Item
1.01. Entry into a Material Definitive Agreement.
On
April 26, 2023 (the “Issue Date”), Novo Integrated Sciences, Inc. (the “Company”) entered into a securities purchase
agreement (the “SPA”), dated as of April 26, 2023, with RC Consulting Group LLC in favor of SCP Tourbillion Monaco or registered
assigns (the “Holder”), pursuant to which the Company issued an unsecured 15-year promissory note to the Holder (the “Note”)
with a maturity date of April 26, 2038, in the principal sum of $70,000,000, which amount represents the $57,000,000 purchase price plus
a yield (non-compounding) of 1.52% (zero coupon) per annum from the Issue Date until the same becomes due and payable as provided in
the Note. The Note may be prepaid as set forth in the Note and ranks pari passu with all unsecured indebtedness of the Company.
Pursuant
to the terms of the Note, at the Holder’s option, the sale, conveyance or disposition of all or substantially all of the Company’s
assets, or the consolidation, merger or other business combination of the Company with or into any other person(s) when the Company is
not the survivor will either: (i) be deemed to be an Event of Default (as defined in the Note) pursuant to which the Company will be
required to pay to the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as
hereinafter defined), or (ii) be treated pursuant to Section 1.6(b) of the Note.
The
Note contains customary covenants for a transaction of this type. Among other things, so long as the Note is outstanding, the Company
will not enter into any transaction or arrangement structured in accordance with, based upon, or related or pursuant to, in whole or
in part, Section 3(a)(10) of the Securities Act of 1933, as amended (a “3(a)(10) Transaction”). In the event that the Company
does enter into, or makes any issuance of common stock related to a 3(a)(10) Transaction while the Note is outstanding, a liquidated
damages charge of 25% of the outstanding principal balance of the Note, but not less than $1,000,000, will be assessed and will become
immediately due and payable to the Holder at its election in the form of a cash payment or added to the balance of the Note (under the
Holder’s and the Company’s expectation that this amount will tack back to the Issue Date).
The
Note contains customary events of default relating to, among other things, payment defaults, breach of representations and warranties,
and breach of provisions of the SPA or the Note.
Upon
the occurrence of any Event of Default (as defined in the Note), the Note will become immediately due and payable, and the Company will
pay to the Holder, in full satisfaction of its obligations thereunder, an amount equal to the principal amount then outstanding plus
accrued interest (including any default interest) through the date of full repayment multiplied by 125% (collectively, the “Default
Amount”), as well as all costs, including, without limitation, legal fees and expenses, of collection, all without demand, presentment
or notice.
The
SPA contains customary covenants, representations and warranties for a transaction of this type.
The
description of the SPA and the Note does not purport to be complete and is qualified in its entirety by reference to the SPA and the
Note, copies of which are filed as Exhibits 10.1 and 10.2 hereto and are incorporated herein by reference.
