the Company’s Quarterly Reports on Forms 10-Q, at the time of filing contained
any untrue statement of a material fact or omitted to state a material fact required to make the statements contained therein, in light
of the circumstances in which they were made, not misleading, except to the extent that such statements have been modified or superseded
by later SEC Reports filed on a non-confidential basis filed prior to the date hereof.

 

6.6             
No Material Adverse Effect. Since December 31, 2021, except as identified and described in the SEC Reports or as described
in Section 2(f) of the Disclosure Schedules, no Material Adverse Effect has occurred with respect to the business, assets, liabilities,
operations, condition (financial or otherwise), or operating results of the Company or its Subsidiaries, taken as a whole.

 

6.7             
Title to Properties. The Company has good and marketable title to all real properties and all other properties and assets
owned by it, in each case free from Liens that would materially affect the value thereof or materially interfere with the use made or
currently planned to be made thereof by them.

 

 

 

    	 	6	 

     

    

 

6.8             
Intellectual Property.

 

(a)         
All Intellectual Property (as defined below) of the Company necessary for the operation of the business as currently conducted
is in material compliance with all legal requirements (including timely filings, proofs and payments of fees) and is valid and enforceable.
No Intellectual Property of either the Company or its Subsidiaries, which is necessary for the conduct of Company’s and such Subsidiary’s
respective businesses as currently conducted or as currently proposed to be conducted, has been or is now involved in any cancellation,
dispute or litigation, and, to the Company’s knowledge, no such action is threatened. No patent of either the Company or its Subsidiaries
has been or is now involved in any interference, reissue, re-examination or opposition proceeding. For purposes of this Agreement, “Intellectual
Property” means all of the following: (A) patents, patent applications, patent disclosures and inventions (whether or not patentable
and whether or not reduced to practice); (B) trademarks, service marks, trade dress, trade names, corporate names, logos, slogans and
Internet domain names, together with all goodwill associated with each of the foregoing; (C) copyrights and copyrightable works; (D) registrations,
applications and renewals for any of the foregoing; and (E) proprietary computer software (including but not limited to data, data bases
and documentation).

 

(b)         
The Company and its Subsidiaries own or have the valid right to use all of the Intellectual Property that is necessary for the
conduct of the Company’s and each Subsidiary’s respective businesses as currently conducted or as currently proposed to be
conducted and for the ownership, maintenance and operation of the Company’s and each Subsidiary’s properties and assets, free
and clear of all Liens, adverse claims or obligations to license all such owned Intellectual Property and trade secrets, confidential
information and know-how (including but not limited to ideas, formulae, compositions, processes, procedures and techniques, research and
development information, computer program code, performance specifications, support documentation, drawings, specifications, designs,
business and marketing plans, and customer and supplier lists and related information) (collectively, “Confidential Information”),
other than licenses entered into in the ordinary course of the Company’s and each Subsidiary’s businesses. The Company and
each Subsidiary have a valid and enforceable right to use all third party Intellectual Property and Confidential Information used or held
for use in the respective businesses of the Company and its Subsidiaries.

 

(c)         
To the knowledge of the Company, the conduct of the Company’s and each Subsidiary’s businesses as currently conducted
does not infringe or otherwise impair or conflict with (collectively, “Infringe”) any Intellectual Property rights
of any third party or any confidentiality obligation owed to a third party, and, to the Company’s knowledge, the Intellectual Property
and Confidential Information of the Company and each Subsidiary which are necessary for the conduct of Company’s and such Subsidiary’s
respective businesses as currently conducted or as currently proposed to be conducted are not being Infringed by any third party. There
is no litigation or order pending or outstanding or, to the Company’s knowledge, threatened, that seeks to limit or challenge or
that concerns the ownership, use, validity or enforceability of any Intellectual Property or Confidential Information of the Company and
its Subsidiaries and the Company’s and each Subsidiary’s use of any Intellectual Property or Confidential Information owned
by a third party, and, to the Company’s knowledge, there is no valid basis for the same.

 

(d)         
The consummation of the transactions contemplated hereby and by the other Note Documents will not result in the alteration, loss,
impairment of or restriction on the Company’s ownership or right to use any of the Intellectual Property or Confidential Information
which is necessary for the conduct of Company’s business as currently conducted or as currently proposed to be conducted.

 

(e)         
The Company has taken reasonable steps to protect the Company’s rights in its Intellectual Property and Confidential Information.
Each employee, consultant and contractor who has had access to Confidential Information which is necessary for the conduct of the Company’s
business as currently conducted or as currently proposed to be conducted has executed an agreement to maintain the confidentiality of
such Confidential Information and has executed appropriate agreements that are substantially consistent with the Company’s standard
forms thereof. Except under confidentiality obligations, there has been no material disclosure of any of the Company’s Confidential
Information to any third party.

 

 

 

    	 	7	 

     

    

 

6.9             
Compliance with Laws. Except as described in the SEC Reports or as set forth in the Disclosure Schedules, there are no actions,
suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its business, property or rights (i) that involve this Agreement or any Note Document or (ii)
as to which, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse
Effect in the Company. Neither the Company nor its Subsidiaries nor any of their respective properties or assets is in violation of, nor
will the continued operation of their properties and assets as currently conducted violate, any law, rule or regulation (including any
applicable environmental law, ordinance, code or approval) or any restrictions of record or agreements affecting the properties, or is
in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violation or default
could reasonably be expected to result in a Material Adverse Effect in the Company or its Subsidiaries. The Company possesses adequate
certificates, authorities or permits issued by appropriate Governmental Authorities necessary to conduct the business now operated by
it, except where such failure has not had and could not reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate, and the Company has not received any notice of proceedings relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company, could reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate.

 

6.10           
Tax Returns. The Company has timely prepared and filed (or timely filed for an extension for) all tax returns required to
have been filed by the Company with all appropriate Governmental Authorities and timely paid all taxes shown thereon or otherwise owed
by it, other than taxes being contested in good faith and for which adequate reserves have been made on the Company’s financial
statements included in the SEC Reports. The charges, accruals and reserves on the books of the Company in respect of taxes for all fiscal
periods are adequate in all material respects, and there are no material unpaid assessments against the Company nor, to the Company’s
knowledge, any basis for the assessment of any additional taxes, penalties or interest for any fiscal period or audits by any federal,
state or local taxing authority except for any assessment which is not material to the Company, taken as a whole. All taxes and other
assessments and levies that the Company is required to withhold or to collect for payment have been duly withheld and collected and paid
to the proper Governmental Authority or third party when due, other than taxes being contested in good faith and for which adequate reserves
have been made on the Company’s financial statements included in the SEC Reports. There are no tax Liens or claims pending or, to
the Company’s knowledge, threatened against the Company or any of its assets or property.

 

6.11           
Rule 506 Compliance. To the Company’s knowledge, neither the Company nor any director, executive officer, other officer
of the Company participating in the offering, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, and any promoter connected with the Company in any capacity on the date hereof (each, an “Insider”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2)(i) or (d)(3) of the Securities
Act. The Company is not disqualified from relying on Rule 506 for any of the reasons stated in Rule 506(d) in connection with the issuance
and sale of the Securities to the Purchaser pursuant to this Agreement. The Company has exercised reasonable care, including without limitation,
conducting a factual inquiry that is appropriate in light of the circumstances, into whether any such disqualification under Rule 506(d)
exists. The Company has furnished to the Purchaser, a reasonable time prior to the date hereof, a description in writing of any matters
relating to the Company and the Insiders that would have triggered disqualification under Rule 506(d) but which occurred before September
23, 2013, in each case, in compliance with the disclosure requirements of Rule 506(e).

 

7.            
Representations and Warranties of the Purchasers. In connection with the transactions contemplated by this Agreement, each
Purchaser, severally and not jointly, hereby represents and warrants to the Company as follows:

 

7.1             
Authorization. Each Purchaser has full power and authority (and, if such Purchaser is an individual, the capacity) to enter
into this Agreement and to perform all obligations required to be performed by it hereunder. This Agreement, when executed and delivered
by each Purchaser, will constitute such Purchaser’s valid and legally binding obligation, enforceable in accordance with its terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and any other laws
of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies.

 

 

    	 	8	 

     

    

 

7.2             
Purchase Entirely for Own Account. Each Purchaser acknowledges that this Agreement is made with such Purchaser in reliance
upon such Purchaser’s representation to the Company, which such Purchaser confirms by executing this Agreement, that the Notes,
and the Conversion Stock (collectively, the “Securities”) will be acquired for investment for such Purchaser’s
own account, not as a nominee or agent (unless otherwise specified on such Purchaser’s signature page hereto), and not with a view
to the resale or distribution of any part thereof, and that such Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the same. By executing this Agreement, each Purchaser further represents that such Purchaser does not have
any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any
third person, with respect to the Securities. If other than an individual, each Purchaser also represents it has not been organized solely
for the purpose of acquiring the Securities.

 

7.3             
Disclosure of Information; Non-Reliance. Each Purchaser acknowledges that it has received all the information it considers
necessary or appropriate to enable it to make an informed decision concerning an investment in the Securities. Each Purchaser further
represents that such Purchaser has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions
of the offering of the Securities. Each Purchaser confirms that the Company has not given any guarantee or representation as to the potential
success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Securities.
In deciding to purchase the Securities, each Purchaser is not relying on the advice or recommendations of the Company and such Purchaser
has made its own independent decision that the investment in the Securities is suitable and appropriate for such Purchaser. Each Purchaser
understands that no federal or state agency has passed upon the merits or risks of an investment in the Securities or made any finding
or determination concerning the fairness or advisability of this investment.

 

7.4            
Investment Experience. Each Purchaser 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 the merits and risks of the investment in the Securities.

 

7.5            
Accredited Investor. Each Purchaser is an “accredited investor” within the meaning of Rule 501 of Regulation
D promulgated under the Securities Act. Each Purchaser agrees to (a) completed the “Accredited Investor Questionnaire” contained
in Exhibit C to this Agreement and (b) furnish any additional information requested by the Company to assure compliance with applicable
U.S. federal and state securities laws in connection with the purchase and sale of the Securities.

 

7.6             
Restricted Securities. Each Purchaser understands that the Securities have not been, and will not be, registered under the
Securities Act or any state securities laws, by reason of specific exemptions under the provisions thereof which depend upon, among other
things, the bona fide nature of the investment intent and the accuracy of each Purchaser’s representations as expressed herein.
Each Purchaser understands that the Securities are “restricted securities” under U.S. federal and applicable state securities
laws and that, pursuant to these laws, such Purchaser must hold the Securities indefinitely unless they are registered with the Securities
and Exchange Commission and registered or qualified by state authorities, or an exemption from such registration and qualification requirements
is available. Each Purchaser acknowledges that the Company has no obligation to register or qualify the Securities for resale and further
acknowledges that, if an exemption from registration or qualification is available, it may be conditioned on various requirements including,
but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which
are outside of such Purchaser’s control, and which the Company is under no obligation, and may not be able, to satisfy.

 

7.7             
No Public Market. Each Purchaser understands that no public market now exists for the Note and that the Company has made
no assurances that a public market will ever exist for the Notes.

 

7.8             
No General Solicitation. Each Purchaser, and its officers, directors, employees, agents, equityholders or partners have
not either directly or indirectly, including through a broker or finder solicited offers for or offered or sold the Securities by means
of any form of general solicitation or general advertising within the meaning of Rule 502 of Regulation D under the Securities Act or
in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act. Each Purchaser acknowledges that
neither the Company nor any other person offered to sell the Securities to it by means of any form of general solicitation or advertising
within the meaning of Rule 502 of Regulation D under the Securities Act or in any manner involving a public offering within the meaning
of Section 4(a)(2) of the Securities Act.

 

 

    	 	9	 

     

    

 

7.9             
Residence. If the Purchaser is an individual, such Purchaser resides in the state or province identified in the address
shown on such Purchaser’s signature page hereto. If the Purchaser is a partnership, corporation, limited liability company or other
entity, such Purchaser’s principal place of business is located in the state or province identified in the address shown on such
Purchaser’s signature page hereto.

 

7.10          
Foreign Investors. If a Purchaser is not a United States person (as defined by Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended), such Purchaser hereby represents that it has satisfied itself as to the full observance of the laws
of its jurisdiction in connection with any invitation to subscribe for the Securities or any use of this Agreement, including (a) the
legal requirements within its jurisdiction for the purchase of the Securities; (b) any foreign exchange restrictions applicable to
such purchase; (c) any governmental or other consents that may need to be obtained; and (d) the income tax and other tax consequences,
if any, that may be relevant to the purchase, holding, conversion, redemption, sale, or transfer of the Securities. Each such Purchaser’s
subscription and payment for and continued beneficial ownership of the Securities will not violate any applicable securities or other
laws of such Purchaser’s jurisdiction. Each such Purchaser acknowledges that the Company has taken no action in foreign jurisdictions
with respect to the Securities.

 

8.            
Miscellaneous.

 

8.1             
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement will inure to the
benefit of, and be binding upon, the respective successors and assigns of the parties; provided, however, that the Company may not assign
its obligations under this Agreement without the written consent of the Requisite Noteholders. This Agreement is for the sole benefit
of the parties hereto and their respective successors and permitted assigns, and nothing herein, express or implied, is intended to or
will confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

8.2             
Choice of Law. This Agreement and the Notes, and all matters arising out of or relating to this Agreement, whether sounding
in contract, tort, or statute will be governed by and construed in accordance with the internal laws of the State of Delaware, without
giving effect to the conflict of laws provisions thereof to the extent such principles or rules would require or permit the application
of the laws of any jurisdiction other than those of the State of Delaware.

 

8.3             
Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which
together will be deemed to be one and the same agreement. Counterparts may be delivered via facsimile, email (including PDF or www.docusign.com)
or other transmission method, and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

8.4             
Titles and Subtitles. The titles and subtitles used in this Agreement are included for convenience only and are not to be
considered in construing or interpreting this Agreement.

 

8.5             
Notices. All notices and other communications given or made pursuant hereto will be in writing and will be deemed effectively
given: (a) upon personal delivery to the party to be notified; (b) when sent by email or confirmed facsimile; (c) five (5) days after
having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications will be sent to the
respective parties at the addresses shown on the signature pages hereto (or to such email address, facsimile number or other address as
subsequently modified by written notice given in accordance with this Section 8.5).

 

8.6             
No Finder’s Fee. Each party represents that it neither is nor will be obligated to pay any finder’s fee, broker’s
fee or commission in connection with the transactions contemplated by this Agreement. Each Purchaser agrees to indemnify and to hold the
Company harmless from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising
out of the transactions contemplated by this Agreement (and the costs and expenses of defending against such liability or asserted
liability) for which each Purchaser or any of its officers, employees or representatives is responsible. The Company agrees to indemnify
and hold each Purchaser harmless from any liability for any commission or compensation in the nature of a finder’s or broker’s
fee arising out of the transactions contemplated by this Agreement (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

 

    	 	10	 

     

    

 

8.7             
Expenses. Each party will pay all costs and expenses that it incurs with respect to the negotiation, execution, delivery
and performance of this Agreement.

 

8.8             
Attorneys’ Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement,
the prevailing party will be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

 

8.9             
Entire Agreement; Amendments and Waivers. This Agreement, the Notes and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof. The Company’s
agreements with each of the Purchasers are separate agreements, and the sales of the Notes to each of the Purchasers are separate sales.
Notwithstanding the foregoing, any term of this Agreement or the Notes may be amended and the observance of any term of this Agreement
or the Notes may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent
of the Company and the Requisite Noteholders. Any waiver or amendment effected in accordance with this Section 8.9 will be binding upon
each party to this Agreement and each holder of a Note purchased under this Agreement then outstanding and each future holder of all such
Notes.

 

8.10         
Effect of Amendment or Waiver. Each Purchaser acknowledges and agrees that by the operation of Section 8.9 hereof, the Requisite
Noteholders will have the right and power to diminish or eliminate all rights of such Purchaser under this Agreement and each Note issued
to such Purchaser.

 

8.11          
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible
to that under the provisions rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement
for such provisions, such provisions will be excluded from this Agreement and the balance of the Agreement will be interpreted as if such
provisions were so excluded and this Agreement will be enforceable in accordance with its terms.

 

8.12         
Transfer Restrictions.

 

(a)              
“Market Stand-Off” Agreement. Each Purchaser hereby agrees that it will not, without the prior written consent
of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s firm commitment
underwritten public offering under the Securities Act pursuant to which the Common Stock will be listed on a national securities exchange
(such offering, the “IPO”), and ending on the date specified by the Company and the managing underwriter(s) (such period
not to exceed one hundred eighty (180) days, or such other period as may be requested by the Company or an underwriter to accommodate
regulatory restrictions): (A) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option
or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any
Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock (whether such
units or any such securities are then owned by the Purchaser or are thereafter acquired); or (B) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities; whether any such transaction
described in clause (A) or (B) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing
provisions of this Section 8.12(a) will: (x) apply only to the IPO and will not apply to the sale of any shares to an underwriter pursuant
to an underwriting agreement; (y) not apply to the transfer of any units to any trust for the direct or indirect benefit of the Purchaser
or the immediate family of the Purchaser, provided that the trustee of the trust agrees to be bound in writing by the restrictions set
forth herein, and provided further that any such transfer will not involve a disposition for value; and (z) be applicable to the Purchasers
only if all officers and directors of the Company are subject to the same restrictions and the Company uses commercially reasonable efforts
to obtain a similar agreement from all members individually owning more than 5% of the outstanding Common Stock. Notwithstanding anything
herein to the contrary (including, for the avoidance of doubt, Section), the underwriters in connection with the IPO are intended third-party
beneficiaries of this Section 8.12(a) and will have the right, power and authority to enforce the provisions hereof as though they were
a party hereto. Each Purchaser further agrees to execute such agreements as may be reasonably requested by the underwriters in connection
with the IPO that are not inconsistent with this Section 8.12(a) or that are necessary to give further effect thereto.

 

 

    	 	11	 

     

    

 

In order to enforce
the foregoing covenant, the Company may impose stop transfer instructions with respect to each Purchaser’s registrable securities
of the Company (and the Company securities of every other person subject to the foregoing restriction) until the end of such period. Each
Purchaser agrees that a legend reading substantially as follows will be placed on all certificates representing all of such Purchaser’s
registrable securities of the Company (and the Company securities of every other person subject to the restriction contained in this Section
8.12(a)):

 

THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD BEGINNING ON THE EFFECTIVE DATE OF THE COMPANY’S REGISTRATION STATEMENT FILED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES,
A COPY OF WHICH MAY BE OBTAINED AT THE COMPANY’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SECURITIES.

 

(b)              
Further Limitations on Disposition. Without in any way limiting the representations and warranties set forth in this Agreement,
each Purchaser agrees not to make any disposition of all or any portion of the Securities unless and until the transferee has agreed in
writing for the benefit of the Company to make the representations and warranties set out in Section 6 and the undertaking set out in
Section 8.12(a) of this Agreement and:

 

(i)                
there is then in effect a registration statement under the Securities Act covering such proposed disposition, and such disposition
is made in connection with such registration statement; or

 

(ii)             
such Purchaser has (A) notified the Company of the proposed disposition; (B) furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition; and (C) if requested by the Company, furnished the Company with an opinion of
counsel reasonably satisfactory to the Company that such disposition will not require registration under the Securities Act.

 

Each Purchaser agrees
that it will not make any disposition of any of the Securities to the Company’s competitors, as determined in good faith by the
Company.

 

(c)              
Legends. Each Purchaser understands and acknowledges that the Securities may bear the following legend:

 

THIS INSTRUMENT AND THE SECURITIES
ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
THE ACT.

 

8.13         
Exculpation among Purchasers. Each Purchaser acknowledges that it is not relying upon any person, firm, corporation or equityholder,
other than the Company and its officers and directors in their capacities as such, in making its investment or decision to invest in the
Company. Each Purchaser agrees that no other Purchaser, nor the controlling persons, officers, directors, partners, agents, equityholders
or employees of any other Purchaser, will be liable for any action heretofore or hereafter taken or not taken by any of them in connection
with the purchase and sale of the Securities.

 

8.14         
Acknowledgment. For the avoidance of doubt, it is acknowledged that each Purchaser will be entitled to the benefit of all
adjustments in the number or amount of securities of the Company as a result of any splits, recapitalizations, combinations or other similar
transactions affecting the Company’s securities underlying the Conversion Stock that occur prior to the conversion of the Notes.

 

8.15         
Further Assurances. From time to time, each of the parties agrees to execute and deliver such additional documents and to
provide such additional information as may reasonably be required to carry out the terms of this Agreement and the Notes and any agreements
executed in connection herewith or therewith.

 

 

    	 	12	 

     

    

 

8.16         
Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION
HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY
FURTHER REPRESENTS AND WARRANTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

8.17         
Company Non-Waivers. Except as otherwise specifically provided herein, the Company, does not waive presentment, demand,
notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement
of the Notes.

 

[SIGNATURE PAGES FOLLOW]

 

 

    	 	13	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Convertible Note Purchase Agreement as of the date set forth above.

 

 

 

MOSAIC IMMUNOENGINEERING, INC. 

 

 

By:__________________________________ 

Name: Steven King 

Title: President and Chief Executive Officer

 

	 	Address:	Mosaic ImmunoEngineering, Inc. 

9114 Adams Ave., #202 

Huntington Beach, CA 92646

 

 

 

 

 

    	 	 	 

     

    

 

IN WITNESS WHEREOF, the parties hereto have executed
this Convertible Note Purchase Agreement as of the date set forth above.

 

 

 

__________________________________ 

Name: [PURCHASER NAME]

 

 

Address: 

[STREET] 

[CITY], [STATE] [ZIP CODE]

 

 

 

 

 

Principal Amount $________________

 

 

 

 

    	 	 	 

     

    

 

SCHEDULE OF PURCHASERS

 

 

Initial Closing Date: [MONTH] [DAY], 2022 

	Purchaser	Principal Amount of Promissory Note
	[NAME]	
    [PRINCIPAL AMOUNT].00

     

     

	TOTAL	[TOTAL AMOUNT].00

 

 

 

Subsequent Closing Date: [MONTH] [DAY], 2022

	Purchaser	Principal Amount of Promissory Note
	[NAME]	
    [PRINCIPAL AMOUNT].00

     

     

	TOTAL	[TOTAL AMOUNT].00

 

 

 

 

    	 	 	 

     

    

 

EXHIBIT A

 

Form of Convertible Promissory Note

 

THIS INSTRUMENT AND THE SECURITIES ISSUABLE UPON
THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
OR UPON RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

 

CONVERTIBLE PROMISSORY NOTE

 

 

	No. CN-[NUMBER]	Date of Issuance
	 	 
	$[PRINCIPAL AMOUNT]	[MONTH] [DAY], 2022

 

 

FOR VALUE RECEIVED,
Mosaic ImmunoEngineering Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of [PURCHASER
NAME] (the “Noteholder”), the principal sum of $[PRINCIPAL AMOUNT], together with interest thereon from the date of
this Note. Interest will accrue at a simple rate of eight percent (8.00%) per annum. Unless earlier converted into Conversion Stock pursuant
to Section 4 of that certain Convertible Note Purchase Agreement, dated [DATE], 2022, by and among the Company, the Noteholder and the
other parties thereto (the “Purchase Agreement”), the principal and accrued interest of this Note will be due and payable
by the Company at Maturity.

 

This Note is one of a series
of Notes issued pursuant to the Purchase Agreement, and shall be governed and construed in accordance with the terms and provisions thereof.
Capitalized terms not defined herein will have the meanings set forth in the Purchase Agreement.

 

1.           
Payment. The entire amount of this Note then outstanding and not converted into Conversion Stock shall be payable in full, together
with any and all accrued interest thereon, at Maturity.

 

(a)               
All payments will be made in lawful money of the United States of America at the principal office of the Noteholder, or at such
other place as the Noteholder may from time to time designate in writing to the Company. Payment will be credited first to accrued interest
due and payable, with any remainder applied to principal. Prepayment of principal, together with accrued interest, may not be made without
the written consent of the Requisite Noteholders, except in the event of a Corporate Transaction (as set forth in Section 4.2 of the Purchase
Agreement).

 

(b)              
Payment on Non-Business Days. Whenever any payment to be made shall be due on a Saturday, Sunday, federal or state holiday, or
a date on which banks in the State of California are authorized or required to be closed, such payment may be made on the next succeeding
business day.

 

2.           
Security. This Note is a general unsecured obligation of the Company.

 

3.           
Conversion of the Notes. This Note and any amounts due hereunder will be convertible into Conversion Stock in accordance
with the terms of Section 4 of the Purchase Agreement.

 

4.           
Amendments and Waivers; Resolutions of Dispute; Notice. The amendment or waiver of any term of this Note, the resolution
of any controversy or claim arising out of or relating to this Note and the provision of notice among the Company and the Noteholder will
be governed by the terms of the Purchase Agreement.

 

 

    	 	 	 

     

    

 

5.           
Successors and Assigns. This Note applies to, inures to the benefit of, and binds the respective successors and assigns
of the parties hereto; provided, however, that, except in connection with a Corporate Transaction, the Company may not assign its obligations
under this Note without the written consent of the Requisite Noteholders. Any transfer of this Note may be effected only pursuant to the
Purchase Agreement and by surrender of this Note to the Company and reissuance of a new note to the transferee. The Noteholder and any
subsequent holder of this Note receives this Note subject to the foregoing terms and conditions, and agrees to comply with the foregoing
terms and conditions for the benefit of the Company and any other Purchasers (or their respective successors or assigns).

 

6.           
Officers and Directors not Liable. In no event will any officer or Director of the Company be liable for any amounts due
and payable pursuant to this Note.

 

7.           
Limitation on Interest. In no event will any interest charged, collected or reserved under this Note exceed the maximum
rate then permitted by applicable law, and if any payment made by the Company under this Note exceeds such maximum rate, then such excess
sum will be credited by the Noteholder as a payment of principal.

 

8.           
Choice of Law. This Note, and all matters arising out of or relating to this Note, whether arising in contract, tort, or
statute shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflict
of laws provisions thereof to the extent such principles or rules would require or permit the application of the laws of any jurisdiction
other than those of the State of Delaware.

 

9.           
Approval. The Company hereby represents that its board of directors, in the exercise of its fiduciary duty, has approved
the Company’s execution of this Note based upon a reasonable belief that the principal provided hereunder is appropriate for the
Company after reasonable inquiry concerning the Company’s financing objectives and financial situation. In addition, the Company
hereby represents that it intends to use the principal of this Note primarily for the operations of its business, and not for any personal,
family or household purpose.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

    	 	 	 

     

    

 

 

IN WITNESS WHEREOF, the Company has executed this
Note as of the date set forth above.

 

MOSAIC IMMUNOENGINEERING, INC.

 

By:___________________________________

Name:

Title:

 

 

 

 

 

 

 

    	 	 	 

     

    

 

EXHIBIT C

 

ACCREDITED INVESTOR QUESTIONNAIRE

 

In order for the Company to offer and sell the
Notes in conformance with state and federal securities laws, the following information must be obtained regarding your investor status.
Please check each category applicable to you as a Purchaser of the Notes.

 

	_____	 	A bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; 
	 	 	 
	_____	 	A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;
	 	 	 
	_____	 	An investment adviser registered pursuant to Section 203 of the Investment Advisers Act of 1940 (the “Advisors Act”) or registered pursuant to the laws of a state;
	 	 	 
	_____	 	An investment adviser relying on the exemption from registering with the SEC under Section 203(l) or (m) of the Advisers Act;
	 	 	 
	_____	 	An insurance company as defined in Section 2(a)(13) of the Securities Act;
	 	 	 
	_____	 	An investment company registered under the Investment Company Act of 1940 (the “1940 Act”) or a business development company as defined in Section 2(a)(48) of the 1940 Act;
	 	 	 
	_____	 	A Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;
	 	 	 
	_____	 	A Rural Business Investment Company as defined in section 384A of the Consolidated Farm and Rural Development Act;
	 	 	 
	_____	 	A plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;
	 	 	 
	_____	 	An employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
	 	 	 
	_____	 	A private business development company as defined in Section 202(a)(22) of the Advisers Act;
	 	 	 
	_____	 	An organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, Massachusetts or similar business trust,  partnership, or limited liability company not formed for the specific purpose of acquiring the Notes, with total assets in excess of $5,000,000;
	 	 	 
	_____	 	A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Notes, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company;

 

 

    	 	 	 

     

    

 

	 	 	 
	_____	 	A natural person whose individual net worth, or joint net worth with that person’s spouse or spousal equivalent (the term “spousal equivalent” means a cohabitant occupying a relationship generally equivalent to that of a spouse), at the time of his/her purchase exceeds $1,000,000, excluding (a) the value of his/her primary residence as an asset and (b) any debt securing such residence as a liability, except to the extent that such indebtedness is in excess of the estimated fair market value of such residence (joint net worth can be the aggregate net worth of the investor and spouse or spousal equivalent and assets need not be held jointly to be included in the calculation);
	 	 	 
	_____	 	A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse or spousal equivalent in excess of $300,000, in each of those years, and has a reasonable expectation of reaching the same income level in the current year;
	 	 	 
	_____	 	An executive officer or director of the Company;
	 	 	 
	_____	 	An entity in which all of the equity owners qualify under any of the above subparagraphs.  If the undersigned belongs to this investor category only, the undersigned certifies that it has verified the accredited investor status of each of its equity owners within the past 12 months;
	 	 	 
	_____	 	An entity of a type not listed in items (1) through (13) or (17), not formed for the specific purpose of acquiring the securities offered, owning investments in excess of $5,000,000;
	 	 	 
	_____	 	A natural person holding in good standing one or more professional certificates or designations or credentials from an accredited educational institution that the SEC has designated as qualifying an individual for accredited investor status including but not limited to the following certifications administered by FINRA: Licensed General Securities Representative (Series 7), Licensed Investment Adviser Representative (Series 65), and Licensed Private Securities Offerings Representative (Series 82);
	 	 	 
	_____	 	A natural person who is a “knowledgeable employee,” as defined in Rule 3c-5(a)(4) under the 1940 Act;
	 	 	 
	_____	 	A “family office,” as defined in Rule 202(a)(11)(G)-1 under the Advisers Act with assets under management in excess of $5,000,000, that is not formed for the specific purpose of acquiring the interest and whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment;
	 	 	 
	_____	 	A “family client,” as defined in Rule 202(a)(11)(G)-1 under the Advisers Act, of a family office meeting the requirements of item 21 above and whose prospective investment in the issuer is directed by such family office.

 

 

A.    FOR EXECUTION BY
AN INDIVIDUAL:

	
     

     

    Date: [Month] [Day], 2022

     
	
     

     

    By: _____________________________________ 

    Print Name:

     

 

B.    FOR EXECUTION BY
AN ENTITY:

 

	 	Entity Name: ______________________________
	
     

    Date: [Month] [Day], 2022

     
	
     

    By: _____________________________________ 

    Print Name: 

    Title:

 

 

    	 	 	 

     

    

 

 

 C.   ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

 

	 	Entity Name: ______________________________
	
     

    Date: [Month] [Day], 2022

     
	
     

    By: _____________________________________ 

    Print Name: 

    Title:

 

 

	 	Entity Name: ______________________________
	
     

    Date: [Month] [Day], 2022

     
	
     

    By: _____________________________________ 

    Print Name: 

    Title:Document

EXHIBIT 4.1

DESCRIPTION OF CAPITAL STOCK OF
SABRA HEALTH CARE REIT, INC.

The following is a summary of the material terms of our capital stock as set forth in our Articles of Amendment and Restatement (our “charter) and our Amended and Restated Bylaws (our “bylaws”), which govern the rights of holders of our capital stock. The following summary does not purport to be complete and is subject to and qualified in its entirety by reference to applicable provisions of the Maryland General Corporation Law (the “MGCL”) and to our charter and bylaws. For a complete description, we refer to the MGCL, our charter and our bylaws. Copies of our charter and bylaws are included as exhibits to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part.

General

Our charter provides that we may issue up to 500,000,000 shares of common stock, $0.01 par value per share, and up to 10,000,000 shares of preferred stock, $0.01 par value per share. As of December 31, 2021, 230,398,655 shares of common stock were issued and outstanding, and no shares of preferred stock were issued and outstanding. Under Maryland law, stockholders are not generally liable for our or our subsidiaries’ debts or obligations solely as a result of their status as stockholders. 

Common Stock 

All issued and outstanding shares of common stock are fully paid and nonassessable. Subject to the preferential rights of any other class or series of stock and the provisions of our charter that restrict transfer and ownership of our stock, the holders of shares of our common stock generally are entitled to receive dividends on such stock out of assets legally available for distribution to our stockholders when, as and if authorized by our board of directors and declared by us. The holders of shares of common stock are also entitled to share ratably in our net assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up, after payment of, or adequate provision for, all of our known debts and liabilities. 

Subject to the rights of any other class or series of our stock and the provisions of our charter that restrict the transfer and ownership of our stock, each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of the stockholders, including the election of directors, and the holders of shares of our common stock possess the exclusive voting power. 

Holders of shares of our common stock generally have no preference, conversion, exchange, sinking fund, redemption or appraisal rights and have no preemptive rights to subscribe for any of our securities. Subject to the provisions of our charter that restrict transfer and ownership of our stock, all shares of common stock have equal dividend, liquidation and other rights. 

Preferred Stock 

Under our charter, our board of directors may from time to time establish and cause us to issue one or more classes or series of preferred stock. Prior to the issuance of shares of each class or series of preferred stock, our board of directors will be required by the MGCL and our charter to adopt resolutions and file articles supplementary with the State Department of Assessments and Taxation of Maryland. The articles supplementary will fix for each class or series the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms and conditions of redemption, including, but not limited to, the following: 
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•the title, designation and stated value of the preferred stock; 
•the number of shares constituting each class or series; 
•voting rights; 
•rights and terms of redemption (including sinking fund provisions); 
•dividend rights and rates; 
•dissolution; 
•terms concerning the distribution of assets; 
•conversion or exchange terms; 
•redemption prices; and 
•liquidation preferences. 
 
All shares of preferred stock will, when issued in exchange for the consideration therefor, be fully paid and nonassessable and, unless otherwise provided for in the terms of a particular class or series of preferred stock, will not have any preemptive or similar rights. Our board of directors, without stockholder approval, could authorize the issuance of shares of preferred stock with terms and conditions that could have the effect of delaying, deferring or preventing a takeover or other transaction that might involve a premium price for holders of the shares or which holders might believe to be in their best interests. Additionally, the issuance of preferred stock may have the effect of decreasing the market price of our common stock and may adversely affect the voting and other rights of the holders of our common stock. 

We will set forth in the applicable prospectus supplement relating to the class or series of preferred stock being offered the specific terms of each class or series of our preferred stock, including the price at which the preferred stock may be purchased, the number of shares of preferred stock offered, and the terms, if any, on which the preferred stock may be convertible into common stock or exchangeable for other securities. 

Power to Reclassify Unissued Shares 

Our board of directors has the power, without stockholder approval, to amend our charter to increase or decrease the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series, to authorize us to issue additional authorized but unissued shares of common stock or preferred stock and to classify and reclassify any unissued shares of common stock or preferred stock into other classes or series of stock, including one or more classes or series of common stock or preferred stock that have priority with respect to voting rights, dividends or upon liquidation over shares of common stock. Prior to the issuance of shares of each new class or series, our board of directors will be required by the MGCL and our charter to set, subject to the provisions of our charter regarding restrictions on transfer and ownership of stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, and terms and conditions of redemption for each class or series of capital stock.

Restrictions on Transfer and Ownership of Stock 

In order for us to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”), among other requirements, our stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be a REIT has been made) or during a proportionate part of a shorter taxable year. Also, not more than 50% of the value of the outstanding shares of our stock may be owned, directly or 
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indirectly, by five or fewer individuals (as defined in the Code to include certain entities such as qualified pension plans) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). In addition, rent from related-party tenants (generally, a tenant of a REIT that is 10% or more owned, actually or constructively, by the REIT, or that is a 10% owner of the REIT) is not qualifying income for purposes of the gross income tests under the Code. 

Our charter contains restrictions on the transfer and ownership of our stock. The relevant sections of our charter provide that, subject to the exceptions described below, no person or entity may beneficially own, or be deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.9% in value or number of shares, whichever is more restrictive, of our outstanding common stock or more than 9.9% in value of our outstanding stock. In addition, classes of shares other than common stock may be subject to ownership limitations set forth in the articles supplementary relating to such shares. These limits are collectively referred to as the “ownership limits.” The constructive ownership rules under the Code are complex and may cause stock owned actually or constructively by a group of related individuals and/or entities to be owned constructively by one individual or entity. As a result, the acquisition of less than 9.9% of our outstanding common stock or less than 9.9% of our outstanding stock, or the acquisition of an interest in an entity that owns, actually or constructively, our stock, could, nevertheless, cause the acquiror, or another individual or entity, to own constructively shares of our outstanding stock in excess of the ownership limits. 

Our board of directors may, upon receipt of certain representations, covenants and undertakings and in its sole and absolute discretion, prospectively or retroactively, exempt a person from the ownership limits or establish a different limit on ownership, or an excepted holder limit, for a particular stockholder if the stockholder’s ownership in excess of the ownership limits would not result in our being “closely held” under Section 856(h) of the Code or otherwise failing to qualify as a REIT. As a condition of granting a waiver of the ownership limits or creating an excepted holder limit, our board of directors may, but is not required to, require an Internal Revenue Service ruling or opinion of counsel satisfactory to our board of directors (in its sole discretion) as it may deem necessary or advisable to determine or ensure our status as a REIT. Our board of directors may only reduce any excepted holder limit with the written consent of such excepted holder at any time or pursuant to the terms and conditions of the agreements entered into with the stockholder in connection with the establishment of the excepted holder limit. 

Our board of directors may also, from time to time, increase or decrease the ownership limits unless, after giving effect to the increased or decreased ownership limits, five or fewer persons could beneficially own, in the aggregate, more than 49.9% in number or value of our outstanding stock or we would otherwise fail to qualify as a REIT. Decreased ownership limits do not apply to any person or entity whose ownership of stock is in excess of the decreased ownership limits until the person or entity’s ownership of stock equals or falls below the decreased ownership limits, but any further acquisition of stock would be in violation of the decreased ownership limits. 

Our charter also prohibits: 
•any person from beneficially or constructively owning shares of our stock to the extent such beneficial or constructive ownership would result in our being “closely held” under Section 856(h) of the Code (without regard to whether the ownership interest is held during the last half of a taxable year), or otherwise cause us to fail to qualify as a REIT; 
•any transfer of shares of our stock if the transfer would result in shares of our stock being beneficially owned by fewer than 100 persons; 
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•any person from beneficially or constructively owning shares of our stock to the extent such beneficial or constructive ownership would result in our constructively owning 9.9% or more of the ownership interests in a tenant within the meaning of Section 856(d)(2)(B) of the Code; and 
•any person from constructively owning shares of our stock to the extent such constructive ownership would cause any “eligible independent contractor” that operates a “qualified health care property” on behalf of a “taxable REIT subsidiary” of ours (as such terms are defined in Sections 856(d)(9)(A), 856(e)(6)(D)(i) and 856(l) of the Code, respectively) to fail to qualify as such.  

Any person who acquires or attempts or intends to acquire beneficial or constructive ownership of shares of our stock that will or may violate the ownership limits, or any of the other restrictions on transfer and ownership of stock, and any person who is the intended transferee of shares of stock that are transferred to the charitable trust described below, will be required to give us immediate written notice and, in the case of a proposed transaction, at least 15 days’ prior written notice and to provide us with such other information as we may request in order to determine the effect of the transfer on our status as a REIT. The provisions of our charter regarding restrictions on transfer and ownership of stock do not apply if our board of directors determines that it is no longer in our best interests to attempt to qualify, or to continue to qualify, as a REIT or that compliance is no longer required in order for us to qualify as a REIT. 

Any attempted transfer of our stock which, if effective, would result in our stock being beneficially owned by fewer than 100 persons will be null and void and the intended transferee shall acquire no rights in such shares of stock. Any attempted transfer of our stock which, if effective, would violate any of the other restrictions described above will cause the number of shares causing the violation (rounded up to the nearest whole share) to be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries, and the proposed transferee will not acquire any rights in the shares. We will appoint the trustee of the trust, who will be unaffiliated with us and any proposed transferee of the shares. The automatic transfer will be deemed to be effective as of the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the trust. Shares of our stock held in the trust will be issued and outstanding shares. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable restrictions on transfer and ownership of stock, then the transfer of the shares will be null and void. 

The proposed transferee shall have no rights in the shares held by the trust. The proposed transferee will not benefit economically from ownership of any shares of stock held in the trust, will have no rights to dividends or other distributions and no rights to vote or other rights attributable to the shares of stock held in the trust. The trustee of the trust will exercise all voting rights and receive all dividends and other distributions with respect to shares held in the trust for the exclusive benefit of the charitable beneficiary of the trust. Any dividend or other distribution paid prior to our discovery that shares have been transferred to a trust as described above must be repaid by the recipient to the trustee upon demand and any dividend or other distribution authorized but unpaid shall be held in trust for the charitable beneficiary. Subject to Maryland law, effective as of the date that the shares have been transferred to the trust, the trustee will have the authority, at the trustee’s sole discretion, to rescind as void any vote cast by a proposed transferee prior to our discovery that the shares have been transferred to the trust and to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary of the trust. However, if we have already taken irreversible corporate action, then the trustee may not rescind and recast the vote. 

If our board of directors or a committee thereof or other designee if permitted by the MGCL determines in good faith that a proposed transfer or other event has taken place that violates the restrictions on transfer 
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and ownership of stock set forth in our charter or that a person intends to acquire or has attempted to acquire beneficial or constructive ownership in violation of our ownership limits, then our board of directors or such committee or other designee if permitted by the MGCL shall take such action as it deems advisable to refuse to give effect to or to prevent such transfer or other event, including, but not limited to, causing us to redeem shares of stock, refusing to give effect to the transfer on our books or instituting proceedings to enjoin the transfer; provided, however, that any transfer or attempted transfer or other event in violation of the above restrictions shall automatically result in the transfer to the trust described above, and, where applicable, such transfer or other event shall be null and void as provided above irrespective of any action or non-action by our board of directors or any committee or designee thereof. 

Shares of stock transferred to the trustee will be deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (i) the price paid per share in the transaction that resulted in such transfer to the charitable trust (or, in the case of a devise or gift, the market price of such stock at the time of such devise or gift) and (ii) the market price of such stock on the date we, or our designee, accepts such offer. We will have the right to accept such offer until the trustee has sold the shares held in the charitable trust. Upon a sale to us, the interest of the charitable beneficiary in the shares sold will terminate and the trustee will be required to distribute the net proceeds of the sale to the proposed transferee and any distributions held by the trustee with respect to such shares to the charitable beneficiary. We may reduce the amount payable to the proposed transferee by the amount of dividends and distributions that have been paid to the proposed transferee and are owed by the proposed transferee to the trustee. We may pay the amount of such reduction to the trustee for the benefit of the charitable beneficiary. 

If we do not buy the shares, the trustee will be required, within 20 days of receiving notice from us of a transfer of shares to the trust, to sell the shares to a person or entity designated by the trustee who could own the shares without violating the ownership limits, or the other restrictions on transfer and ownership of stock. Upon such sale, the interest of the charitable beneficiary in the shares of stock sold shall terminate and the trustee shall distribute the net proceeds of the sale to the proposed transferee and to the charitable beneficiary. After selling the shares, the trustee will be required to distribute to the proposed transferee an amount equal to the lesser of (i) the price paid by the proposed transferee for the shares or, if the proposed transferee did not give value for the shares in connection with the event causing the shares to be held by the trust (e.g., in the case of a gift, devise or other such transaction), the market price of such stock on the day of the event causing the shares to be held by the trust and (ii) the price per share received by the trustee (net of any commissions and other expenses) from the sale or other disposition of the shares. The trustee may reduce the amount payable to the proposed transferee by the amount of dividends and distributions that have been paid to the proposed transferee and are owed by the proposed transferee to the trustee. Any net sales proceeds in excess of the amount payable to the proposed transferee will be paid immediately to the charitable beneficiary. If the proposed transferee sells such shares prior to the discovery that such shares have been transferred to the trustee, then (i) such shares shall be deemed to have been sold on behalf of the trust and (ii) to the extent that the proposed transferee received an amount for such shares that exceeds the amount that such proposed transferee would have received if such shares had been sold by the trustee, such excess shall be paid to the trustee upon demand. 

Any certificates representing shares of our stock will bear a legend referring to the restrictions on transfer and ownership described above or state that we will furnish a full statement of the above restrictions on request and without charge. 

Every owner of 5% or more (or such lower percentage as required by the Code or the regulations promulgated thereunder) of our stock, in number or in value, within 30 days after the end of each taxable 
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year, will be required to give us written notice stating the person’s name and address, the number of shares of each class and series of stock that the person beneficially owns, a description of the manner in which the shares are held and any additional information that we request in order to determine the effect, if any, of the person’s beneficial ownership on our status as a REIT and to ensure compliance with the ownership limits. In addition, any beneficial owner or constructive owner of shares of our stock and any person or entity (including the stockholder of record) who holds shares of our stock for a beneficial owner or constructive owner will be required to, on request, disclose to us in writing such information as we may request in order to determine the effect, if any, of the stockholder’s actual and constructive ownership of stock on our status as a REIT and to comply with the requirements of any governmental or taxing authority. 

The restrictions on transfer and ownership described above could have the effect of delaying, deferring or preventing a change of control in which holders of shares of our stock might receive a premium for their shares over the then-prevailing price. 

Certain Provisions of Maryland Law and of Our Charter and Bylaws 

The following paragraphs summarize certain provisions of our charter and bylaws, as well as selected provisions of the MGCL. 

Board of Directors 

Our charter and bylaws provide that the number of directors of our company may be established by our board of directors, but may not be fewer than the minimum number required by the MGCL nor more than eight. Currently, we have eight directors. We have elected to be subject to certain provisions of the MGCL, as a result of which our board of directors has the exclusive power to fill vacancies on the board of directors. 

Each of our directors is elected by our stockholders to serve until the next annual meeting of stockholders and until a successor is duly elected and qualifies. In order for any incumbent director to become a nominee of our board of directors for further service on our board of directors, such person must submit an irrevocable resignation, which will only become effective as described below. Under our charter, there is no cumulative voting in the election of our board of directors. Instead, our bylaws require that, in uncontested elections, each director be elected by the majority of votes cast with respect to such director. This means that the number of shares voted “for” a director nominee must exceed the number of shares affirmatively voted “against” that nominee in order for that nominee to be elected. If a nominee who is an incumbent director does not receive a majority of the votes cast in an uncontested election, the nominating and governance committee of our board of directors shall consider the facts and circumstances relating to the election and the resignation submitted by such nominee, and recommend to our board of directors, within sixty (60) days following certification of the election results, whether such resignation should be accepted or rejected or whether other action should be taken. The board of directors shall act on the resignation within ninety (90) days following certification of the election results, taking into account the committee’s recommendation, and publicly disclose (by a press release and filing an appropriate disclosure with the Securities and Exchange Commission) its decision regarding the resignation. The committee in making its recommendation and the board of directors in making its decision each may consider any factors and other information that they consider appropriate and relevant. 

Removal of Directors 

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Our charter provides that, subject to the rights of holders of any class or series of stock separately entitled to elect or remove one or more directors, a director may be removed with or without cause, by the affirmative vote of at least a majority of the votes entitled to be cast generally in the election of directors. 

Amendments to Our Charter and Bylaws and Approval of Extraordinary Actions 

Under Maryland law, a Maryland corporation generally cannot amend its charter, merge, convert, consolidate, sell all or substantially all of its assets, engage in a statutory share exchange, dissolve or engage in similar transactions outside the ordinary course of business unless the action is advised by the board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for approval of these actions by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter provides that the affirmative vote of at least a majority of the votes entitled to be cast on the matter will be required to approve all charter amendments or extraordinary actions. Also, Maryland law permits a Maryland corporation to transfer all or substantially all of its assets without the approval of the stockholders of the corporation to one or more persons if 90% or more of the equity interests of the person or persons are owned, directly or indirectly, by the corporation. 

Our bylaws may be altered, amended or repealed, in whole or in part, and new bylaws may be adopted by (i) our board of directors or (ii) our stockholders with the affirmative vote of a majority of the votes entitled to be cast on the matter by stockholders entitled to vote generally in the election of directors. 

Business Combinations 

Under the MGCL, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. An interested stockholder is defined as: 
•any person who beneficially owns, directly or indirectly, 10 percent or more of the voting power of the corporation’s outstanding voting stock; or 
•an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of the then outstanding voting stock of the corporation. 

A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which such person otherwise would have become an interested stockholder. However, in approving a transaction, a board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms and conditions determined by the board of directors. 

After the five-year prohibition, any business combination between the Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least: 
•eighty percent of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and 
•two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder, voting together as a single class. 
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These supermajority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under the MGCL, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares. The statute provides various exemptions from its provisions, including for business combinations that are exempted by the board of directors before the time that the interested stockholder becomes an interested stockholder. Our board of directors has not opted out of the business combination provisions of the MGCL, and consequently, the five-year prohibition and the supermajority vote requirements will apply to business combinations between us and any interested stockholder. 

We are subject to the business combination provisions described above. However, our board of directors may elect to opt out of the business combination provisions at any time. 

Control Share Acquisitions 

Maryland law provides that issued and outstanding control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by the stockholders by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by employees who are directors of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to, directly or indirectly, exercise voting power in electing directors within one of the following ranges of voting power: 
•one-tenth or more but less than one-third, 
•one-third or more but less than a majority, or 
•a majority or more of all voting power. 

Control shares do not include shares the acquiror is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A control share acquisition means the acquisition of control shares, subject to certain exceptions. 

A person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction or waiver of certain conditions, including an undertaking to pay the expenses of the special meeting. If no request for a special meeting is made, the corporation may itself present the question at any stockholders meeting. 

If voting rights are not approved at the special meeting or if the acquiror does not deliver an acquiring person statement as required by the statute, then the corporation may, subject to certain conditions and limitations, redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. Fair value is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or of any meeting of stockholders at which the voting rights of such shares are considered and not approved. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition. 
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The control share acquisition statute does not apply (a) to shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (b) to acquisitions approved or exempted by the charter or bylaws of the corporation. 

Our bylaws contain a provision that exempts from the control share acquisition statute any and all acquisitions by any person of shares of our stock. This provision may be amended or eliminated at any time in the future. 

Subtitle 8 

Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and at least three independent directors to elect to be subject, by provision in its charter or bylaws or by a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to any or all of the following five provisions: 
•a classified board, 
•a two-thirds vote requirement for removing a director, 
•a requirement that the number of directors be fixed only by vote of the directors, 
•a requirement that a vacancy on the board be filled only by the affirmative vote of a majority of the remaining directors in office and such director shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is elected and qualifies, and 
•a majority requirement for the calling of a stockholder-requested special meeting of stockholders.  

Pursuant to our charter, we have elected to be subject to the provision of Subtitle 8 that requires that vacancies on the board may be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. Through provisions in our bylaws unrelated to Subtitle 8, we already (1) vest in the board of directors the exclusive power to fix the number of directors and (2) require, unless called by our chair, chief executive officer, president or the board of directors, the request of stockholders entitled to cast not less than a majority of the votes entitled to be cast at such meeting to call a special meeting of stockholders if certain procedural requirements are met. 

Special Meetings of the Stockholders 

Each of our chair of the board, chief executive officer, president and board of directors has the power to call a special meeting of the stockholders. A special meeting of the stockholders to act on any matter that may properly be brought before a meeting of stockholders will also be called by our secretary upon the written request of the stockholders entitled to cast a majority of all the votes entitled to be cast on such matter at the meeting and containing the information required by our bylaws. The secretary will be required to inform the requesting stockholders of the reasonably estimated cost of preparing and mailing the notice of meeting (including our proxy materials), and the requesting stockholder will be required to pay such estimated cost to the secretary prior to the preparation and mailing of any notice for such special meeting. 

Advance Notice of Director Nomination and New Business; Proxy Access 

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Our charter and bylaws provide that, at any annual meeting of stockholders, nominations of individuals for election to the board of directors and proposals of business to be considered by stockholders may be made only (i) pursuant to our notice of the meeting, (ii) by or at the direction of the board of directors, or (iii) by a stockholder who was a stockholder of record at each of (A) the record date with respect to the annual meeting, (B) the time of giving of notice by the stockholder as provided in the advance notice provisions set forth in our bylaws, and (C) the time of the annual meeting (and any postponement or adjournment thereof), who is entitled to vote at the annual meeting in the election of directors or on such other proposed business and who has complied with the advance notice provisions set forth in our bylaws. The stockholder generally must provide notice to the secretary not less than 120 days nor more than 150 days prior to the first anniversary of the date of our proxy statement for the solicitation of proxies for election of directors at the preceding year’s annual meeting. 

Only the business specified in our notice of meeting may be brought before any special meeting of stockholders. Our bylaws provide that nominations of individuals for election to our board of directors at a special meeting of stockholders may be made only (i) by or at the direction of our board of directors, (ii) by a stockholder that has requested that a special meeting be called for the purpose of electing directors and provides the information required to request such a meeting under our bylaws, or (iii) provided that the special meeting has been called for the purpose of electing directors, by any stockholder of record at each of (A) the record date with respect to the special meeting, (B) the time of giving of notice provided for in the advance notice provisions set forth in our bylaws and (C) the time of the special meeting (and any postponement or adjournment thereof), who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice provisions set forth in our bylaws. Such stockholder will be entitled to nominate one or more individuals, as the case may be, for election as a director if the stockholder’s notice, containing the information required by our bylaws, is delivered to the secretary at our principal executive office not earlier than the 120th day prior to such special meeting and not later than 5:00 p.m., Eastern Time, on the later of (i) the 90th day prior to such special meeting or (ii) the tenth day following the day on which public announcement is first made of the date of the special meeting and any of the nominees proposed by the board of directors to be elected at such meeting. 

Our bylaws also include proxy access to allow eligible stockholders to include their own nominee or nominees for director in our proxy materials for an annual meeting of stockholders, along with the candidates nominated by the board of directors. A stockholder, or group of up to 20 stockholders, owning 3% or more of our outstanding common stock continuously for at least three years would be permitted to include director candidates constituting up to 25% of our board of directors (rounded down to the nearest whole number, but not less than two). Under the proxy access procedure, for the stockholders’ notice in respect of the annual meeting of our stockholders to be timely, such notice must be delivered to us not later than the close of business on the 120th day nor earlier than the 150th day prior to the first anniversary of the release date of the proxy materials for the preceding year’s annual meeting of stockholders. The foregoing proxy access right is subject to additional eligibility, procedural and disclosure requirements set forth in our bylaws. 

The purpose of requiring stockholders to give advance notice of nominations and other proposals is to afford our board of directors the opportunity to consider the qualifications of the proposed nominees or the advisability of the other proposals and, to the extent considered necessary by our board of directors, to inform stockholders and make recommendations regarding the nominations or other proposals. The advance notice and proxy access procedures also permit a more orderly procedure for conducting stockholder meetings. 

Exclusive Forum 
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Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, shall be the sole and exclusive forum for: 
•any derivative action or proceeding brought on behalf of our company, 
•any action asserting a claim of breach of any duty owed by any director or officer or other employee of our company to our company or to the stockholders of our company, 
•any action asserting a claim against our company or any director or officer or other employee of our company arising pursuant to any provision of the MGCL, our charter or our bylaws, or 
•any action asserting a claim against our company or any director or officer or other employee of our company that is governed by the internal affairs doctrine. 

This exclusive forum provision is intended to apply to claims arising under Maryland state law and would not apply to claims brought pursuant to the Exchange Act or the Securities Act of 1933, or any other claim for which the federal courts have exclusive jurisdiction. This exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations. 

Anti-Takeover Effect of Certain Provisions of Maryland Law and of Our Charter and Bylaws 

The restrictions on transfer and ownership of our stock will prohibit any person from acquiring more than 9.9% of outstanding common stock or more than 9.9% of outstanding stock without prior approval of our board of directors. The business combination statute may discourage others from trying to acquire more than 10% of our stock without the advance approval of our board of directors, and may substantially delay or increase the difficulty of consummating any transaction with or change in control of us. Because our board of directors can approve exceptions to the transfer and ownership limits and exempt transactions from the business combination statute, the transfer and ownership limits and the business combination statute will not interfere with a merger or other business combination approved by our board of directors. The power of our board of directors to classify and reclassify unissued common stock or preferred stock, and authorize us to issue classified or reclassified shares, also could have the effect of delaying, deferring or preventing a change in control or other transaction. 

These provisions, along with other provisions of the MGCL and our charter and bylaws discussed above, including provisions relating to the removal of directors and the filling of vacancies, the advance notice provisions and the procedures that stockholders will be required to follow to request a special meeting, alone or in combination, could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control that might involve a premium price for shares of our common stock or otherwise be in the best interest of our stockholders, and could increase the difficulty of consummating any offer.  

Transfer Agent and Registrar 

The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. 

Listing 

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Shares of our common stock are listed on the The Nasdaq Stock Market LLC and trade on the Nasdaq Global Select Market under the symbol “SBRA.” 
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