Exhibit 10.1

SUBSCRIPTION AGREEMENT

This Subscription Agreement (this “Agreement”) is dated as of June 11, 2019 (the
“Effective Date”), among Synlogic, Inc., a Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each a “Purchaser”
and collectively the “Purchasers”).

WHEREAS, the Company and the Purchasers are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 of Regulation D as promulgated by the United States
Securities and Exchange Commission (the “Commission”) under the Securities Act.

WHEREAS, each Purchaser wishes to purchase, and the Company wishes to sell, upon
the terms and conditions stated in this Agreement, at the Closing (as defined
below) (i) that aggregate number of shares of Common Stock (as defined below)
set forth opposite such Purchaser’s name on Exhibit A (the “Shares”) and/or
(ii) pre-funded warrants (the “Pre-Funded Warrants”) to acquire up to that
number of additional shares of Common Stock (as exercised, collectively, the
“Pre-Funded Warrant Shares”) set forth opposite such Purchaser’s name on Exhibit
A, in substantially the form attached hereto as Exhibit B.

The Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares
collectively are referred to herein as the “Securities”.

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree
as follows:

 

1.

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
the following terms have the meanings set forth in this Section 1.1:

“Closing” means the closing of the purchase and sale of the Shares and the
Pre-Funded Warrants on the Closing Date pursuant to Section 2.1 of this
Agreement.

“Closing Date” means June 11, 2019.

“Common Stock” means the common stock of the Company, $0.001 par value per
share, and any other class of securities into which such securities may
hereafter be reclassified or changed into.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

“Foundry Terms of Service Agreement” means the Foundry Terms of Service
Agreement between the Company and Ginkgo Bioworks, Inc., dated the date hereof.

 

1.

--------------------------------------------------------------------------------

“GAAP” means U.S. generally accepted accounting principles consistently applied.

“Governmental Entity” shall mean any national, federal, state, county,
municipal, local or foreign government, or any political subdivision, court,
body, agency or regulatory authority thereof, and any person exercising
executive, legislative, judicial, regulatory, taxing or administrative functions
of or pertaining to any of the foregoing.

“Material Adverse Effect” means a circumstance that (i) could reasonably be
expected to have a material adverse effect on the performance of this Agreement
or the consummation of any of the transactions contemplated hereby or (ii) could
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), prospects, earnings, business or properties of the
Company.

“Registration Statement” means a registration statement or registration
statements of the Company filed under the Securities Act pursuant to Section 4
hereof.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

“Share Purchase Price” means $9.00 per share.

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
of the Exchange Act, but shall be deemed to not include the location and/or
reservation of borrowable shares of Common Stock.

“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

“Trading Market” means the following markets or exchanges on which (and if) the
Common Stock is listed or quoted for trading on the date in question: the NYSE
American; The Nasdaq Capital Market; The Nasdaq Global Market; The Nasdaq Global
Select Market; or the New York Stock Exchange.

“Transaction Documents” means this Agreement, the Pre-Funded Warrants and any
other documents or agreements executed and delivered to the Purchasers in
connection with the transactions contemplated hereunder.

 

2.

PURCHASE AND SALE

2.1 Closing.

(a) At the Closing, upon the terms set forth herein, the Company hereby agrees
to issue and sell to each Purchaser, and each Purchaser agrees to purchase from
the Company, severally and not jointly, the Shares set forth opposite such
Purchaser’s name on Exhibit A hereto, at a purchase price equal to the Share
Purchase Price per share of Common Stock.

 

2.

--------------------------------------------------------------------------------

(b) At the Closing, upon the terms set forth herein, the Company hereby agrees
to issue and sell to Ginkgo or one or more of its affiliates (collectively,
“Ginkgo”), and Ginkgo agrees to purchase from the Company, Pre-Funded Warrants
as set forth on Exhibit A hereto, at a purchase price equal to the Share
Purchase Price per share of Common Stock, of which all but $0.01 of the Share
Purchase Price per share of Common Stock will be paid on the Closing Date.

(c) At the Closing, each Purchaser shall deliver to the Company via wire
transfer immediately available funds equal to its aggregate purchase price set
forth opposite such Purchaser’s name on Exhibit A hereto and the Company shall
deliver to each Purchaser its respective Securities and the other items set
forth in Section 2.2 of this Agreement deliverable at the Closing on the Closing
Date. The Closing shall occur at 10:00 a.m. (New York City Time) on the Closing
Date or such other time and location as the parties shall mutually agree.

2.2 Deliveries; Closing Conditions.

(a) At the Closing, the Company will deliver or cause to be delivered to each
Purchaser certificate(s) or book-entry shares representing the Common Stock,
purchased by such Purchaser, registered in the Purchaser’s name. Such delivery
shall be against payment of the purchase price therefor by the Purchaser by wire
transfer of immediately available funds to the Company in accordance with the
Company’s written wiring instructions.

(b) At the Closing, the Company will deliver or cause to be delivered to Ginkgo
the Pre-Funded Warrants purchased by Ginkgo registered in Ginkgo’s name. Such
delivery shall be against payment of the purchase price therefor by the Ginkgo
by wire transfer of immediately available funds to the Company in accordance
with the Company’s written wiring instructions.

(c) The respective obligations of the Company, on the one hand, and the
Purchasers, on the other hand, hereunder in connection with the Closing are
subject to the following conditions being met:

(i) the accuracy in all material respects on the Closing Date of the
representations and warranties contained herein (unless made as of a specified
date therein) of the Company (with respect to the obligations of the Purchasers)
and the Purchasers (with respect to the obligations of the Company);

(ii) all obligations, covenants and agreements of the Company (with respect to
the obligations of the Purchasers) and the Purchasers (with respect to the
obligations of the Company) required to be performed at or prior to the Closing
Date shall have been performed in all material respects;

(iii) Purchasers shall have received a certificate of the Secretary of the
Company, dated as of the Closing Date in form and substance reasonably
satisfactory to the Purchasers;

(iv) Purchasers shall have received a certificate signed by the Chief Executive
Officer of the Company, dated as of the Closing Date in form and substance
reasonably satisfactory to the Purchasers; and

 

3.

--------------------------------------------------------------------------------

(v) Purchasers shall have received an opinion of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., counsel for the Company, dated as of the Closing Date,
in a form reasonably satisfactory to the Purchasers.

 

3.

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Section 3.2 of
this Agreement and except as set forth in the SEC Reports (defined below), which
disclosures serve to qualify these representations and warranties in their
entirety, the Company represents and warrants to the Purchasers that the
statements contained in this Section 3.1 are true and correct as of the date of
the Closing Date:

(a) The Company was not and is not an Ineligible Issuer (as defined in Rule
405), without taking account of any determination by the Commission pursuant to
Rule 405 that it is not necessary that the Company be considered an Ineligible
Issuer.

(b) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own or lease,
as the case may be, and to operate its properties and conduct its business, and
to execute and deliver the Transaction Documents, to be dated as of the Closing
Date. The Company is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which requires such
qualification except where the failure to be so qualified or to be in good
standing would not result in a Material Adverse Effect. The Company has no
subsidiaries other than Synlogic IBDCo, Inc., Synlogic Operating Company, Inc.
and Synlogic Securities Corporation.

(c) As of the date hereof, the authorized capital stock of the Company consists
of 255,000,000 shares of capital stock, of which 250,000,000 are designated as
Common Stock and 5,000,000 are designated as preferred stock, $0.001 par value
per share. As of March 31, 2019: (i) 25,378,948 shares of Common Stock were
issued and outstanding; (ii) no shares of preferred stock were issued and
outstanding; (iii) 2,747,043 shares of Common Stock were issuable (and such
number was reserved for issuance) upon exercise of options to purchase Common
Stock outstanding as of such date; and (iv) no shares of Common Stock were
issuable (and such number was reserved for issuance) upon exercise of warrants
to purchase Common Stock outstanding as of such date.

(d) The outstanding shares of Common Stock have been duly and validly authorized
and issued and are fully paid and nonassessable; the Shares and the Pre-Funded
Warrant Shares have been duly and validly authorized and, when issued and
delivered to and paid for by the Purchasers pursuant to this Agreement or upon
exercise of the Pre-Funded Warrants in accordance therewith, will be fully paid
and nonassessable; the certificates for the securities are in valid form; the
holders of outstanding shares of capital stock of the Company are not entitled
to preemptive or other rights to subscribe for the Securities, except for any
such rights as have been effectively waived or complied with; and, except as set
forth in Section 3.1(c) above, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, shares of capital stock of or ownership
interests in the Company are outstanding.

 

4.

--------------------------------------------------------------------------------

(e) The Pre-Funded Warrants have been duly authorized by the Company and, when
executed and delivered by the Company, will be valid and binding agreements of
the Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws relating
to or affecting the rights and remedies of creditors or by general equitable
principles. The Pre-Funded Warrant Shares have been validly reserved for
issuance upon exercise of the Pre-Funded Warrants. The issuance of the
Pre-Funded Warrant Shares is not subject to any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase the
Pre-Funded Warrants.

(f) This Agreement has been duly authorized, executed and delivered by the
Company.

(g) The Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds as described in Section 5.4 of
this Agreement, will not be an “investment company” as defined in the Investment
Company Act of 1940, as amended.

(h) No consent, approval, authorization, filing with or order of any court or
governmental agency or body is required in connection with the transactions
contemplated herein, except as may be required under the Securities Act, blue
sky laws of any jurisdiction in connection with the purchase of the Securities
by the Purchasers.

(i) Neither the issue and sale of the Securities, nor the consummation of any
other of the transactions contemplated by any Transaction Document nor the
fulfillment of the terms thereof, will conflict with, result in a breach or
violation of, or imposition of any lien, charge or encumbrance upon any property
or assets of the Company pursuant to, (i) the charter or by-laws of the Company,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition, covenant or
instrument to which the Company is a party or bound or to which its property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or decree
applicable to the Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its properties (the items listed in subclause (iii),
collectively, “Applicable Laws”).

(j) The Company’s Common Stock is registered under Section 12 of the Exchange
Act. The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by the Company under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, since January 1, 2018 (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Exchange Act and, in each case, to the rules
promulgated thereunder, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 

5.

--------------------------------------------------------------------------------

(k) The financial statements and the related notes of the Company included in
the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with GAAP, except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and fairly present in
all material respects the consolidated financial position of the Company as of
and for the dates thereof and the consolidated results of operations and cash
flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.

(l) No action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or its property is
pending or, to the knowledge of the Company, threatened that is likely to have a
Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business.

(m) The Company owns or leases all such properties as are reasonably necessary
to the conduct of its operations as presently conducted in all material
respects.

(n) The Company is not in violation or default of (i) any provision of its
charter or bylaws, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to which
its property is subject, or (iii) any Applicable Laws, except in the case of
clauses (ii) and (iii), as would not reasonably be expected to have a Material
Adverse Effect.

(o) KPMG LLP, who have certified certain financial statements of the Company and
delivered their report with respect to the audited financial statements included
in the SEC Reports, are independent public accountants with respect to the
Company within the meaning of the Securities Act and the applicable published
rules and regulations thereunder.

(p) There are no transfer taxes or other similar fees or charges under Federal
law or the laws of any state, or any political subdivision thereof, required to
be paid in connection with the execution and delivery of this Agreement, or the
issuance by the Company or sale by the Company of the Securities.

(q) The Company has filed all tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business) and has paid all taxes required
to be paid by it and any other assessment, fine or penalty levied against it, to
the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as would not have a Material Adverse Effect.

 

6.

--------------------------------------------------------------------------------

(r) No labor dispute with the employees of the Company or its subsidiaries
exists or, to the knowledge of the Company, is imminent, and the Company is not
aware of any existing or imminent labor disturbance by the employees of any of
its or its subsidiaries’ principal suppliers, manufacturers, customers or
contractors, which, in either case, would result in a Material Adverse Effect.

(s) The Company is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as the Company reasonably
believes are prudent and customary in the businesses in which it is engaged; all
policies of insurance and fidelity or surety bonds insuring the Company or its
business, assets, employees, officers and directors are in full force and
effect; the Company is in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company
under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; the Company has not
been refused any insurance coverage sought or applied for; and the Company has
no reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect, whether or not arising in the ordinary
course of business.

(t) The Company possesses all licenses, certificates, permits and other
authorizations issued by all applicable authorities necessary to conduct its
business, and the Company has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.

(u) Except as described in the SEC Reports, the Company: (A) is and at all times
has been in material compliance with all statutes, rules or regulations of the
U.S. Food and Drug Administration (the “FDA”) and other comparable Governmental
Entities applicable to the ownership, testing, development, manufacture,
packaging, processing, use, distribution, marketing, labeling, promotion, sale,
offer for sale, storage, import, export or disposal of any product under
development, manufactured or distributed by the Company (“Product Laws”); (B)
has not received any FDA Form 483, notice of adverse finding, warning letter,
untitled letter or other correspondence or written notice from the FDA or any
other Governmental Entity alleging or asserting material noncompliance with any
Product Laws or any licenses, certificates, approvals, clearances, exemptions,
authorizations, permits and supplements or amendments thereto required by any
such Product Laws (“Authorizations”); (C) possesses all material Authorizations
and such Authorizations are valid and in full force and effect and the Company
is not in material violation of any term of any such Authorizations; (D) has not
received written notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from the FDA or any
other Governmental Entity or third party alleging that any product operation or
activity is in material violation of any Product Laws or Authorizations and has
no knowledge that the FDA or any other Governmental Entity or third party is
considering any such claim, litigation, arbitration, action, suit, investigation
or proceeding; (E) has not received notice that the FDA or any other
Governmental Entity has taken, is taking or intends to take action to limit,
suspend, modify or revoke any material Authorizations and has no knowledge that
the FDA or any other Governmental Entity is considering such action; and (F) has
filed, obtained, maintained or submitted all material reports, documents, forms,
notices, applications, records, claims, submissions and supplements or
amendments as required by any Product Laws or Authorizations and that all such
reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments were materially complete and correct on the date
filed (or were corrected or supplemented by a subsequent submission).

 

7.

--------------------------------------------------------------------------------

(v) The Company has operated and currently is in compliance with all applicable
health care laws, rules and regulations to the extent they apply to the Company
and its current activities (except where such failure to operate
or non-compliance would not, singly or in the aggregate, result in a Material
Adverse Effect), including, without limitation, (i) the Federal, Food, Drug and
Cosmetic Act (21 U.S.C. §§ 301 et seq.); (ii) all applicable federal, state,
local and all applicable foreign healthcare related fraud and abuse laws,
including, without limitation, the federal Anti-kickback Statute (42 U.S.C.
§ 1320a-7b(b)), the U.S. Physician Payments Sunshine Act (42 U.S.C.
§ 1320a-7h), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the
criminal False Claims Law (42 U.S.C. § 1320a-7b(a)), all criminal laws relating
to healthcare fraud and abuse, including but not limited to 18 U.S.C. Sections
286 and 287, the healthcare fraud criminal provisions under the U.S. Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”) (42 U.S.C.
Section 1320d et seq.), the exclusion laws (42 U.S.C. § 1320a-7), and the civil
monetary penalties law (42 U.S.C. § 1320a-7a); (iii) HIPAA, as amended by the
Health Information Technology for Economic Clinical Health Act (42 U.S.C.
Section 17921 et seq.); (iv) the regulations promulgated pursuant to such laws;
and (v) any other similar local, state, federal, or foreign laws (collectively,
the “Health Care Laws”). Neither the Company, nor to the Company’s knowledge,
any of its officers, directors, employees or agents have engaged in activities
which are, as applicable, cause for false claims liability, civil penalties, or
mandatory or permissive exclusion from Medicare, Medicaid, or any other state or
federal healthcare program. The Company has not received written notice or other
correspondence of any claim, action, suit, audit, survey, proceeding, hearing,
enforcement, investigation, arbitration or other action (“Action”) from any
court or arbitrator or Governmental Entity or third party alleging that any
product operation or activity is in violation of any Health Care Laws, and, to
the Company’s knowledge, no such claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action is threatened. The
Company is not a party to and does not have any ongoing reporting obligations
pursuant to any corporate integrity agreement, deferred prosecution agreement,
monitoring agreement, consent decree, settlement order, plan of correction or
similar agreement imposed by any Governmental Entity. Additionally, neither the
Company, nor to the Company’s knowledge, any of its employees, officers or
directors, has been excluded, suspended, disqualified, or debarred from
participation in any U.S. state or federal health care program or human clinical
research or, to the knowledge of the Company, is subject to a governmental
inquiry, investigation, proceeding, or other similar action that could
reasonably be expected to result in debarment, suspension, disqualification, or
exclusion.

(w) The nonclinical studies and clinical trials conducted by or, to the
Company’s knowledge, on behalf of the Company were and, if still ongoing, are
being conducted in all material respects in accordance with experimental
protocols, procedures and controls pursuant to accepted professional scientific
standards and all Authorizations and Product Laws, including, without
limitation, the Federal Food, Drug and Cosmetic Act and the rules and
regulations promulgated thereunder (collectively, “FFDCA”); the descriptions of
the results of such nonclinical studies and clinical trials contained in the SEC
Reports are, to the Company’s knowledge, accurate and complete in all material
respects and fairly present the data derived from such nonclinical studies and
clinical trials; except to the extent disclosed in the SEC Reports, the Company
is not aware of any nonclinical studies or clinical trials, the results of which
the Company believes reasonably call into question any study or trial results
described or referred to in the SEC Reports when viewed in the context in which
such results are described; and, except to the extent disclosed in the SEC
Reports, the Company has not received any

 

8.

--------------------------------------------------------------------------------

written notices or other correspondence from the FDA or any other Governmental
Entity requiring the termination or suspension of any studies or clinical trials
conducted by or on behalf of the Company, other than ordinary course
communications with respect to modifications in connection with the design and
implementation of such studies or trials, copies of which communications have
been made available to you.

(x) The Company owns or has valid, binding and enforceable licenses or other
rights under the patents, patent applications, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks, trade names or other intellectual property necessary for, or used
in the conduct, or the proposed conduct, of the business of the Company
(collectively, the “Intellectual Property”); the patents, trademarks, and
copyrights, if any, included within the Intellectual Property are valid,
enforceable, and subsisting; other than as disclosed in the SEC Reports and as
contemplated by the Foundry Terms of Service Agreement, (A) the Company is not
obligated to pay a material royalty, grant a license to, or provide other
material consideration to any third party in connection with the Intellectual
Property, (B) the Company has not received any notice of any claim of
infringement, misappropriation or conflict with any asserted rights of others
with respect to any of the Company’s drug candidates, services, processes or
Intellectual Property, (C) to the knowledge of the Company, neither the sale nor
use of any of the discoveries, inventions, drug candidates, services or
processes of the Company referred to in the SEC Reports do or will, to the
knowledge of the Company, infringe, misappropriate or violate any right or valid
patent claim of any third party, (D) none of the technology employed by the
Company has been obtained or is being used by the Company in material violation
of any contractual obligation binding on the Company or, to the Company’s
knowledge, upon any of its officers, directors or employees or otherwise in
violation of the rights of any persons, (E) to the knowledge of the Company, no
third party has any ownership right in or to any Intellectual Property that is
owned by the Company, other than any co-owner of any patent constituting
Intellectual Property who is listed on the records of the U.S. Patent and
Trademark Office (the “USPTO”) and any co-owner of any patent application
constituting Intellectual Property who is named in such patent application, and,
to the knowledge of the Company, no third party has any ownership right in or to
any Intellectual Property in any field of use that is exclusively licensed to
the Company, other than any licensor to the Company of such Intellectual
Property, (F) to the knowledge of the Company, there is no material infringement
by third parties of any Intellectual Property, (G) there is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the Company’s rights in or to any Intellectual Property, and
(H) there is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
Intellectual Property. The Company is in compliance in all material respects
with the terms of each agreement pursuant to which Intellectual Property has
been licensed to the Company, and all such agreements are in full force and
effect.

(y) All patents and patent applications owned by or licensed to the Company or
under which the Company has rights have, to the knowledge of the Company, been
duly and properly filed and maintained; to the knowledge of the Company, the
parties prosecuting such patent applications have complied with their duty of
candor and disclosure to the USPTO in connection with such applications; and the
Company is not aware of any facts required to be disclosed to the USPTO that
were not disclosed to the USPTO and which would preclude the grant of a patent
in connection with any

 

9.

--------------------------------------------------------------------------------

such application or would reasonably be expected to form the basis of a finding
of invalidity with respect to any patents that have issued with respect to such
applications. To the Company’s knowledge, all patents and patent applications
owned by the Company and filed with the USPTO or any foreign or international
patent authority (the “Company Patent Rights”) and all patents and patent
applications in-licensed by the Company and filed with the USPTO or any foreign
or international patent authority (the “In-licensed Patent Rights”) have been
duly and properly filed; the Company believes it has complied with its duty of
candor and disclosure to the USPTO for the Company Patent Rights and, to the
Company’s knowledge, the licensors of the In-licensed Patent Rights have
complied with their duty of candor and disclosure to the USPTO for
the In-licensed Patent Rights.

(z) [Reserved]

(aa) The Company maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company’s internal controls over financial reporting are effective and the
Company is not aware of any material weakness in its internal controls over
financial reporting.

(bb) The Company maintains “disclosure controls and procedures” (as such term is
defined in Rule 13a-15(e) under the Exchange Act); such disclosure controls and
procedures are effective.

(cc) The Company has not taken, directly or indirectly, any action designed to
or that would constitute or that might reasonably be expected to cause or result
in, under the Exchange Act or otherwise, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities.

(dd) Except as described in the SEC Reports or would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company nor any
subsidiary has violated or is in violation of any Applicable Laws relating to
pollution or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations
relating to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum or
petroleum products, asbestos-containing materials or mold (collectively,
“Hazardous Materials”) or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, “Environmental Laws”), (B) the Company and its subsidiaries have
all permits, authorizations and approvals required for their operations under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company
threatened, administrative, regulatory or judicial Actions relating to any
Environmental Law against the Company or any subsidiary and (D) to the Company’s
knowledge, there are no events or

 

10.

--------------------------------------------------------------------------------

circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an Action by any private party or Governmental
Entity, against or affecting the Company or any subsidiary relating to Hazardous
Materials or any Environmental Laws.

(ee) In the ordinary course of its business, the Company periodically reviews
the effect of Environmental Laws on the business, operations and properties of
the Company, in the course of which it identifies and evaluates associated costs
and liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). On the
basis of such review, the Company has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a Material
Adverse Effect, whether or not arising from transactions in the ordinary course
of business.

(ff) None of the following events has occurred or exists: (i) a failure to
fulfill the obligations, if any, under the minimum funding standards of
Section 302 of the United States Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and the regulations and published interpretations
thereunder with respect to a Plan that is required to be funded, determined
without regard to any waiver of such obligations or extension of any
amortization period; (ii) an audit or investigation by the Internal Revenue
Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation
or any other federal or state governmental agency or any foreign regulatory
agency with respect to the employment or compensation of employees by any of the
Company that would reasonably be expected to have a Material Adverse Effect;
(iii) any breach of any contractual obligation, or any violation of law or
applicable qualification standards, with respect to the employment or
compensation of employees by the Company that would reasonably be expected to
have a Material Adverse Effect; or (iv) a non-exempt prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code with
respect to any Plan that would reasonably be expected to have a Material Adverse
Effect. None of the following events has occurred or is reasonably likely to
occur: (i) a material increase in the aggregate amount of contributions required
to be made to all Plans in the current fiscal year of the Company compared to
the amount of such contributions made in the most recently completed fiscal year
of the Company; (ii) a material increase in the “accumulated post-retirement
benefit obligations” (within the meaning of Statement of Financial Accounting
Standards 106) of the Company as compared to the amount of such obligations in
the most recently completed fiscal year of the Company; (iii) any event or
condition giving rise to a liability under Title IV of ERISA that would
reasonably be expected to have a Material Adverse Effect; or (iv) the filing of
a claim by one or more employees or former employees of the Company related to
their employment that would reasonably be expected to have a Material Adverse
Effect. For purposes of this paragraph, the term “Plan” means a plan (within the
meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with respect to
which the Company may have any liability.

(gg) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply in all
material respects with any provision of the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley
Act”), including Section 402 relating to loans.

 

11.

--------------------------------------------------------------------------------

(hh) None of the Company, its subsidiaries or, to the knowledge of the Company,
any director, officer, agent, employee, affiliate or other person acting on
behalf of the Company or its subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA and the Company has and,
to the knowledge of the Company, its affiliates have conducted their businesses
in compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.

(ii) The operations of the Company and its subsidiaries are and have been
conducted at all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all applicable jurisdictions,
the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any Governmental
Entity (collectively, the “Money Laundering Laws”); and no Action by or before
any Governmental Entity involving the Company or its subsidiaries with respect
to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.

(jj) None of the Company, its subsidiaries or, to the knowledge of the Company,
any director, officer, agent, employee, affiliate or representative of the
Company or its subsidiaries is an individual or entity (“Person”) currently the
subject or target of any sanctions administered or enforced by the United States
Government (including, without limitation, the U.S. Department of the Treasury’s
Office of Foreign Assets Control), the United Nations Security Council, the
European Union, Her Majesty’s Treasury, or other relevant sanctions authority
(collectively, “Sanctions”); and the Company will not directly or indirectly use
the proceeds of the sale of the Securities, or lend, contribute or otherwise
make available such proceeds to any subsidiary, joint venture partners or other
Person, to fund any activities of or business with any Person, or in any country
or territory, that, at the time of such funding, is the subject of Sanctions or
in any other manner that will result in a violation by any Person (including any
Person participating in the transaction, whether as an agent, advisor, investor
or otherwise) of Sanctions.

(kk) None of the Company, its subsidiaries or, to the knowledge of the Company,
any director, officer, agent, employee, affiliate or representative of the
Company, is a Person that is, or is 50% or more owned or otherwise controlled by
a Person that is: (i) the subject of any Sanctions; or (ii) located, organized
or resident in a country or territory that is, or whose government is, the
subject of Sanctions that broadly prohibit dealings with that country or
territory (currently, Cuba, Iran, North Korea, Syria and the Crimea Region of
the Ukraine) (collectively, “Sanctioned Countries” and each, a “Sanctioned
Country”).

(ll) Neither the Company nor any of its subsidiaries has engaged in any dealings
or transactions with or for the benefit of a Sanctioned Person, or with or in a
Sanctioned Country, in the preceding 3 years, nor does the Company have any
plans to increase its dealings or transactions with Sanctioned Persons, or with
or in Sanctioned Countries.

 

12.

--------------------------------------------------------------------------------

(mm) The Common Stock is listed on The Nasdaq Capital Market. The Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from The Nasdaq Capital Market, nor has the Company received any
notification that the Commission or The Nasdaq Capital Market is contemplating
terminating such registration or listing. To the Company’s knowledge, it is in
compliance with all applicable listing requirements of The Nasdaq Capital
Market.

(nn) Neither the Company, nor any of the Company’s affiliates or any other
person acting on the Company’s behalf, has directly or indirectly engaged in any
form of general solicitation or general advertising with respect to the
Securities, nor have any of such persons made any offers or sales of any
security of the Company, or any of the Company’s affiliates or solicited any
offers to buy any security of the Company, or any of the Company’s or any
affiliates under circumstances that would require registration of the Securities
under the Securities Act or any other securities laws or cause this offering of
Securities to be integrated with any prior offering of securities of the Company
for purposes of the Securities Act in any manner that would affect the validity
of the private placement exemption under the Securities Act for the offer and
sale of the Securities hereunder.

(oo) The Company shall, at all times while any Pre-Funded Warrants are
outstanding, use commercially reasonable efforts to maintain a registration
statement covering the issue and sale of the Pre-Funded Warrant Shares upon
exercise of the Pre-Funded Warrants such that the Pre-Funded Warrant Shares,
when issued, will not be subject to resale and restrictions under the Securities
Act except to the extent that the Pre-Funded Warrant Shares are owned by
affiliates.

(pp) No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of
the 1933 Act (a “Disqualification Event”) is applicable to the Company or, to
the Company’s knowledge, any Company Covered Person (as defined below), except
for a Disqualification Event as to which Rule 506(d)(2)(ii–iv) or (d)(3), is
applicable. “Company Covered Person” means, with respect to the Company as an
“issuer” for purposes of Rule 506 promulgated under the 1933 Act, any person
listed in the first paragraph of Rule 506(d)(1).

(qq) The Company shall file a Form D with respect to the Securities as required
under Regulation D and, to the extent the Form D is not publicly available on
the Commission’s EDGAR reporting system, to provide a copy thereof to each
Purchaser promptly after such filing. The Company, on or before the Closing
Date, shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for or to qualify the Securities for
sale and issuance to the Purchasers at the Closing pursuant to this Agreement
under applicable securities or blue sky laws of the states of the United States
(or to obtain an exemption from such qualification), and, if requested by a
Purchaser, shall provide evidence of any material action so taken to such
Purchaser on or prior to the Closing Date. The Company shall make all filings
and reports relating to the offer and sale of the Securities required under
applicable securities or blue sky laws of the states of the United States
following the Closing Date.

 

13.

--------------------------------------------------------------------------------

3.2 Representations, Warranties and Covenants of the Purchasers. Each Purchaser,
for itself and for no other Purchaser, hereby represents, warrants and covenants
to the Company as of the Closing:

(a) Purchaser represents and warrants that: (i) Purchaser has all requisite
legal and corporate or other power and capacity and has taken all requisite
corporate or other action to execute and deliver this Agreement, to purchase the
Securities and to carry out and perform all of its obligations under this
Agreement; and (ii) this Agreement constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws relating
to or affecting the enforcement of creditors’ rights generally.

(b) At the time such Purchaser was offered the Securities, it was, and as of the
date hereof it is, and on each date on which it exercises any Pre-Funded
Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule 144A(a) under the Securities
Act. Such Purchaser is not required to be registered as a broker-dealer under
Section 15 of the Exchange Act. Such Purchaser has the authority and is duly and
legally qualified to purchase and own the Securities. Such Purchaser is aware of
the Company’s business affairs and financial condition and has had access to and
has acquired sufficient information about the Company to reach an informed and
knowledgeable decision to acquire the Securities. Purchaser has such business
and financial experience as is required to give it the capacity to protect its
own interests in connection with the purchase of the Securities and such
Purchaser is able to bear the economic risk of an investment in the Securities
and, at the present time, is able to afford a complete loss of such investment.
Such Purchaser acknowledges that it has had the opportunity to review the
Company’s filings with the Commission and has been afforded (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the
Securities and (ii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the
investment. Such Purchaser has provided the information in the Accredited
Investor Questionnaire attached hereto as Exhibit E (the “Investor
Questionnaire”). The information set forth on the signature pages hereto and the
Investor Questionnaire regarding Purchaser is true and complete in all respects.
Except as disclosed in the Investor Questionnaire, Purchaser has had no
position, office or other material relationship within the past three years with
the Company or Persons (as defined below) known to Purchaser to be affiliates of
the Company, and is not a member of the Financial Industry Regulatory Authority
or an “associated person” (as such term is defined under the FINRA Membership
and Registration Rules Section 1011).

(c) Each Purchaser is purchasing the Securities, and, if applicable, upon
exercise of the Pre-Funded Warrants will acquire the Pre-Funded Warrant Shares
issuable upon exercise of the Pre-Funded Warrants, for its own account, for
investment purposes only, and not with a present view to, or for, resale,
distribution or fractionalization thereof, in whole or in part, within the
meaning of the Securities Act. Each Purchaser understands and acknowledges that
the Securities are “restricted securities” and understands that its acquisition
of the Securities has not been registered under the

 

14.

--------------------------------------------------------------------------------

Securities Act or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of each Purchaser’s investment intent
as expressed herein. Each Purchaser will not, directly or indirectly, offer,
sell, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) the Securities except in compliance
with the Securities Act and the rules and regulations promulgated thereunder.

(d) Each Purchaser represents and acknowledges that is has not been solicited to
offer to purchase or to purchase any Securities by means of any general
solicitation or advertising within the meaning of Regulation D under the
Securities Act.

(e) Each Purchaser represents that it is not a person of the type described in
Section 506(d) of Regulation D under the Securities Act that would disqualify
the Company from engaging in a transaction pursuant to Section 506 of Regulation
D under the Securities Act.

(f) Each Purchaser understands that the Securities being offered and sold to it
in reliance on specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and each Purchaser’s compliance with, the
representations, warranties, agreements, acknowledgements and understandings of
each Purchaser set forth herein in order to determine the availability of such
exemptions and the eligibility of each Purchaser to acquire the Securities. Each
Purchaser further acknowledges and understands that the Securities may not be
resold or otherwise transferred except in a transaction registered under the
Securities Act or unless an exemption from such registration is available.

(g) Dispositions.

(i) Each Purchaser will not, prior to the effectiveness of a Resale Registration
Statement (as defined below), if then prohibited by law or regulation: (i) sell,
offer to sell, solicit offers to buy, dispose of, loan or grant any right with
respect to (collectively, a “Disposition”) the Securities; or (ii) engage in any
hedging or other transaction which is designed or could reasonably be expected
to lead to or result in a Disposition of the Securities by the Purchaser or an
affiliate.

(ii) As of the Closing Date, each Purchaser has not directly or indirectly, nor
has any person acting on behalf of or pursuant to any understanding with the
Purchaser, engaged in any purchases or sales of the Company’s securities
(including, without limitation, any Short Sales involving the Company’s
securities) since the time that the Purchaser was first contacted by the Company
or any other person regarding the transactions contemplated hereby. Each
Purchaser covenants that neither it nor any person acting on its behalf or
pursuant to any understanding with it will engage in any purchases or sales of
the Company’s securities (including, without limitation, any Short Sales
involving the Company’s securities) prior to the time that the transactions
contemplated by this Agreement are publicly disclosed.

(h) Each Purchaser agrees that for a period of 180 days from the date of this
Agreement, each Purchaser will not, without the prior written consent of the
Company, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or

 

15.

--------------------------------------------------------------------------------

contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any Securities, (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of any Securities, whether any
such swap or transaction described in clause (i) or (ii) above is to be settled
by delivery of Securities, in cash or otherwise or (iii) publicly announce an
intention to effect any such swap, agreement or other transaction described in
clauses (i) and (ii).

(i) Each Purchaser has independently evaluated the merits of its decision to
purchase Securities pursuant to this Agreement. Each Purchaser understands that
nothing in this Agreement or any other materials presented to such Purchaser in
connection with the purchase and sale of the Securities constitutes legal, tax
or investment advice.

(j) Each Purchaser will hold in confidence all information concerning this
Agreement and the sale and issuance of the Securities until the Company has made
a public announcement concerning this Agreement and the sale and issuance of the
Securities, which shall be made not later than 5:30 pm New York time on the
fourth Trading Day immediately after the signing of this Agreement.

(k) Each Purchaser understands that no United States federal or state agency or
any other government or governmental agency has passed upon or made any
recommendation or endorsement of the Securities.

(l) Legend.

(i) Each Purchaser understands that the Securities shall bear a restrictive
legend in substantially the following form (and a stop transfer order may be
placed against transfer of the certificates for the Securities):

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR IN ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED
HEREBY MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS
UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THOSE LAWS.”

(ii) The Company shall, at its sole expense, upon appropriate notice from any
Purchaser stating that Securities have been sold pursuant to an effective
Registration Statement, timely prepare and deliver certificates or book-entry
shares representing the shares to be delivered to a transferee pursuant to the
Registration Statement, which certificates or book-entry shares shall be free of
any restrictive legends and in such denominations and registered in such names
as such Purchaser may request. Further, the Company shall, at its sole expense,
cause its legal counsel or other counsel satisfactory to the transfer agent:
(i) while the Registration Statement is effective, to issue to the transfer
agent a “blanket” legal opinion to

 

16.

--------------------------------------------------------------------------------

allow sales without restriction pursuant to the effective Registration
Statement, and (ii) provide all other opinions as may reasonably be required by
the transfer agent in connection with the removal of legends. A Purchaser may
request that the Company remove, and the Company agrees to authorize the removal
of, any legend from such shares, following the delivery by a Purchaser to the
Company or the Company’s transfer agent of a legended certificate representing
such shares: (i) following any sale of such shares pursuant to Rule 144, (ii) if
such shares are eligible for sale under Rule 144(b)(1), or (iii) following the
time that the Registration Statement is declared effective. If a legend removal
request is made pursuant to the foregoing, the Company will, no later than three
business days following the delivery by a Purchaser to the Company or the
Company’s transfer agent of a legended certificate representing such shares (or
a request for legend removal, in the case of shares issued in book-entry form),
deliver or cause to be delivered to such Purchaser a certificate representing
such shares that is free from all restrictive legends or an equivalent
book-entry position, as requested by the Purchaser. Certificates for shares free
from all restrictive legends may be transmitted by the Company’s transfer agent
to the Purchasers by crediting the account of the Purchaser’s prime broker with
the Depository Trust Company (“DTC”) as directed by such Purchaser. The Company
warrants that the shares shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement. If a
Purchaser effects a transfer of the shares in accordance with
Section 3.2(l)(ii), the Company shall permit the transfer and shall promptly
instruct its transfer agent to issue one or more certificates or credit shares
to the applicable balance accounts at DTC in such name and in such denominations
as specified by such Purchaser to effect such transfer. Each Purchaser hereby
agrees that the removal of the restrictive legend pursuant to this
Section 3.2(l)(ii) is predicated upon the Company’s reliance that such Purchaser
will sell any such shares pursuant to either the registration requirements of
the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom.

(m) If Purchaser is not a United States person (as defined by
Section 7701(a)(30) of the Code), 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 or acquisition, (c) any government 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, redemption, sale or transfer of
the Securities. The Purchaser’s subscription and payment for and continued
beneficial ownership of the Securities will not violate any applicable
securities or other laws of the Purchaser’s jurisdiction.

(n) Such Purchaser understands that no United States federal or state agency or
any other governmental or state agency has passed on or made recommendations or
endorsement of the Securities or the suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the
offering of the Securities pursuant to this Agreement.

(o) The execution, delivery and performance of this Agreement and the
consummation by such Purchaser of the transactions contemplated hereby and
thereby or relating hereto or thereto do not and will not (i) result in a
violation of such Purchaser’s charter documents, bylaws or other organizational
documents, if applicable, (ii) conflict with nor constitute a default (or an
event which with notice or lapse of time or both would become a default) under
any agreement to which such Purchaser is a party, nor (iii) result in a
violation of any law, rule, or regulation, or any order, judgment

 

17.

--------------------------------------------------------------------------------

or decree of any court or governmental agency applicable to such Purchaser or
its properties (except for such conflicts, defaults and violations as would not,
individually or in the aggregate, have a material adverse effect on such
Purchaser). Such Purchaser is not required to obtain any consent, authorization
or order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under this Agreement nor to purchase the Securities in accordance with the terms
hereof, provided that for purposes of the representation made in this sentence,
such Purchaser is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.

(p) For a period of 180 days from the date hereof, each Purchaser shall not (and
each Purchaser shall cause its directors, officers, managers, employees,
controlled affiliates and representatives not to), directly or indirectly, do
any of the following (unless specifically invited in writing to do so by the
Company’s Board of Directors (the “Board”); provided, however, that each
Purchaser shall not be required to perform any of the following even if
specifically invited to do so by the Board: (a) initiate or support any proposal
or indication of interest for, or offer with respect to, any Acquisition
Transaction (as defined below); (b) seek or propose to influence, advise, change
or control the management, the Board, governing instruments or policies or
affairs of the Company, including by means of a solicitation of proxies not
conducted by the Company, or by seeking to influence, advise or direct the vote
of any third-party holder of debt or voting securities of the Company;
(c) initiate or support any proposal through a public communication for any
Acquisition Transaction, recapitalization, reorganization, joint venture,
liquidation, dissolution, spin-off or split-off, business combination or other
extraordinary transaction involving the Company or any of the Company’s
subsidiaries or any of their debt, securities or assets; (d) publicly seek
election of or publicly seek to place a director on the Board, or publicly seek
the removal of any director of the Company, or call or seek to have called any
meeting of the stockholders of the Company or any “referendum” (whether or not
precatory) of the stockholders of the Company, wage a consent solicitation, or
execute any written consent in lieu of a meeting of the stockholders of the
Company in connection with the foregoing matters; (e) enter into any
arrangements or understandings with or advise or assist any third party with
respect to any of the foregoing prohibited actions listed in clauses (a) through
(d), including through the formation, joining of or participation in a “group”
with the meaning of Section 13(d)(3) of the Exchange Act (or act as a co-bidder
under Rule 14e-3 of the Exchange Act), in furtherance of any of the foregoing;
(f) advise, assist, encourage or knowingly finance any person in connection with
any of the foregoing prohibited actions listed in clauses (a) through (e); (g)
publicly disclose any plan, intention or proposal to do any of the prohibited
actions listed in clauses (a) through (f); (h) make any public disclosure, or
take any action that could require the Company to make any public disclosure,
with respect to any of the prohibited actions listed in clauses (a) through (g);
or (i) deposit any Company securities into a voting trust or subject them to any
voting agreement. For purposes of this Section 3.2(p), (i) “Acquisition
Transaction” means any transaction (whether merger, stock purchase, tender
offer, asset purchase or otherwise) or possible transaction involving the
acquisition of debt of the Company or greater than 50% of the Company’s voting
securities or all or substantially all of the Company’s assets and (ii) “Public”
(and other similar terms, such as “publicly”) means outside of a Board meeting.

 

18.

--------------------------------------------------------------------------------

4.

REGISTRATION RIGHTS

4.1 Definitions. For the purpose of this Section 4:

(a) the term “Resale Registration Statement” shall mean any registration
statement required to be filed by Section 4.2 below, and shall include any
preliminary prospectus, final prospectus, exhibit or amendment included in or
relating to such registration statements; and

(b) the term “Registrable Shares” means the Shares and the Pre-Funded Warrant
Shares; provided, however, that a security shall cease to be a Registrable Share
upon the earliest to occur of the following: (i) a Resale Registration Statement
registering such security under the Securities Act has been declared or becomes
effective and such security has been sold or otherwise transferred by the holder
thereof pursuant to and in a manner contemplated by such effective Resale
Registration Statement, (ii) such security is sold pursuant to Rule 144 under
circumstances in which any legend borne by such security relating to
restrictions on transferability thereof, under the Securities Act or otherwise,
is removed by the Company, (iii) such security is eligible to be sold pursuant
to Rule 144 without condition or restriction, including without any limitation
as to volume of sales, and without the Holder complying with any method of sale
requirements or notice requirements under Rule 144, or (iv) such security shall
cease to be outstanding following its issuance.

4.2 Registration Procedures and Expenses. The Company shall:

(a) use commercially reasonable efforts to file a Resale Registration Statement
(the “Mandatory Registration Statement”) with the Commission on or before the
date 60 days following the Closing Date (the “Filing Date”) to register the
applicable Registrable Shares on Form S-3 under the Securities Act (providing
for shelf registration of such Registrable Shares under Commission Rule 415);

(b) use its commercially reasonable efforts to cause each Mandatory Registration
Statement to be declared effective within 30 days following each Filing Date
(or, in the event the staff of the Commission (the “Staff”) reviews and has
written comments to any Mandatory Registration Statement, within 90 days
following the receipt of such written comments) (the earlier of the foregoing or
the applicable date set forth in Section 4.2(h), the “Effectiveness Date”), such
efforts to include, without limiting the generality of the foregoing, preparing
and filing with the Commission any financial statements or other information
that is required to be filed prior to the effectiveness of such Mandatory
Registration Statement;

(c) notwithstanding anything contained in this Agreement to the contrary, in the
event that the Commission limits the amount of Registrable Shares or otherwise
requires a reduction in the number of Registrable Shares that may be included
and sold by the Purchasers in a Mandatory Registration Statement (in each case,
subject to Section 4.3), then the Company shall prepare and file (i) within 20
business days of the first date or time that such excluded Registrable Shares
may then be included in a Resale Registration Statement if the Commission shall
have notified the Company that certain Registrable Shares were not eligible for
inclusion in such Resale Registration Statement or (ii) in all other cases,
within 30 days following the date that the Company becomes aware that such
additional Resale Registration Statement is required (the “Additional Filing
Date”), a Resale Registration Statement (any such Resale Registration Statement
registering such excluded Registrable Shares, an “Additional Registration
Statement”

 

19.

--------------------------------------------------------------------------------

and, together with the Mandatory Registration Statement, a “Resale Registration
Statement”) to register any Registrable Shares that have been excluded (or, if
applicable, the maximum number of such excluded Registrable Shares that the
Company is permitted to register for resale on such Additional Registration
Statement consistent with Commission guidance), if any, from being registered on
the Mandatory Registration Statement;

(d) use its commercially reasonable efforts to cause any such Additional
Registration Statement to be declared effective as promptly as practicable
following the Additional Filing Date, such efforts to include, without limiting
the generality of the foregoing, preparing and filing with the Commission any
financial statements or other information that is required to be filed prior to
the effectiveness of any such Additional Registration Statement;

(e) prepare and file with the Commission such amendments and supplements to such
Resale Registration Statements and the prospectus used in connection therewith
as may be necessary to keep such Resale Registration Statements continuously
effective and free from any material misstatement or omission to state a
material fact therein until termination of such obligation as provided in
Section 4.7 below, subject to the Company’s right to suspend pursuant to
Section 4.6;

(f) furnish to the Purchasers such number of copies of prospectuses in
conformity with the requirements of the Securities Act and such other documents
as the Purchasers may reasonably request, in order to facilitate the public sale
or other disposition of all or any of the Registrable Shares by the Purchasers;

(g) file such documents as may be required of the Company for normal securities
law clearance for the resale of the Registrable Shares in such states of the
United States as may be reasonably requested by the Purchasers and use its
commercially reasonable efforts to maintain such blue sky qualifications during
the period the Company is required to maintain effectiveness of the Resale
Registration Statements; provided, however, that the Company shall not be
required in connection with this Section 4.2(g) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction in which it is not now so qualified or has not so consented;

(h) upon notification by the Commission that a Resale Registration Statement
will not be reviewed or is not subject to further review by the Commission, the
Company shall within three business days following the date of such notification
request acceleration of such Resale Registration Statement (with the requested
effectiveness date to be not more than two business days later);

(i) upon notification by the Commission that that a Resale Registration
Statement has been declared effective by the Commission, the Company shall file
the final prospectus under Rule 424 of the Securities Act (“Rule 424”) within
the applicable time period prescribed by Rule 424;

(j) advise the Purchasers promptly:

 

20.

--------------------------------------------------------------------------------

(i) of the effectiveness of a Resale Registration Statement or any
post-effective amendments thereto;

(ii) of any request by the Commission for amendments to a Resale Registration
Statement or amendments to the prospectus or for additional information relating
thereto;

(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of a Resale Registration Statement under the Securities Act or of
the suspension by any state securities commission of the qualification of the
Registrable Shares for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes; and

(iv) of the existence of any fact and the happening of any event that makes any
statement of a material fact made in a Resale Registration Statement, the
prospectus and amendment or supplement thereto, or any document incorporated by
reference therein, untrue, or that requires the making of any additions to or
changes in a Resale Registration Statement or the prospectus in order to make
the statements therein not misleading;

(k) cause all Registrable Shares to be listed on each securities exchange, if
any, on which equity securities by the Company are then listed; and

(l) bear all expenses in connection with the procedures in paragraphs
(a) through (k) of this Section 4.2 and the registration of the Registrable
Shares on such Resale Registration Statement and the satisfaction of the blue
sky laws of such states.

4.3 Rule 415; Cutback.

If at any time the Staff takes the position that the offering of some or all of
the Registrable Shares in a Registration Statement is not eligible to be made on
a delayed or continuous basis under the provisions of Rule 415 under the
Securities Act or requires any Purchaser to be named as an “underwriter,” the
Company shall (in consultation with legal counsel to Ginkgo) use its
commercially reasonable efforts to persuade the Commission that the offering
contemplated by the Registration Statement is a valid secondary offering and not
an offering “by or on behalf of the issuer” as defined in Rule 415 and that none
of the Purchasers is an “underwriter.” In the event that, despite the Company’s
commercially reasonable efforts and compliance with the terms of this
Section 4.3, the Staff refuses to alter its position, the Company shall
(i) remove from the Registration Statement such portion of the Registrable
Shares (the “Cut Back Shares”) and/or (ii) agree to such restrictions and
limitations on the registration and resale of the Registrable Shares as the
Staff may require to assure the Company’s compliance with the requirements of
Rule 415 (collectively, the “SEC Restrictions”); provided, however, that the
Company shall not agree to name any Purchaser as an “underwriter” in such
Registration Statement without the prior written consent of such Purchaser. Any
cutback imposed on the Purchasers pursuant to this Section 4.3 shall be
allocated among the Purchasers on a pro rata basis, unless the SEC Restrictions
otherwise require or provide or the Purchasers holding a majority of the
Registrable Shares otherwise agree. No liquidated damages shall accrue as to any
Cut Back Shares until such date as the Company is able to effect the
registration of such Cut Back Shares in accordance with any SEC Restrictions
(such date, the “Restriction Termination Date” of such Cut Back Shares). From
and after the

 

21.

--------------------------------------------------------------------------------

Restriction Termination Date applicable to any Cut Back Shares, all of the
provisions of this Section 4 shall again be applicable to such Cut Back Shares;
provided, however, that (x) the Filing Deadline for the Registration Statement
including such Cut Back Shares shall be 20 business days after such Restriction
Termination Date, and (y) the Effectiveness Deadline with respect to such Cut
Back Shares shall be the 90th day immediately after the Restriction Termination
Date or the 120th day if the Staff reviews such Registration Statement (but in
any event no later than three Business Days from the Staff indicating it has no
further comments on such Registration Statement).

4.4 Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If either: (a) a Registration Statement covering the
applicable Registrable Shares required to be covered thereby and required to be
filed by the Company pursuant to this Agreement is: (i) not filed with the
Commission on or before the applicable Filing Date (a “Filing Failure”), or
(ii) not declared effective by the Commission on or before the Effectiveness
Date (an “Effectiveness Failure”), or (b) at any time after the Effectiveness
Date, sales of the applicable Registrable Shares required to be included on such
Registration Statement cannot be made (other than (i) as permitted under
Section 4.6, or (ii) if the Registration Statement is on Form S-1, for a period
of 15 days following the date the Company files a post-effective amendment to
incorporate the Company’s Annual Report on Form 10-K) pursuant to such
Registration Statement (including, without limitation, because of a failure to
keep such Registration Statement effective, to disclose such information as is
necessary for sales to be made pursuant to such Registration Statement or to
register a sufficient number of shares of Common Stock) (a “Maintenance
Failure”), then, in satisfaction of the damages to any holder of Registrable
Shares by reason of any such delay in or reduction of its ability to sell the
underlying shares of Common Stock, the Company shall pay to each holder of
Registrable Shares relating to such Registration Statement an amount in cash
equal to 1.0% of such holder’s pro rata interest in the aggregate purchase price
applicable to such Registrable Shares that are not then registered on each of
the following dates: (x) the day of a Filing Failure and on every 30th day
(prorated for periods totaling less than 30 days) thereafter until such Filing
Failure is cured; (y) the day of an Effectiveness Failure and on every 30th day
(prorated for periods totaling less than 30 days) thereafter until such
Effectiveness Failure is cured; and (z) the initial day of a Maintenance Failure
and on every 30th day (prorated for periods totaling less than 30 days)
thereafter until such Maintenance Failure is cured. The payments to which a
holder shall be entitled pursuant to this Section 4.4 are referred to herein as
“Registration Delay Payments”; provided that no Registration Delay Payments
shall be required following such time as when the Company’s registration
obligations terminate under Section 4.7, and provided further that in no event
shall the aggregate Registration Delay Payments accruing under this Section 4.4
exceed 10% of a holder’s aggregate purchase price. The first such Registration
Delay Payment shall be paid within three business days after the event or
failure giving rise to such Registration Delay Payment occurred and all other
Registration Delay Payments shall be paid on the earlier of (I) the last day of
the calendar month during which such Registration Delay Payments are incurred
and (II) the third business day after the event or failure giving rise to the
Registration Delay Payments is cured. If a given Purchaser elects to receive the
Registration Delay Payments as a remedy for any Filing Failure, Effectiveness
Failure or Maintenance Failure, then such Registration Delay Payments shall be
the sole recourse of those electing Purchasers for any Filing Failure,
Effectiveness Failure or Maintenance Failure (and, for the avoidance of doubt,
this sentence shall not limit the rights of any Purchaser that does not elect to
receive, or does not receive, the Registration Delay Payments).

 

22.

--------------------------------------------------------------------------------

4.5 Indemnification.

(a) The Company agrees to indemnify and hold harmless the Purchasers, and the
partners, members, officers and directors of the Purchasers and each person, if
any, who controls the Purchasers within the meaning of the Securities Act or the
Exchange Act, from and against any losses, claims, damages or liabilities to
which they may become subject (under the Securities Act or otherwise) insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any material breach of this
Agreement by the Company or any untrue statement or alleged untrue statement of
a material fact contained in a Resale Registration Statement or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading or arise out of any failure by the Company
to fulfill any undertaking included in a Resale Registration Statement and the
Company will, as incurred, reimburse the Purchasers, and their partners,
members, officers, directors or controlling Persons for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided, however, that the Company shall
not be liable in any such case to the extent that such loss, claim, damage or
liability (collectively, “Loss”) arises out of, or is based upon: (i) an untrue
statement or omission or alleged untrue statement or omission made in such
Resale Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Purchasers, or their
partners, members, officers, directors or controlling persons specifically for
use in preparation of a Resale Registration Statement; or (ii) any breach of
this Agreement by the Purchasers; provided further, however, that the Company
shall not be liable to the Purchasers (or any partner, member, officer, director
or controlling Person of the Purchasers) to the extent that any such Loss is
caused by an untrue statement or omission or alleged untrue statement or
omission made in any preliminary prospectus if either (i) (A) any Purchaser
failed to send or deliver a copy of the final prospectus with or prior to, or
any Purchaser failed to confirm that a final prospectus was deemed to be
delivered prior to (in accordance with Rule 172 of the Securities Act), the
delivery of written confirmation of the sale by a Purchaser to the Person
asserting the claim from which such Loss resulted and (B) the final prospectus
corrected such untrue statement or omission, (ii) (X) such untrue statement or
omission is corrected in an amendment or supplement to the prospectus and
(Y) having previously been furnished by or on behalf of the Company with copies
of the prospectus as so amended or supplemented or notified by the Company that
such amended or supplemented prospectus has been filed with the Commission, in
accordance with Rule 172 of the Securities Act, any Purchaser thereafter fails
to deliver such prospectus as so amended or supplemented, with or prior to or a
Purchaser fails to confirm that the prospectus as so amended or supplemented was
deemed to be delivered prior to (in accordance with Rule 172 of the Securities
Act), the delivery of written confirmation of the sale by a Purchaser to the
person asserting the claim from which such Loss resulted or (iii) a Purchaser
sold Registrable Shares in violation of such Purchasers’ covenant contained in
Section 3.2 of this Agreement.

(b) The Purchasers agree, severally and not jointly, to indemnify and hold
harmless the Company (and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, each officer of the Company who signs a Resale

 

23.

--------------------------------------------------------------------------------

Registration Statement and each director of the Company), from and against any
Losses to which the Company (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar as
such Losses (or actions or proceedings in respect thereof) arise out of, or are
based upon, any material breach of this Agreement by the Purchasers or untrue
statement or alleged untrue statement of a material fact contained in a Resale
Registration Statement (or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading in each case, on the effective date thereof), if, and only to the
extent, such untrue statement or omission or alleged untrue statement or
omission was made in reliance upon and in conformity with written information
furnished by or on behalf of the Purchasers specifically for use in preparation
of a Resale Registration Statement, and the Purchasers, severally and not
jointly, will reimburse the Company (and each of its officers, directors or
controlling persons) for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided, however, that in no event shall any indemnity under this
Section 4.5(b) be greater in amount than the dollar amount of the proceeds
received by the Purchasers upon the sale of such Registrable Shares.

(c) Promptly after receipt by any indemnified person of a notice of a claim or
the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 4.5, such indemnified
person shall notify the indemnifying person in writing of such claim or of the
commencement of such action, and, subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person and such
indemnifying person shall have been notified thereof, such indemnifying person
shall be entitled to participate therein, and, to the extent that it shall wish,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such
indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any legal
expenses subsequently incurred by such indemnified person in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate in the reasonable judgment
of the indemnified person for the same counsel to represent both the indemnified
person and such indemnifying person or any affiliate or associate thereof, the
indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person; provided, further, that no indemnifying person shall
be responsible for the fees and expense of more than one separate counsel for
all indemnified parties. The indemnifying party shall not settle an action
without the consent of the indemnified party, which consent shall not be
unreasonably withheld.

(d) If the indemnification provided for in this Section 4.5 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any Losses referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall to the extent permitted by
applicable law contribute to the amount paid or payable by such indemnified
party as a result of such Loss in such proportion as is appropriate to reflect
the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other, as well as any other relevant equitable
considerations; provided, that in no event shall any contribution by an
indemnifying party hereunder be greater in amount than the dollar amount of the
proceeds received by such indemnifying party upon the sale of such Registrable
Shares.

 

24.

--------------------------------------------------------------------------------

4.6 Prospectus Suspension. Each Purchaser acknowledge that there may be times
when the Company must suspend the use of the prospectus forming a part of a
Resale Registration Statement until such time as an amendment to a Resale
Registration Statement has been filed by the Company and declared effective by
the Commission, or until such time as the Company has filed an appropriate
report with the Commission pursuant to the Exchange Act. Each Purchaser hereby
covenants that it will not sell any Registrable Shares pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchasers notice of the suspension of the use of said prospectus and ending
at the time the Company gives the Purchasers notice that the Purchasers may
thereafter effect sales pursuant to said prospectus; provided, that such
suspension periods shall in no event exceed 60 days in any 12 month period and
that, in the good faith judgment of the Board, the Company would, in the absence
of such delay or suspension hereunder, be required under state or federal
securities laws to disclose any corporate development, a potentially significant
transaction or event involving the Company, or any negotiations, discussions, or
proposals directly relating thereto, in either case the disclosure of which
would reasonably be expected to have a Material Adverse Effect upon the Company
or its stockholders.

4.7 Termination of Obligations. The obligations of the Company pursuant to
Section 4.2 hereof shall cease and terminate, with respect to any Registrable
Shares, upon the earlier to occur of (a) such time such Registrable Shares have
been resold, or (b) such time as such Registrable Shares no longer remain
Registrable Shares pursuant to Section 4.1(b) hereof.

4.8 Reporting Requirements.

(a) With a view to making available the benefits of certain rules and
regulations of the Commission that may at any time permit the sale of the
Securities to the public without registration or pursuant to a registration
statement on Form S-3, the Company agrees to use:

(i) make and keep public information available, as those terms are understood
and defined in Rule 144;

(ii) file with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and

(iii) so long as a Purchaser owns Registrable Shares, to furnish to such
Purchaser upon request (A) a written statement by the Company as to whether it
is in compliance with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, or whether it is qualified as a registrant whose
securities may be resold pursuant to Commission Form S-3, (B) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company and (C) such other information as may be
reasonably requested to permit the Purchaser to sell such securities pursuant to
Rule 144.

4.9 Blue Sky. The Company shall obtain and maintain all necessary blue sky law
permits and qualifications, or secured exemptions therefrom, required by any
state for the offer and sale of Registrable Shares; provided, however, that the
Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.

 

25.

--------------------------------------------------------------------------------

5.

OTHER AGREEMENTS OF THE PARTIES

5.1 Integration. Except as contemplated by the terms of this Agreement, the
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities such that
the rules of the Trading Market would require shareholder approval of this
transaction prior to the closing of such other transaction unless shareholder
approval is obtained before the closing of such subsequent transaction.

5.2 Securities Laws Disclosure; Publicity. The Company shall: (a) issue a press
release disclosing the material terms of the transactions contemplated hereby
promptly following the execution and delivery hereof (the “Press Release”), and
(b) by 5:30 p.m. (New York City time) on the fourth Trading Day following the
date hereof, file a Current Report on Form 8-K disclosing the material terms of
the transactions contemplated hereby (the “Form 8-K”). From and after the
issuance of the Press Release, no Purchaser shall be in possession of any
material, non-public information received from the Company or any of their
respective officers, directors or employees that is not disclosed in the Press
Release.

5.3 Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it nor any other person acting on its
behalf will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information.

5.4 Use of Proceeds. The Company will use the proceeds from the offering to
progress and expand its pipeline, including initiating four new programs in the
first six months following the Closing Date and five new programs in the next 12
months following the Closing Date.

5.5 Reservation of Common Stock. As of the date hereof, the Company has reserved
and the Company shall continue to reserve and keep available at all times, free
of preemptive rights, a sufficient number of shares of Common Stock for the
purpose of enabling the Company to issue the Shares and the Pre-Funded Warrant
Shares.

5.6 Share Purchase Price. The Company and Purchaser agree that the Share
Purchase Price is not less than the fair market value per share of the Shares
purchased by Purchaser pursuant to Section 2.1.

 

6.

MISCELLANEOUS

6.1 Termination. This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect whatsoever on the
obligations between the Company and the other Purchasers, by written notice to
the other parties, if the Closing has not been consummated within ten calendar
days from the Effective Date through no fault of such Purchaser; provided,
however, that no such termination will affect the right of any party to sue for
any breach by the other party (or parties).

 

26.

--------------------------------------------------------------------------------

6.2 Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. Notwithstanding the foregoing, the
Company shall pay all transfer agent fees, stamp taxes and other taxes and
duties levied in connection with the delivery of any Securities to the
Purchasers.

6.3 Entire Agreement. The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such subject matter, which the
parties acknowledge have been merged into such documents, exhibits and
schedules.

6.4 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective upon actual receipt via mail, courier or confirmed email by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.

6.5 Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by (a) the
Company and (b) Purchasers holding at least a majority of the Shares and the
Pre-Funded Warrant Shares (as a single class on an as-converted to Common Stock
basis) and then-held by a Purchaser or, in the case of a waiver, by the party
against whom enforcement of any such waived provision is sought. No waiver of
any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.

6.6 Headings. The headings herein are for convenience only, do not constitute a
part of this Agreement and shall not be deemed to limit or affect any of the
provisions hereof.

6.7 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their permitted successors and assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). The
Purchasers may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Company (other than by merger).

6.8 Third-Party Beneficiaries. This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns and is not
for the benefit of, nor may any provision hereof be enforced by, any other
person.

 

27.

--------------------------------------------------------------------------------

6.9 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State of New York
for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or is an inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other
manner permitted by law. If either party shall commence an action or proceeding
to enforce any provisions of the Transaction Documents, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

6.10 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to each other party, it being understood that the parties need not
sign the same counterpart. In the event that any signature on this Agreement is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a legally valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the
same force and effect as if such facsimile or “.pdf” signature page were an
original thereof.

6.11 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

6.12 Rescission and Withdrawal Right. Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the

 

28.

--------------------------------------------------------------------------------

Company does not timely perform its related obligations within the periods
therein provided, then such Purchaser may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future
actions and rights.

6.13 Replacement of Securities. If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable indemnity or bond, if requested. The applicant for a new certificate
or instrument under such circumstances shall also pay any reasonable third-party
costs (including customary indemnity) associated with the issuance of such
replacement Securities.

6.14 Independent Nature of Purchasers’ Obligations and Rights. The obligations
of each Purchaser under any Transaction Document are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in
any way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

6.15 Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.

6.16 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

[Remainder of page intentionally left blank.]

 

29.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

 

SYNLOGIC, INC. /s/ Aoife Brennan

Name: Aoife Brennan

Title: President and Chief Executive Officer

Address for Notice: 301 Binney St., Suite 402       Cambridge, MA 02142

Email: aoife@synlogictx.com

Attention: Aoife Brennan

With a copy to (which shall not constitute notice): Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. One Financial Center Boston, MA 02111 Email:
ljgeffen@mintz.com; dabagliebter@mintz.com Attention: Lewis J. Geffen; Daniel A.
Bagliebter

 

30.

--------------------------------------------------------------------------------

PURCHASERS: GINKGO BIOWORKS, INC.:  

 

By:   /s/ Jason Kelly Name:   Jason Kelly Title:   Chief Executive Officer

Address:   27 Drydock Avenue   8th Floor   Boston, MA 02210 Contact: Jason Kelly
Email: jason@ginkgobioworks.com

 

31.

--------------------------------------------------------------------------------

EXHIBIT A

CLOSING SCHEDULE

 

Name

   Shares of
Common Stock
to be Purchased      Aggregate
Purchase Price
for Common
Stock      Pre-Funded
Warrants
to be
Purchased      Aggregate
Purchase Price
for Pre-Funded
Warrant      Aggregate
Purchase Price
for Common
Stock and
Pre-Funded
Warrants  

Ginkgo Bioworks, Inc.

     6,340,771      $ 57,066,939.00        2,548,117      $ 22,907,571.83      $
79,974,510.83  

 

32.