Exhibit 10.1

Execution Version

EQUITY COMMITMENT AND INVESTMENT AGREEMENT

dated as of April 14, 2019

by and among

Catalent, Inc.,

Green Equity Investors VII, L.P.

and

Green Equity Investors Side VII, L.P.

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I PURCHASE; CLOSING

     1  

1.1

 

Purchase

     1  

1.2

 

Closing

     1  

1.3

 

Closing Conditions

     3  

ARTICLE II REPRESENTATIONS AND WARRANTIES

     5  

2.1

 

Representations and Warranties of the Company

     5  

2.2

 

Representations and Warranties of the Purchaser

     18  

ARTICLE III COVENANTS

     22  

3.1

 

Filings; Other Actions

     22  

3.2

 

Reasonable Best Efforts to Close

     23  

3.3

 

Authorized Common Stock

     24  

3.4

 

Certain Adjustments

     24  

3.5

 

Confidentiality

     24  

3.6

 

NYSE Listing of Shares

     25  

3.7

 

State Securities Laws

     25  

3.8

 

Negative Covenants

     25  

3.9

 

Merger Agreement and Debt Financing

     26  

3.10

 

Investor Information

     27  

ARTICLE IV ADDITIONAL AGREEMENTS

     27  

4.1

 

Legend

     27  

4.2

 

Tax Matters

     28  

ARTICLE V INDEMNITY

     29  

5.1

 

Indemnification by the Company

     29  

5.2

 

Indemnification by the Purchaser

     30  

5.3

 

Indemnification Procedure

     30  

5.4

 

Tax Matters

     31  

5.5

 

Survival

     31  

5.6

 

Limitation on Damages

     32  

ARTICLE VI MISCELLANEOUS

     32  

6.1

 

Expenses

     32  

6.2

 

Amendment; Waiver

     32  

6.3

 

Counterparts; Electronic Transmission

     32  

6.4

 

Governing Law

     32  

 

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TABLE OF CONTENTS

(Cont’d)

 

         Page  

6.5

 

WAIVER OF JURY TRIAL

     33  

6.6

 

Notices

     33  

6.7

 

Entire Agreement

     34  

6.8

 

Assignment

     34  

6.9

 

Interpretation; Other Definitions

     35  

6.10

 

Captions

     39  

6.11

 

Severability

     39  

6.12

 

No Third Party Beneficiaries

     40  

6.13

 

Public Announcements

     40  

6.14

 

Specific Performance

     40  

6.15

 

Termination

     40  

6.16

 

Effects of Termination

     41  

6.17

 

Non-Recourse

     41  

 

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INDEX OF DEFINED TERMS

 

Term

  

Location of Definition

Affiliate

  

6.9(f)

Aggregate Purchase Price

  

1.1(a)

Agreement

  

Preamble

Alternate Financing

  

6.9(g)

Board of Directors

  

2.1(c)(1)

Business Day

  

6.9(d)

Buyer

  

Recitals

Bylaws

  

2.1(c)(2)

Capitalization Date

  

2.1(b)(1)

Certificate of Incorporation

  

2.1(c)(2)

Closing

  

1.2(a)

Closing Date

  

1.2(a)

Code

  

4.2(a)

Common Stock

  

Recitals

Company

  

Preamble

Company Disclosure Schedules

  

2.1

Company Material Adverse Effect

  

6.9(h)

Company Payment Amount

  

1.1(c)

Company Permit

  

6.9(i)

Company Related Parties

  

5.2

Company Securities

  

2.1(b)(2)

Company Stock Awards

  

2.1(b)(1)

Company Stock Options

  

2.1(b)(1)

Company Subsidiary

  

2.1(a)(2)

Confidentiality Agreement

  

3.5

control/controlled by/under common control with

  

6.9(f)

Credit Agreement

  

6.9(j)

DEA

  

2.1(t)(2)

Debt Commitment Letter

  

6.9(k)

Debt Financing

  

6.9(l)

Effect

  

6.9(m)

Environmental Law

  

6.9(n)

ERISA

  

6.9(o)

Exchange Act

  

2.1

FATCA

  

6.9(p)

FDA

  

2.1(t)(2)

Fund VII

  

Preamble

Fund Side VII

  

Preamble

GAAP

  

2.1(f)(4)

Government Entity

  

2.1(u)

Government Official

  

2.1(u)

Governmental Entity

  

6.9(q)

 

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Term

  

Location of Definition

Health Care Laws

  

2.1(t)(1)

herein/hereof/hereunder

  

6.9(c)

HSR Act

  

3.1

including/includes/included/include

  

6.9(b)

Indemnified Party

  

5.3(b)

Indemnifying Party

  

5.3(b)

Indentures

  

6.9(r)

Information

  

3.5

Intellectual Property

  

6.9(s)

Knowledge of the Company

  

6.9(t)

Knowledge of the Purchaser

  

6.9(u)

Law

  

6.9(v)

Lien

  

6.9(w)

Losses

  

5.1

Material Adverse Impact

  

6.9(x)

Materials of Environmental Concern

  

6.9(y)

Maximum Commitment Amount

  

1.1(a)

Merger

  

Recitals

Merger Agreement

  

Recitals

Merger Closing

  

6.9(z)

Merger Closing Date

  

6.9(aa)

Merger Sub

  

Recitals

Non-Recourse Party

  

6.17

NYSE

  

1.3(b)(5)

Order

  

6.9(bb)

Permitted Transferee

  

6.9(cc)

person

  

6.9(e)

Plan

  

6.9(dd)

Pre-Closing Period

  

3.1

Preferred Stock

  

Recitals

Purchase Notice

  

1.1(b)

Purchase Price

  

1.1(a)

Purchased Shares

  

1.1(b)

Purchaser

  

Preamble

Purchaser Related Parties

  

5.1

Registration Rights Agreement

  

6.9(ee)

SEC

  

6.9(ff)

SEC Documents

  

2.1(f)(1)

Securities Act

  

2.1

Series A Certificate

  

Recitals

Series A Preferred Stock

  

Recitals

Stockholders’ Agreement

  

6.9(gg)

Submissions

  

2.1(t)(3)

Subsidiary

  

2.1(a)(2)

 

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Term

  

Location of Definition

Target

  

Recitals

Target Material Adverse Effect

  

6.9(hh)

Tax Return

  

6.9(ii)

Taxes

  

6.9(jj)

Third Party Claim

  

5.3(b)

Transaction Documents

  

6.9(kk)

Treasury Regulations

  

6.9(ll)

Voting Debt

  

2.1(b)(2)

LIST OF SCHEDULES

 

Schedule A:

  

Form of Series A Convertible Preferred Stock Certificate of Designation

Schedule B:

  

Form of Registration Rights Agreement

Schedule C:

  

Form of Stockholders’ Agreement

 

 

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EQUITY COMMITMENT AND INVESTMENT AGREEMENT, dated as of April 14, 2019 (this
“Agreement”), by and among Catalent, Inc., a Delaware corporation (the
“Company”), and each of Green Equity Investors VII, L.P., a Delaware limited
partnership (“Fund VII”), and Green Equity Investors Side VII, L.P., a Delaware
limited partnership (“Fund Side VII” and, together with Fund VII, the
“Purchaser”). The obligations of the Purchaser set forth in this Agreement shall
be several and not joint among Fund VII and Fund Side VII and apportioned in
percentages of 45.83720% and 54.16280%, respectively.

RECITALS:

WHEREAS, simultaneously with the execution and delivery of this Agreement,
Catalent Pharma Solutions, Inc., a wholly owned subsidiary of the Company
(“Buyer”), is entering into an Agreement and Plan of Merger (the “Merger
Agreement”), by and among Buyer, solely with respect to Section 4.12 (solely
with respect to the Equity Financing (as defined therein)) and Section 8.19
thereof, the Company, a wholly owned subsidiary of the Buyer (“Merger Sub”),
Paragon Bioservices, Inc., a Delaware corporation (“Target”), and Pearl
Shareholder Representative, LLC, a Delaware limited liability company, as
representative of the Company Securityholders (as defined therein), pursuant to,
and on the terms and subject to the conditions of which, Buyer will acquire
Target by means of the merger of Merger Sub with and into Target (the “Merger”),
with Target continuing as the surviving entity of the Merger;

WHEREAS, the Company proposes to issue and sell to the Purchaser (including its
permitted assignees pursuant to Section 6.8) shares of its preferred stock, par
value $0.01 per share (“Preferred Stock”), designated as “Series A Convertible
Preferred Stock” (the “Series A Preferred Stock”), having the terms set forth in
the Certificate of Designation (the “Series A Certificate”) in substantially the
form attached to this Agreement as Schedule A, subject to the terms and
conditions set forth in this Agreement;

WHEREAS, the Series A Preferred Stock will be convertible into shares of common
stock, par value $0.01 per share, of the Company (the “Common Stock”); and

WHEREAS, capitalized terms used in this Agreement have the meanings set forth in
Section 6.9 or such other section indicated in the preceding Index of Defined
Terms.

NOW, THEREFORE, in consideration of the premises recited above and the mutual
covenants, representations, warranties and agreements contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:

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ARTICLE I

PURCHASE; CLOSING

1.1 Purchase.

(a) On the terms and subject to the conditions herein, on the Closing Date, the
Company agrees to sell and issue to the Purchaser, and the Purchaser agrees to
purchase from the Company no more than 1,000,000 shares of Series A Preferred
Stock in the aggregate (such number of shares of Series A Preferred Stock, the
“Maximum Commitment Amount”) and no fewer than 650,000 shares of Series A
Preferred Stock in the aggregate, free and clear of any Liens (other than Liens
incurred by the Purchaser or restrictions arising under applicable securities
Laws and the Stockholders’ Agreement), at a purchase price of $1,000 per share
of Series A Preferred Stock (the “Purchase Price” per share of Series A
Preferred Stock; the Purchase Price multiplied by the number of Purchased
Shares, the “Aggregate Purchase Price”).

(b) The Company shall use its reasonable best efforts to, no later than ten
(10) Business Days prior to the Closing Date, deliver a written notice (the
“Purchase Notice”) to the Purchaser specifying (subject to and in accordance
with the terms and conditions of this Section 1.1) the number of shares of
Series A Preferred Stock to be purchased and sold at the Closing, not to exceed
the Maximum Commitment Amount (the shares so specified, the “Purchased Shares”);
provided that in no event shall the Company deliver the Purchase Notice to the
Purchaser later than the date on which the approval or authorization of the
transactions contemplated by the Merger Agreement by each applicable
Governmental Entity is granted, or any applicable waiting period is terminated
or expires, under the HSR Act. Upon delivery of the Purchase Notice specifying
the number of Purchased Shares, the Company shall be required to sell, and the
Purchaser shall be required to purchase, such number of shares of Series A
Preferred Stock at the Closing, subject to the terms and conditions of this
Agreement, including the conditions to Closing set forth in Section 1.3.

(c) If (i) the Company delivers the Purchase Notice more than ten (10) Business
Days after the date of this Agreement, and (ii) the Company elects in the
Purchase Notice to sell fewer shares of Series A Preferred Stock than the
Maximum Commitment Amount, then, at the Closing, the Company shall pay to the
Purchaser, in accordance with the percentages set forth in the last line of the
preamble, an amount in cash equal to the product of (A) $25.00, multiplied by
(B) the difference between (1) the Maximum Commitment Amount, minus (2) the
number of Purchased Shares (such product, the “Company Payment Amount”). For the
avoidance of doubt, if the Company delivers the Purchase Notice to the Purchaser
on or before the date that is ten (10) Business Days after the date of this
Agreement, then the Company shall not be required to pay the Company Payment
Amount hereunder.

1.2 Closing.

(a) Subject to the satisfaction or waiver (to the extent any such waiver is
permitted by applicable Law) of the conditions set forth in this Agreement, the
closing of the purchase by the Purchaser of the Purchased Shares referred to in
Section 1.1 pursuant to this Agreement (the “Closing”) shall be held at the
offices of Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New
York, New York 10004 simultaneously with the Merger Closing Date or at such
other date, time and place as the Company and the Purchaser agree (the “Closing
Date”).

(b) Subject to the satisfaction or waiver (to the extent any such waiver is
permitted by applicable Law) on or prior to the Closing Date of the applicable
conditions to the Closing in Section 1.3, at the Closing:

 

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(1) the Company will deliver to the Purchaser (i) evidence of entry in the stock
ledger of the Purchaser’s ownership of the Purchased Shares reasonably
acceptable to the Purchaser, (ii) to bank account(s) designated by Purchaser in
writing at least two (2) Business Days prior to the Closing Date, the Company
Payment Amount by wire transfer of immediately available funds, if applicable,
(iii) the executed Registration Rights Agreement, in substantially the form of
Schedule B hereto, and (iv) the executed Stockholders’ Agreement, in
substantially the form of Schedule C hereto, and (v) all other documents,
instruments and writings required to be delivered by the Company to the
Purchaser pursuant to this Agreement; and

(2) the Purchaser will deliver or cause to be delivered (i) to a bank account
designated by the Company in writing at least two (2) Business Days prior to the
Closing Date, the Aggregate Purchase Price by wire transfer of immediately
available funds, (ii) the executed Registration Rights Agreement, (iii) the
executed Stockholders’ Agreement, and (iv) all other documents, instruments and
writings required to be delivered by the Purchaser to the Company pursuant to
this Agreement.

(c) All deliveries at the Closing will be deemed to occur simultaneously.

1.3 Closing Conditions.

(a) The obligation of the Purchaser, on the one hand, and the Company, on the
other hand, to effect the Closing is subject to the satisfaction or written
waiver (to the extent any such waiver is permitted by applicable Law) by the
Purchaser and the Company prior to the Closing of the following conditions:

(1) no Governmental Entity shall have enacted, issued, promulgated, enforced or
entered any Order (whether temporary, preliminary or permanent), in any case
that is in effect and prevents or prohibits the consummation of the transactions
contemplated hereby; and

(2) all required filings under the HSR Act shall have been completed and all
applicable waiting periods shall have expired or been terminated.

(b) The obligation of the Purchaser to effect the Closing is also subject to the
satisfaction or written waiver (to the extent any such waiver is permitted by
applicable Law) by the Purchaser at or prior to the Closing of the following
conditions:

(1) (i) the representations and warranties of the Company set forth in
Section 2.1 hereof (other than Sections 2.1(a)(1), 2.1(b), 2.1(c)(1), 2.1(d),
2.1(e), 2.1(h), and 2.1(s)(1)) shall be true and correct (disregarding all
qualifications or limitations therein as to materiality or Company Material
Adverse Effect) as of the date of this Agreement and as of the Closing Date as
though made on and as of such date (except to the extent that such
representation or warranty speaks to an earlier date, in which case such
representation or warranty shall be true and correct as of such earlier date),
except where the failure of such representations and warranties to be so true
and correct would not, individually or in the aggregate, have a Company Material
Adverse Effect, (ii) the representations and

 

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warranties of the Company set forth in Sections 2.1(a)(1), 2.1(b), 2.1(c)(1),
2.1(d), 2.1(e), and 2.1(h) shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date as though made on and
as of such date, and (iii) the representations and warranties of the Company set
forth in Section 2.1(s)(1) shall be true and correct in all respects as of the
date of this Agreement and as of the Closing Date as though made on and as of
such date;

(2) the Company shall have performed in all material respects all obligations
required to be performed by it pursuant to this Agreement at or prior to the
Closing;

(3) the Purchaser shall have received a certificate signed on behalf of the
Company by a duly authorized person certifying to the effect that the conditions
set forth in Sections 1.3(b)(1) and (2) have been satisfied;

(4) the Company shall have adopted and filed the Series A Certificate with the
Secretary of State of the State of Delaware, and the Series A Certificate shall
be in full force and effect;

(5) the shares of Common Stock issuable upon conversion of the Series A
Preferred Stock shall have been approved for listing on the New York Stock
Exchange (the “NYSE”), subject to official notice of issuance;

(6) the Board of Directors shall have taken all actions necessary, (i) without
expanding the Board of Directors beyond eleven (11) directors, to cause to be
appointed to the Board of Directors, effective immediately upon the Closing,
Peter Zippelius, subject to compliance with applicable Law and NYSE rules
regarding qualification and completion by such individual of a customary D&O
questionnaire and such other customary documentation or agreements that the
Company generally requires from its independent directors or candidates for
director, and (ii) to acknowledge and affirm that John Baumer shall be a
non-voting observer to the Board of Directors entitled to the rights and subject
to the obligations set forth in the Stockholders’ Agreement, effective
immediately upon the Closing, subject to completion by such individual of such
customary documentation or agreements that the Company generally requires from
its independent directors or candidates for director, and the Purchaser shall
have received a certificate signed on behalf of the Company by a duly authorized
person certifying as to the effectiveness of the taking of such actions pursuant
to an excerpt of resolutions duly passed by the Board of Directors;

(7) the Merger shall have been consummated or shall be consummated substantially
simultaneously with the Closing on the terms and conditions contemplated by the
Merger Agreement (subject to any amendment, supplement, waiver or other
modification to the Merger Agreement not prohibited by Section 3.9 or otherwise
consented to in writing by the Purchaser);

(8) the Debt Financing (or any Alternate Financing) shall have been, or
substantially concurrently with the funding of the Aggregate Purchase Price
shall be, consummated in an amount sufficient (together with the proceeds from
the funding of the Aggregate Purchase Price and cash on hand) for Buyer to
consummate the Merger;

 

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(9) from the date of this Agreement through the Closing Date, no Target Material
Adverse Effect shall have occurred; and

(10) the Company shall have provided the Purchaser with written notice of the
Closing Date at least three (3) Business Days’ prior to the Closing Date.

(c) The obligation of the Company to effect the Closing is also subject to the
satisfaction or written waiver (to the extent any such waiver is permitted by
applicable Law) by the Company prior to the Closing of the following conditions:

(1) (i) the representations and warranties of the Purchaser set forth in
Section 2.2 hereof (other than Sections 2.2(a), 2.2(b)(1), 2.2(b)(2)(i)(A),
2.2(c), 2.2(f), and 2.2(j)) shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on and as of such date
(except to the extent that such representation or warranty speaks of an earlier
date, in which case such representation or warranty shall be true and correct as
of such earlier date), except where the failure of such representations and
warranties to be so true and correct would not, individually or in the
aggregate, prevent or materially delay the consummation of the transactions
contemplated by this Agreement or have a material adverse effect on the ability
of the Purchaser to fully perform its covenants and obligations under the
Transaction Documents, and (ii) the representations and warranties of the
Purchaser set forth in Sections 2.2(a), 2.2(b)(1), 2.2(b)(2)(i)(A), 2.2(c),
2.2(f), and 2.2(j) shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as of
such date;

(2) the Purchaser shall have performed in all material respects all obligations
required to be performed by it pursuant to this Agreement at or prior to the
Closing;

(3) the Company shall have received a certificate signed on behalf of the
Purchaser by a duly authorized person certifying to the effect that the
conditions set forth in Sections 1.3(c)(1) and (2) have been satisfied; and

(4) the Merger shall have been consummated or shall be consummated substantially
simultaneously with the Closing.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1 Representations and Warranties of the Company. Except as set forth (x) in
SEC Documents filed with or furnished to the SEC prior to the date of this
Agreement, excluding any disclosure set forth in any risk factor section, any
disclosure in any section relating to forward-looking statements and any other
disclosure included in any such form, report, schedule, statement or other
document to the extent such disclosure is predictive or forward-looking in
nature or constitutes a “forward looking statement” within the meaning of the
Securities Act of 1933, as amended (the “Securities Act”), or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or (y) in a
correspondingly identified schedule separately provided by the Company to the
Purchaser on the date hereof (the “Company Disclosure Schedules”) (provided

 

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that any such disclosure set forth on one section or subsection of such schedule
shall be deemed to be disclosed with respect to each other representation and
warranty to which the relevance of such exception is reasonably apparent on the
face of such disclosure), the Company represents and warrants to the Purchaser,
as of the date hereof and as of the Closing Date (except to the extent made only
as of a specified date in which case as of such date), that:

(a) Organization and Authority.

(1) The Company is a duly organized and validly existing Delaware corporation,
has all requisite corporate power and authority to own its properties and
conduct its business as presently conducted, is duly qualified to do business
and is in good standing in all jurisdictions where its ownership or leasing of
property or the conduct of its business requires it to be so qualified, except
where failure to be so qualified or in good standing would not, individually or
in the aggregate, reasonably be expected to have Company Material Adverse
Effect. True and accurate copies of the Certificate of Incorporation and Bylaws,
each as in effect as of the date of this Agreement, are publicly available in
the SEC Documents.

(2) Each of the Company’s Significant Subsidiaries (as defined in Rule 1-02 of
Regulation S-X under the Securities Act) is duly organized and validly existing
under the Laws of its jurisdiction of organization, has all requisite corporate
or other applicable entity power and authority to own its properties and conduct
its business as presently conducted, is duly qualified to do business and is in
good standing (where such concept is recognized under applicable Law) in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified, except where failure to be so qualified
or in good standing (where such concept is recognized under applicable Law)
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. As used herein, “Subsidiary” means, with
respect to any specified person, any corporation, partnership, joint venture,
limited liability company or other entity (i) of which such specified person or
a Subsidiary of such specified person is a general partner, or (ii) of which a
majority of the voting securities or other voting interests, or a majority of
the securities or other interests of which having by their terms ordinary voting
power to elect a majority of the board of directors or persons performing
similar functions with respect to such person, is directly or indirectly owned
by such specified person or one or more subsidiaries thereof; and “Company
Subsidiary” means any Subsidiary of the Company.

(b) Capitalization.

(1) The authorized capital stock of the Company consists of 1,000,000,000 shares
of Common Stock and 100,000,000 shares of Preferred Stock. As of the close of
business on April 11, 2019 (the “Capitalization Date”), there were 145,706,760
shares of Common Stock (including shares of time-vesting and performance-vesting
restricted stock, assuming achievement of maximum performance thresholds with
respect to any such performance-vesting restricted stock) issued and outstanding
and zero shares of Preferred Stock issued and outstanding. As of the close of
business on the Capitalization Date, (i)

 

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1,896,207 shares of Common Stock were reserved for issuance upon the exercise of
stock options outstanding on such date (“Company Stock Options”), 1,024,597
shares of Common Stock were reserved for issuance upon the settlement or payment
of time-based restricted stock units outstanding on such date, and 959,914
shares of Common Stock were reserved for issuance upon the settlement or payment
of performance-based restricted stock units (assuming achievement of maximum
performance thresholds) outstanding on such date (such time-based restricted
stock units and such performance-based restricted stock units, collectively, the
“Company Stock Awards”), and (ii) zero shares of Common Stock were held by the
Company in its treasury. All of the issued and outstanding shares of Common
Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. From the Capitalization Date
through and as of the date of this Agreement, no other shares of Common Stock or
Preferred Stock have been issued other than shares of Common Stock issued in
respect of the exercise of Company Stock Options or grant or payment of Company
Stock Awards in the ordinary course of business. The Company does not have
outstanding stockholder rights or “poison pill” or any similar arrangement in
effect.

(2) No bonds, debentures, notes or other indebtedness having the right to vote
(or convertible into or exchangeable for, securities having the right to vote)
on any matters on which the stockholders of the Company may vote (“Voting Debt”)
are issued and outstanding. Except (i) pursuant to any cashless exercise
provisions of any Company Stock Options or pursuant to the surrender of shares
to the Company or the withholding of shares by the Company to cover tax
withholding obligations under Company Stock Options or Company Stock Awards, and
(ii) as set forth in Section 2.1(b)(1), there are no outstanding equity
securities of the Company, the Company does not have and is not bound by any
outstanding options, preemptive rights, rights of first offer, warrants, calls,
or other similar rights or written commitments or agreements calling for the
purchase, redemption or issuance of, or securities or rights convertible into,
or exchangeable for, any shares of Common Stock or any other equity securities
of the Company or Voting Debt or any securities representing the right to
purchase or otherwise receive any equity securities of the Company (including
any stockholder rights plan or agreement) (collectively, “Company Securities”),
or any obligations of the Company or any Company Subsidiary to make any payments
based on the price or value of any Company Securities. Except for the
Stockholders’ Agreement and the Registration Rights Agreement, none of the
Company or any Company Subsidiary is a party to any stockholders’ agreement,
voting trust agreement or other similar agreement or understanding relating to
any Company Securities or any other agreement relating to the disposition,
voting or dividends with respect to any Company Securities.

(c) Authorization.

(1) The Company has the corporate power and authority to enter into this
Agreement and the other Transaction Documents and to carry out its obligations
hereunder and thereunder. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Company and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by the board of directors of

 

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the Company (the “Board of Directors”). This Agreement has been, and (as of the
Closing) the other Transaction Documents will be, duly and validly executed and
delivered by the Company and, assuming due authorization, execution and delivery
by the Purchaser, this Agreement is, and (as of the Closing) each of the other
Transaction Documents will be, a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms (except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar Laws of general applicability
relating to or affecting creditors’ rights or by general equity principles). No
other corporate proceedings are necessary for the execution and delivery by the
Company of this Agreement or the other Transaction Documents, the performance by
it of its obligations hereunder or thereunder or the consummation by it of the
transactions contemplated hereby or thereby.

(2) Neither the execution and delivery by the Company of this Agreement or the
other Transaction Documents, nor the consummation of the transactions
contemplated hereby or thereby, nor compliance by the Company with any of the
provisions hereof or thereof (including the conversion provisions of the Series
A Certificate), will (i) require notice, consent or approval pursuant to,
violate, conflict with, or result in a breach of any provision of, or constitute
a default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of any Lien upon any of the properties or assets of
the Company or any Company Subsidiary under any of the terms, conditions or
provisions of (A) the certificate of incorporation of the Company (as amended or
modified from time to time prior to the date hereof, the “Certificate of
Incorporation”) or bylaws of the Company (as amended or modified from time to
time prior to the date hereof, the “Bylaws”) or the certificate of
incorporation, charter, bylaws or other governing instrument of any Company
Subsidiary, (B) subject to the terms and conditions of the following clause (C),
any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or any Company Subsidiary is
a party or by which it may be bound, or to which the Company or any Company
Subsidiary or any of the properties or assets of the Company or any Company
Subsidiary may be subject, or (C) the Credit Agreement or the Indentures or, as
of the Closing Date, any agreement entered into in connection with the Debt
Financing (or any Alternate Financing), or (ii) violate any Law applicable to
the Company or any Company Subsidiary or any of their respective properties or
assets, except (1) in the case of clauses (i)(B) and (ii) for such violations,
conflicts and breaches as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, and (2) in the
case of clause (i)(C) for such violations, conflicts and breaches as would not,
individually or in the aggregate, reasonably be expected to have more than a de
minimis adverse impact on the Company and the Company Subsidiaries, taken as
whole, or as would not, individually or in the aggregate, reasonably be expected
to have more than a de minimis adverse impact on the rights and obligations of
the Purchaser set forth in the Transaction Documents.

 

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(3) Other than (i) the securities or blue sky Laws of the various states,
(ii) approval or expiration of applicable waiting periods under the HSR Act,
(iii) the filing of a Form D and one or more Forms 8-K, and (iv) the listing on
the NYSE of the shares of Common Stock issuable upon the conversion of the
Series A Preferred Stock, no notice to, registration, declaration or filing
with, exemption or review by, or authorization, order, consent or approval of
any Governmental Entity or stock exchange, nor expiration or termination of any
statutory waiting period, is necessary for the consummation by the Company of
the transactions contemplated by this Agreement or the other Transaction
Documents.

(d) Sale of Securities. Assuming the accuracy of the Purchaser’s representations
in Section 2.2, the offer and sale of the Purchased Shares is exempt from the
registration and prospectus delivery requirements of the Securities Act and the
rules and regulations thereunder. Without limiting the foregoing, neither the
Company nor, to the Knowledge of the Company, any other person authorized by the
Company to act on its behalf, has engaged in a general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act) of
investors with respect to offers or sales of the Purchased Shares and neither
the Company nor, to the Knowledge of the Company, any person acting on its
behalf, has made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause the offering or issuance
of the Purchased Shares under this Agreement to be integrated with prior
offerings by the Company for purposes of the Securities Act that would result in
Regulation D under the Securities Act or any other applicable exemption from
registration under the Securities Act not being available, nor will the Company
take any action or steps that would cause the offering or issuance of the
Purchased Shares under this Agreement to be integrated with other offerings.

(e) Status of Securities. The shares of Series A Preferred Stock to be issued
pursuant to this Agreement and the shares of Common Stock to be issued upon
conversion of the Series A Preferred Stock have been duly authorized by all
necessary corporate action of the Company. When issued and sold against receipt
of the consideration therefor as provided in this Agreement or the Series A
Certificate, as applicable, the shares of Series A Preferred Stock will be
validly issued, fully paid and nonassessable, will not be subject to preemptive
rights of any other stockholder of the Company, free and clear of all Liens,
except restrictions imposed by the Securities Act, any applicable state, foreign
or other securities Laws, the Stockholders’ Agreement and Liens incurred by the
Purchaser. Upon any conversion of any shares of Series A Preferred Stock into,
or the redemption of any shares of Series A Preferred Stock in exchange for,
shares of Common Stock pursuant to and in accordance with the terms and
conditions of the Series A Certificate, the shares of Common Stock issued upon
such conversion or redemption will be validly issued, fully paid and
nonassessable, and will not be subject to preemptive rights of any other
stockholder of the Company, and will effectively vest in the Purchaser good
title to all such securities, free and clear of all Liens, except restrictions
imposed by the Securities Act, any applicable state, foreign or other securities
Laws, the Stockholders’ Agreement and Liens incurred by the Purchaser. The
respective rights, preferences, privileges, and restrictions of the Series A
Preferred Stock and the Common Stock are as stated in Certificate of
Incorporation or, in respect of the Series A Preferred Stock, in the Series A
Certificate. As of the Closing, the shares of Common Stock to be issued upon any
conversion or redemption of the Purchased Shares shall have been duly reserved
for such issuance.

 

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(f) SEC Documents; Financial Statements.

(1) The Company has filed with or furnished to the SEC, on a timely basis, all
required reports, proxy statements, schedules, forms, and other documents
required to be filed or furnished by the Company with the SEC pursuant to the
Securities Act or the Exchange Act since July 1, 2016 (the foregoing, together
with all exhibits thereto,

collectively, the “SEC Documents”). Each of the SEC Documents, as of its
respective filing date, complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as the case may be, and the rules
and regulations of the SEC thereunder applicable to such SEC Documents, and,
except to the extent that information contained in any SEC Document has been
revised, amended or superseded by a later filed SEC Document filed and publicly
available prior to any date as to which this representation speaks, none of the
SEC Documents as of such respective dates of filing or furnishing (or, if
revised, amended or superseded by a later filed SEC Document, as of the date of
the filing or furnishing of such revision or amendment) 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 light of
the circumstances under which they were made, not misleading.

(2) The Company (i) has implemented and maintains disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are
reasonably designed to ensure that material information relating to the Company,
including its consolidated Company Subsidiaries, is made known to the
individuals responsible for the preparation of the Company’s filings with the
SEC, and (ii) has disclosed, based on its most recent evaluation prior to the
date of this Agreement, to the Company’s outside auditors and the audit
committee of the Board of Directors (A) any significant deficiency or material
weakness in the design or operation of internal controls over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act) that is
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report financial information, and (B) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.

(3) There is no transaction, arrangement or other relationship between the
Company or any Company Subsidiary and an unconsolidated or other off-balance
sheet entity that is required to be disclosed by the Company in its SEC
Documents and is not so disclosed.

(4) The financial statements of the Company and its consolidated Company
Subsidiaries included in the SEC Documents (i) complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, in each case as of the
date such SEC Document was filed (or, if any such SEC Document was revised,
amended or superseded by a later filed SEC Document, as of the date of the
filing or furnishing of such revision or amendment), and (ii) have been prepared
in accordance with generally accepted accounting principles in the United States
(“GAAP”) applied on a consistent basis during the periods involved (except as
may be indicated in such financial statements or the notes thereto) and fairly
present in

 

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all material respects the consolidated financial position of the Company and its
consolidated Company Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows of the Company and its consolidated
Company Subsidiaries for the periods then ended (subject, in the case of
unaudited quarterly statements, to the absence of footnote disclosures and
normal year-end audit adjustments).

(g) Undisclosed Liabilities. Except for (i) those liabilities that are reflected
or reserved for in the consolidated financial statements of the Company included
in its Annual Report on Form 10-K for the fiscal year ended June 30, 2018, (ii)
liabilities incurred since June 30, 2018 in the ordinary course of business
consistent with past practice, (iii) liabilities incurred pursuant to the
transactions contemplated by this Agreement or the Merger Agreement (including
the Debt Commitment Letter), the Registration Rights Agreement or the
Stockholders’ Agreement, and (iv) liabilities that would not, individually or in
the aggregate, reasonably be expected to have a Company Material Adverse Effect,
the Company and its Company Subsidiaries do not have any liability or obligation
of any nature whatsoever (whether accrued, absolute, contingent or otherwise).

(h) Brokers and Finders. Except for Centerview Partners LLC, the fees and
expenses of which will be paid by the Company, neither the Company nor any
Company Subsidiaries or any of their respective officers, directors, employees
or agents has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder’s fees, and no
broker or finder has acted directly or indirectly for the Company in connection
with this Agreement or the transactions contemplated hereby.

(i) Litigation. There is no action, suit, or proceeding pending or, to the
Knowledge of the Company, investigation, action, suit or proceeding threatened
(including “cease and desist” letters or invitations to take patent license)
against, nor any outstanding Order against, the Company or any Company
Subsidiary or any of their respective assets before or by any Governmental
Entity, which individually or in the aggregate have, or if adversely determined,
would reasonably be expected to have, a Company Material Adverse Effect.

(j) Taxes. Except as would not, individually or in the aggregate, reasonably be
excepted to have a Company Material Adverse Effect:

(1) each of the Company and the Company Subsidiaries has filed all Tax Returns
required to have been filed, such Tax Returns were accurate in all respects, and
all Taxes due and payable (taking into account any extensions properly obtained)
by the Company and the Company Subsidiaries (whether or not shown on any Tax
Return) have been timely paid, except for those which are being contested in
good faith and by appropriate proceedings and in respect of which adequate
reserves with respect thereto are maintained in accordance with GAAP;

(2) no examination or audit of any Tax Return relating to any Taxes of the
Company or any Company Subsidiary or with respect to any Taxes due from or with
respect to the Company or any Company Subsidiary by any taxing authority is
currently in progress or threatened in writing;

 

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(3) neither the Company nor any Company Subsidiary has engaged in, or has any
liability or obligation with respect to, any “listed transaction” within the
meaning of Treasury Regulations Section 1.6011-4; and

(4) the Company is not and has not been during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code, a “United States real property holding
Corporation” within the meaning of Section 897(c)(2) of the Code.

(k) Permits and Licenses. The Company and the Company Subsidiaries possess all
Company Permits necessary to conduct their respective businesses, except where
the failure to possess such Company Permits would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Neither the Company nor any Company Subsidiary is in violation of any term of
any such Company Permit, except for violations which would not, individually or
in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. Except as would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (i) neither the Company nor
any Company Subsidiary has received written notice that any Governmental Entity
has taken, is taking or intends to take action to limit, suspend, materially
modify or revoke any Company Permit and, to the Knowledge of the Company, no
such Governmental Entity is considering any such action, and (ii) to the
Knowledge of the Company, no event has occurred that allows, or after notice or
lapse of time would allow, revocation or termination thereof or result in any
other material impairment of the rights of the holder of any Company Permit.

(l) Environmental Matters. The Company and the Company Subsidiaries are in
compliance with all, and since July 1, 2016 have not violated any, applicable
Environmental Laws except where failure to be in such compliance or such
violation would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect. The Company and the Company Subsidiaries
hold and since July 1, 2016 have held, and are and since July 1, 2016 have been
in compliance with, all Company Permits required under Environmental Laws to
conduct their businesses, except as would not reasonably be expected to have a
Company Material Adverse Effect. To the Knowledge of the Company, neither the
Company nor any Company Subsidiary has released Materials of Environmental
Concern at and, to the Knowledge of the Company, Materials of Environmental
Concern are not present at, under, in or affecting, any property currently or
formerly owned, leased or used by the Company or any Company Subsidiary, or at
any location to which Materials of Environmental Concern have been sent by the
Company or any Company Subsidiary for re-use or recycling or for treatment,
storage or disposal, except, in each case, as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
There is no claim or proceeding under Environmental Laws pending against the
Company or any Company Subsidiary, except as would not reasonably be expected to
have a Company Material Adverse Effect.

(m) Title. Each of the Company and the Company Subsidiaries has (i) good and
marketable title to its property that is owned real property, (ii) to the
Knowledge of the Company, valid leases to its property that is leased real
property, and (iii) good and valid title to all of its other property, except as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.

 

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(n) Intellectual Property. Except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect,
(i) the Company or a Company Subsidiary owns all (A) Intellectual Property
registrations and applications filed in their respective names, the
registrations of which are subsisting and unexpired, and to the Knowledge of the
Company, valid and enforceable, and (B) other Intellectual Property used in the
conduct of the businesses of the Company or the Company Subsidiaries that is not
used pursuant to a license or in the public domain; provided, however, the
foregoing representation in Section 2.1(n)(i)(B) is subject to the Knowledge of
the Company with respect to patents owned by third parties under which a license
may be needed to practice any such Intellectual Property; (ii) to the Knowledge
of the Company, the conduct of the businesses of Company and the Company
Subsidiaries does not infringe the Intellectual Property of any third party, and
no person is infringing any Intellectual Property owned by the Company or the
Company Subsidiaries; (iii) the Company and the Company Subsidiaries take
reasonable actions to protect the trade secrets and confidential information
owned by the Company or the Company Subsidiaries and the security and operation
of their software, websites and systems (and the data therein), and, to the
Knowledge of the Company, there has been no instance of unauthorized use or
disclosure, security breach, malfunction or outage of the same; and (iv) since
July 1, 2016, there has been no judicial or administrative order, decree or
judgment to which the Company or any of the Company Subsidiaries is a party or
by which they are bound that restricts any right to any proprietary Intellectual
Property used in the conduct of the businesses of the Company or the Company
Subsidiaries.

(o) Employee Benefits/Labor.

(1) Except as would not reasonably be expected, individually or in the
aggregate, to result in a Company Material Adverse Effect, (i) each Plan
complies with, and has been operated and administered in compliance with, its
terms and all applicable Laws (including ERISA and the Code), (ii) the Company
and each Company Subsidiary have each filed all reports, returns, notices, and
other documentation required by ERISA, the Code or other applicable Law to be
filed by such Person with any Governmental Entity with respect to each Plan,
(iii) with respect to any Plan, no action, Lien, lawsuit, claim or complaint
(other than routine claims for benefits, appeals of such claims and domestic
relations order proceedings) is pending or, to the Knowledge of the Company,
threatened, and (iv) to the Knowledge of the Company, no event has occurred with
respect to a Plan which would reasonably be expected to result in a liability of
the Company or any Company Subsidiary to any Governmental Entity or adversely
affect the qualified status for any such Plan. None of the Company, any Company
Subsidiary, or any other entity which, together with the Company or the Company
Subsidiaries, would be treated as a single employer under Section 4001 of ERISA
or Section 414 of the Code, has at any time during the last six (6) years
maintained, sponsored or contributed to any employee benefit plan that is
subject to Title IV of ERISA, including any “multiemployer plan” (as defined in
Section 4001(a)(3) of ERISA).

 

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(2) Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, as of the date of this Agreement: (i) neither the
Company nor any Company Subsidiary is a party to any collective bargaining
agreement or other contract or agreement with any labor organization or other
representative of any of the employees of the Company or any Company Subsidiary,
nor is any such contract or agreement presently being negotiated; (ii) to the
Knowledge of the Company, no campaign is being conducted to solicit cards from
any of the employees of the Company or any Company Subsidiary to authorize
representation by any labor organization, and no such campaign has been
conducted within the past three years; (iii) no labor strike, slowdown, work
stoppage, dispute, lockout or other labor controversy is in effect or, to the
Knowledge of the Company, threatened in writing, and neither the Company nor any
Company Subsidiary has experienced any such labor controversy since July 1,
2016; (iv) no unfair labor practice charge or complaint is pending or, to the
Knowledge of the Company, threatened in writing with respect to any employment
practice of the Company or any Company Subsidiary; (v) no action, complaint,
charge, inquiry, proceeding or investigation by or on behalf of any current or
former employee, labor organization or other representative of the employees of
the Company or any Company Subsidiary (including persons employed jointly by
such entities with any other staffing or other similar entity) is pending or, to
the Knowledge of the Company, threatened in writing; (vi) the Company and each
Company Subsidiary are in compliance with all applicable Laws, agreements,
contracts, policies, plans and programs relating to employment, employment
practices, compensation, benefits, hours, terms and conditions of employment,
health and safety, employment discrimination, disability rights or benefits,
affirmative action, workers’ compensation, unemployment insurance, employment
and reemployment rights of members of the uniformed services, secondment,
employee leave issues, payment of social security and other similar Taxes,
termination of employment (including any obligation pursuant to the Worker
Adjustment and Retraining Notification Act of 1988, as amended), the
classification of employees as exempt or non-exempt from overtime pay
requirements, the provision of meal and rest breaks and pay for all working
time, and the proper classification of individuals as non-employee contractors
or consultants; and (vii) the Company and each Company Subsidiary are in
compliance with all applicable Laws relating to child labor, forced labor and
involuntary servitude.

(p) Indebtedness. Neither the Company nor any Company Subsidiary is, immediately
prior to the execution and delivery of this Agreement, in default in the payment
of any material indebtedness or in default under any agreement relating to its
material indebtedness.

(q) Registration Rights. Except as provided in the Registration Rights
Agreement, the Company has not granted or agreed to grant, and is not under any
obligation to provide, any right to register under the Securities Act any of its
presently outstanding securities or any of its securities that may be issued
subsequently.

(r) Compliance with Laws. Neither the Company nor any Company Subsidiary is, or
since July 1, 2016 has been, in violation of any applicable Law, except where
such violation would not, individually or in the aggregate, reasonably be
expected to have, or has not had, a Company Material Adverse Effect. To the
Knowledge of the Company as of the date of this Agreement, neither the Company
nor any Company Subsidiary is being investigated with respect to any applicable
Law, or has received written notice from any Governmental Entity inquiring about
or asserting any violation of any applicable Law, or is or has been subject to
any adverse inspection,

 

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examination, finding of deficiency, finding of noncompliance, penalty, fine,
sanction, assessment, audit, request for corrective or remedial action, or other
supervisory, compliance or enforcement action by any Governmental Entity with
respect to any applicable Law, except for such of the foregoing as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Notwithstanding anything to the contrary set forth in
this Section 2.1(r), the Company makes no representation or warranty in this
Section 2.1(r) with respect to compliance by the Company or any Company
Subsidiary with respect to any Health Care Laws or the terms of any Company
Permit required by any Health Care Law, it being acknowledged and agreed by the
parties that the representations and warranties of the Company set forth in
Section 2.1(t) constitute the sole and exclusive representations and warranties
of the Company with respect to Health Care Laws and the terms of any Company
Permit required by any Health Care Law.

(s) Absence of Changes. Since June 30, 2018, there has not been (1) a Company
Material Adverse Effect, or (2) any action or omission of the Company or any
Company Subsidiary that, if such action or omission occurred between the date of
this Agreement and the Closing Date, would violate Section 3.8.

(t) Regulatory Matters.

(1) The Company and the Company Subsidiaries are currently, and since July 1,
2016 have been, operating in compliance with all Health Care Laws to the extent
applicable to the business of the Company, except where the failure to so comply
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect. “Health Care Laws” means (i) the Federal Food,
Drug and Cosmetic Act (21 U.S.C. § 301 et seq.), as amended; (ii) the Controlled
Substances Act (21 U.S.C. § 301 et seq.), as amended; (iii) the Public Health
Service Act (42 U.S.C. § 201 et seq.), as amended; (iv) all foreign, federal and
state fraud and abuse Laws, including, but not limited to, the federal
Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), as amended, the civil False
Claims Act (31 U.S.C. § 3729 et seq.), as amended, the criminal False Claims Law
(42 U.S.C. § 1320a-7b(a)), as amended, (v) the quality, safety and accreditation
requirements of all applicable federal and state Laws or Governmental Entities;
(vi) any and all foreign Laws comparable or similar to any of the foregoing; and
(vii) the regulations promulgated by any Governmental Entity charged with
implementing any of such Laws.

(2) Neither the Company nor any Company Subsidiary since July 1, 2016 has
received any Form 483, notice of adverse finding, warning letter, untitled
letter or other correspondence or notice from the U.S. Food and Drug
Administration (the “FDA”), the U.S. Drug Enforcement Administration (the “DEA”)
or any court, arbitrator or other federal, state, local or foreign Governmental
Entity alleging or asserting noncompliance with either any of the Health Care
Laws or any term of any Company Permit required by any of the Health Care Laws,
nor has the Company or any Company Subsidiary received notice of any claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or
other action from any Governmental Entity or third party alleging that any
product, operation or activity by the Company or any Company Subsidiary is in
violation of any Health Care Laws or Company Permit, and the Company has no
knowledge that any such Governmental Entity or third party is considering any
such claim, litigation, arbitration, action, suit, investigation or proceeding,
except in each case as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect.

 

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(3) Since July 1, 2016, except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, (a) the
Company and each Company Subsidiary has filed, obtained, maintained or submitted
all material reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments thereto (collectively, “Submissions”)
as required by any Health Care Laws or Company Permit, (b) all such Submissions
were complete and correct in all material respects and not misleading on the
date filed (or were corrected or supplemented by a subsequent submission), and
(c) the Company is not aware of any reasonable basis for any material liability
with respect to such Submissions. Neither the Company nor any Company Subsidiary
has received any letter of deficiency with respect to any drug master file
submitted to the FDA, except as would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.

(4) The products manufactured by the Company and the Company Subsidiaries
comply, and since July 1, 2016 have complied, with all applicable Health Care
Laws relating to current good manufacturing practices, good laboratory practices
and good documentation practices, except where such non-compliance would not,
individually or in the aggregate, reasonably be expected to have, or has not
had, a Company Material Adverse Effect.

(5) Neither the Company nor any Company Subsidiary has, either voluntarily or
involuntarily, initiated, conducted, issued or caused to be initiated, conducted
or issued any recall, market withdrawal or replacement, safety alert, post-sale
warning, “dear doctor” letter, or other notice or action relating to the alleged
lack of safety or efficacy of any product or any alleged product defect or
violation, and, to the Company’s knowledge, no customer of the Company or any
Company Subsidiary has initiated, conducted or intends to initiate any such
recall, market withdrawal or replacement, safety alert, post-sale warning, “dear
doctor” letter, or other notice or action with respect to products manufactured
by the Company or any Company Subsidiary due to any act, omission or alleged act
or omission of the Company or any Company Subsidiary, except in each case as
would not, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.

(6) Neither the Company nor any Company Subsidiary is a party to or has any
ongoing reporting obligation pursuant to any corporate integrity agreement,
deferred prosecution agreement, monitoring agreement, consent decree, settlement
order, plan of correction or similar agreement with or imposed by any
Governmental Entity relating to Health Care Laws, except as would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. Additionally, none of the Company, any Company
Subsidiary or any of their respective officers, directors, employees or, to the
Knowledge of the Company, agents, has been excluded, suspended or debarred from
participation in any U.S. 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, or exclusion.

 

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(u) Illegal Payments; FCPA Violations. Except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Impact, since
January 1, 2016, none of the Company, any Company Subsidiary or, to the
Knowledge of the Company, any officer, director, employee, agent, representative
or consultant acting on behalf of the Company or any Company Subsidiary (and
only in their capacities as such) has, in connection with the business of the
Company: (i) unlawfully offered, paid, promised to pay, or authorized the
payment of, directly or indirectly, anything of value, including money, loans,
gifts, travel, or entertainment, to any Government Official with the purpose of
(A) influencing any act or decision of such Government Official in his official
capacity; (B) inducing such Government Official to perform or omit to perform
any activity in violation of his legal duties; (C) securing any improper
advantage; or (D) inducing such Government Official to influence or affect any
act or decision of such Government Entity, except, with respect to the foregoing
clauses (A) - (D), as permitted under the U.S. Foreign Corrupt Practices Act or
other applicable Law; (ii) made any illegal contribution to any political party
or candidate; (iii) made, offered or promised to pay any unlawful bribe, payoff,
influence payment, kickback, unlawful rebate, or other similar unlawful payment
of any nature, directly or indirectly, in connection with the business of the
Company, to any person, including any supplier or customer; (iv) knowingly
established or maintained any unrecorded fund or asset or made any false entry
on any book or record of the Company or any Company Subsidiary for any purpose;
or (v) otherwise violated the U.S. Foreign Corrupt Practices Act of 1977, as
amended, the UK Bribery Act 2010, as amended, or any other applicable
anti-corruption or anti-bribery Law.

(1) For purposes of this Section, “Government Official” means any officer or
employee of a Government Entity or any department, agency, or instrumentality
thereof, or of a public international organization, or any person acting in an
official capacity for or on behalf of any such Government Entity or department,
agency, or instrumentality, or for or on behalf of any such public international
organization, or any political party, party official, or candidate thereof,
excluding officials of the governments of the United States, the several states
thereof, any local subdivision of any of them or any agency, department or unit
of any of the foregoing; and

(2) “Government Entity” means any foreign government, any political subdivision
thereof, or any corporation or other entity owned or controlled by any
Government or any sovereign wealth fund, excluding the governments of the United
States, the several states thereof, any local subdivision of any of them or any
agency, department or unit of any of the foregoing.

(v) Economic Sanctions. Except as would not, individually or in the aggregate,
have a Company Material Adverse Effect, the Company is not in contravention of
any sanction, and has not engaged in any conduct sanctionable, under U.S.
economic sanctions Laws, including Laws administered and enforced by the U.S.
Department of the Treasury’s Office of Foreign Assets Control, 31 C.F.R. Part V,
the Iran Sanctions Act, as amended, the Comprehensive Iran Sanctions,
Accountability and Divestment Act, as amended, the Iran Threat Reduction and
Syria Human Rights Act, as amended, the Iran Freedom and Counter-Proliferation
Act of 2012, as amended, and any executive order issued pursuant to any of the
foregoing.

 

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(w) Listing and Maintenance Requirements. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act, and the Company has taken no
action intended to, or which, to the Knowledge of the Company, is reasonably
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act, nor has the Company received as of the date of this
Agreement any written notification that the SEC is contemplating terminating
such registration.

(x) No Restriction on Ability to Pay Cash Dividends. Except as set forth in the
Credit Agreement and the Indentures, each as in effect as of the date hereof,
the Company is not party to any contract, agreement, arrangement or other
understanding, oral or written, express or implied, and is not subject to any
provision in its Certificate of Incorporation or Bylaws or resolutions of the
Board of Directors that, in each case, by its terms, restricts, limits,
prohibits or prevents the Company from paying any dividend, including in full in
cash on the Purchased Shares in the amounts contemplated by the Series A
Certificate.

(y) No Additional Representations. Except as expressly set forth in this
Section 2.1, none of the Company or its Company Subsidiaries, nor any other
Person, makes any representation or warranty, express or implied, at law or in
equity, by statute or otherwise, and any other representations or warranties are
hereby expressly disclaimed, including, without limitation, any implied
representation or warranty as to condition, merchantability, suitability or
fitness for a particular purpose. Notwithstanding anything to the contrary,
(a) none of the Company or its Company Subsidiaries, nor any other Person, shall
be deemed to make to Purchaser or any of its Affiliates any representation or
warranty other than as expressly made by the Company in this Agreement and
except as expressly covered by a representation and warranty contained in this
Section 2.1, and (b) none of the Company or its Company Subsidiaries, nor any
other Person, makes any representation or warranty to the Purchaser or any of
its Affiliates with respect to (i) any projections, estimates or budgets
heretofore delivered to or made available to Purchaser or its Affiliates or
their respective counsel, accountants or advisors of future revenues, expenses
or expenditures or future results of operations of either (x) the Company and
its Company Subsidiaries, or (y) Target or its Subsidiaries, (ii) any other
information or documents (financial or otherwise) made available to the
Purchaser or its Affiliates or their respective counsel, accountants or advisors
with respect to either (x) the Company and its Company Subsidiaries, or
(y) Target or its Subsidiaries. Notwithstanding anything to the contrary herein,
nothing in this Agreement shall limit the right of the Purchaser and its
Affiliates to rely on the representations, warranties, covenants and agreements
expressly set forth in this Agreement or in any certificate delivered pursuant
hereto, nor will anything in this Agreement operate to limit any claim by the
Purchaser or any of its Affiliates for actual and intentional fraud.

2.2 Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company, as of the date hereof and as of the
Closing Date (except to the extent made only as of a specified date in which
case as of such date), that:

 

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(a) Organization and Authority. The Purchaser is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified, except where failure to be so qualified
would not reasonably be expected to materially and adversely affect the
Purchaser’s ability to perform its obligations under this Agreement or
consummate the transactions contemplated hereby on a timely basis, and the
Purchaser has the corporate or other power and authority and governmental
authorizations to own its properties and assets and to carry on its business as
it is now being conducted.

(b) Authorization.

(1) The Purchaser has the limited partnership power and authority to enter into
this Agreement and the other Transaction Documents and to carry out its
obligations hereunder and thereunder. The execution, delivery and performance of
this Agreement and the other Transaction Documents by the Purchaser and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of the Purchaser, and no further
approval or authorization by any of its stockholders, partners, members or other
equity owners, as the case may be, is required. This Agreement has been and (as
of the Closing) the other Transaction Documents will be, duly and validly
executed and delivered by the Purchaser and, assuming due authorization,
execution and delivery by the Company, is, and (as of the Closing) each of the
other Transaction Documents will be, a valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its terms (except
as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors’ rights or by general equity
principles).

(2) Neither the execution, delivery and performance by the Purchaser of this
Agreement or the other Transaction Documents, nor the consummation of the
transactions contemplated hereby or thereby, nor compliance by the Purchaser
with any of the provisions hereof or thereof, will (i) require notice, consent
or approval pursuant to, violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of
termination or acceleration of, or result in the creation of any Lien upon any
of the properties or assets of the Purchaser under any of the terms, conditions
or provisions of (A) its organizational documents or (B) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Purchaser is a party or by which it may be
bound, or to which the Purchaser or any of the properties or assets of the
Purchaser may be subject, or (ii) subject to compliance with the statutes and
regulations referred to in the next paragraph, violate any Laws applicable to
the Purchaser or any of their respective properties or assets, except, in the
case of clauses (i)(B) and (ii), for such violations, conflicts and breaches as
would not reasonably be expected to prevent or materially delay the consummation
of the transactions contemplated by this Agreement or have a material adverse
effect on the Purchaser’s ability to fully perform its respective covenants and
obligations under this Agreement.

 

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(3) Other than (i) the securities or blue sky Laws of the various states,
(ii) the approval or expiration of applicable waiting periods under the HSR Act,
and (iii) the filing of a Schedule 13D with the SEC, no notice to, registration,
declaration or filing with, exemption or review by, or authorization, order,
consent or approval of, any Governmental Entity, nor expiration or termination
of any statutory waiting period, is necessary for the consummation by the
Purchaser of the transactions contemplated by this Agreement or the other
Transaction Documents.

(c) Purchase for Investment. The Purchaser acknowledges that the Purchased
Shares and the shares of Common Stock issuable upon the conversion of the
Purchased Shares have not been registered under the Securities Act or under any
state securities Laws. The Purchaser (1) acknowledges that it is acquiring the
Purchased Shares and the shares of Common Stock issuable upon the conversion of
the Purchased Shares pursuant to an exemption from registration under the
Securities Act solely for investment with no present intention to distribute any
of the Purchased Shares or the shares of Common Stock issuable upon the
conversion of the Purchased Shares to any person in violation of applicable
securities Laws, (2) will not sell, transfer, or otherwise dispose of any of the
Purchased Shares or shares of Common Stock issuable upon the conversion of the
Purchased Shares, except in compliance with this Agreement, the registration
requirements or exemption provisions of the Securities Act, any other applicable
securities Laws and the Stockholders’ Agreement, (3) has such knowledge and
experience in financial and business matters and in investments of this type
that it is capable of evaluating the merits and risks of its investment in the
Purchased Shares and the shares of Common Stock issuable upon the conversion of
the Purchased Shares and of making an informed investment decision, (4) is an
“accredited investor” (as that term is defined by Rule 501 under the Securities
Act), and (5) without prejudice to any claim of Purchaser hereunder for breach
of the Company’s representations and warranties or for actual and intentional
fraud, (i) has been furnished with or has had full access to all the information
that it considers necessary or appropriate to make an informed investment
decision with respect to the Purchased Shares and the shares of Common Stock
issuable upon the conversion of the Purchased Shares, (ii) has had an
opportunity to discuss with management of the Company the intended business and
financial affairs of the Company and to obtain information (to the extent the
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to it or to
which it had access and (iii) can bear the economic risk of (A) an investment in
the Purchased Shares and the shares of Common Stock issuable upon the conversion
of the Purchased Shares indefinitely and (B) a total loss in respect of such
investment. The Purchaser has such knowledge and experience in business and
financial matters so as to enable it to understand and evaluate the risks of and
form an investment decision with respect to, its investment in the Purchased
Shares and the shares of Common Stock issuable upon the conversion of the
Purchased Shares and to protect its own interest in connection with such
investment.

 

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(d) Litigation. There is no action, suit or proceeding pending or, to the
Knowledge of the Purchaser, investigation, action, suit or proceeding threatened
(including “cease and desist” letters) against, nor any outstanding Order
against, the Purchaser or any of its Affiliates or any of their respective
assets before or by any Governmental Entity, that would, individually or in the
aggregate, reasonably be expected to materially and adversely affect the
Purchaser’s ability to perform its obligations under this Agreement or
consummate the transactions contemplated hereby on a timely basis.

(e) Compliance with Laws. Neither the Purchaser nor any of its Affiliates is in
material violation of any applicable Law that would, individually or in the
aggregate, reasonably be expected to materially and adversely affect the
Purchaser’s ability to perform its obligations under this Agreement or
consummate the transactions contemplated hereby on a timely basis. To the
Knowledge of the Purchaser as of the date of this Agreement, neither the
Purchaser nor any of its Affiliates is being investigated with respect to any
applicable Law, or has received written notice from any Governmental Entity
inquiring about or asserting any violation of any applicable Law, or is subject
to any adverse inspection, examination, finding of deficiency, finding of
noncompliance, penalty, fine, sanction, assessment, audit, request for
corrective or remedial action, or other supervisory, compliance or enforcement
action by any Governmental Entity that would, individually or in the aggregate,
reasonably be expected to materially and adversely affect the Purchaser’s
ability to perform its obligations under this Agreement or consummate the
transactions contemplated hereby on a timely basis.

(f) Financial Capability. The Purchaser at the Closing will have available funds
necessary to consummate the Closing on the terms and conditions contemplated by
this Agreement and to make any other necessary payment contemplated hereunder
and under the other Transaction Documents. The Purchaser is not aware of any
reason why the funds sufficient to fulfill its obligations under Article I
(including the Aggregate Purchase Price) and under the other Transaction
Documents will not be available on the Closing Date.

(g) Ownership of Company Securities. Neither the Purchaser nor any of its
Affiliates beneficially owns any share of Common Stock as of the date hereof.

(h) Access to Information. The Purchaser and its Affiliates have been given
access to all Company documents, records and other information, and have had
adequate opportunity to ask questions of, and to receive answers from, the
Company’s officers, employees, agents, accountants, and representatives
concerning the Company’s business, operations, financial condition, assets,
liabilities and all other matters the Purchaser has deemed relevant to its
investment in the Purchased Shares. The representations and warranties of the
Purchaser contained in this Section 2.2(h) shall not affect the ability of the
Purchaser to rely on the representations and warranties made by the Company
pursuant to Section 2.1 of this Agreement.

(i) Interested Stockholder. As of the date hereof, the Purchaser is not an
“interested stockholder” (as defined in Section 203(c)(5) of the General
Corporation Law of the State of Delaware) of the Company.

(j) Brokers and Finders. None of the Purchaser, any of its Affiliates or any of
their respective officers, directors, employees or agents has employed any
broker or finder for which the Company will incur any liability for any
financial advisory fees, brokerage fees, commissions or finder’s fees with
respect to the purchase of the Purchased Shares or any investment in the
Company.

 

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(k) Non-Reliance. Except as expressly set forth in Section 2.1, the Purchaser
acknowledges and agrees that none of the Company or its Company Subsidiaries,
nor any other Person, has made any representation or warranty, express or
implied, at law or in equity, by statute or otherwise, and any other
representations or warranties are hereby expressly disclaimed by the Company,
including, without limitation, any implied representation or warranty as to
condition, merchantability, suitability or fitness for a particular purpose.
Notwithstanding anything to the contrary, (a) none of the Company or its Company
Subsidiaries, nor any other Person, shall be deemed to make to Purchaser or any
of its Affiliates any representation or warranty other than as expressly made by
the Company in this Agreement and except as expressly covered by a
representation and warranty contained in Section 2.1, and (b) none of the
Company or its Company Subsidiaries, nor any other Person, has made any
representation or warranty to the Purchaser or any of its Affiliates with
respect to (i) any projections, estimates or budgets heretofore delivered to or
made available to Purchaser or its Affiliates or their respective counsel,
accountants or advisors of future revenues, expenses or expenditures or future
results of operations of either (x) the Company and its Company Subsidiaries, or
(y) Target or its Subsidiaries, (ii) any other information or documents
(financial or otherwise) made available to the Purchaser or its Affiliates or
their respective counsel, accountants or advisors with respect to either (x) the
Company and its Company Subsidiaries, or (y) Target or its Subsidiaries.
Notwithstanding anything to the contrary herein, nothing in this Agreement shall
limit the right of the Purchaser and its Affiliates to rely on the
representations, warranties, covenants and agreements expressly set forth in
this Agreement or in any certificate delivered pursuant hereto, nor will
anything in this Agreement operate to limit any claim by the Purchaser or any of
its Affiliates for actual and intentional fraud.

ARTICLE III

COVENANTS

3.1 Filings; Other Actions. During the period commencing on the date hereof and
terminating on the earlier to occur of (a) the Closing, and (b) the termination
of this Agreement in accordance with Section 6.15 (the “Pre-Closing Period”),
each of the Purchaser, on the one hand, and the Company, on the other hand, will
cooperate and consult with the other and use reasonable best efforts to prepare
and file all necessary documentation, to effect all necessary applications,
notices, petitions, filings and other documents, and to obtain all necessary
permits, consents, orders, approvals and authorizations of, or any exemption by,
all third parties and Governmental Entities, and the expiration or termination
of any applicable waiting period, necessary or advisable to consummate the
transactions contemplated by this Agreement, and to perform the covenants
contemplated by this Agreement. Each party shall execute and deliver both before
and after the Closing such further certificates, agreements and other documents
and take such other actions as the other party may reasonably request to
consummate or implement such transactions or to evidence such events or matters.
In addition, the Purchaser and the Company shall use all reasonable best efforts
to obtain or submit, as the case may be, as promptly as practicable following
the date hereof, the approvals and authorizations of, all filings and
registrations with, and all notifications to, or expiration or termination of
any applicable waiting period, under the Hart-Scott

 

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Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) with
respect to the transactions contemplated hereby, including the issuance of
Purchased Shares and shares of Common Stock to the Purchaser (upon conversion of
any Series A Preferred Stock). Without limiting the foregoing, the Purchaser and
the Company shall, as promptly as practicable following the date hereof (but in
no event later than ten (10) Business Days following the date hereof), each
prepare and file a Notification and Report Form pursuant to the HSR Act in
connection with the transactions contemplated by this Agreement. The Purchaser
and the Company will each have the right to review in advance, and, to the
extent practicable, each will consult with the other, in each case, subject to
applicable Laws relating to the exchange of information, concerning, all the
information relating to such other party, and any of their respective
Affiliates, that appears in any filing made with, or written materials submitted
to, any third party or any Governmental Entity in connection with the
transactions contemplated by this Agreement. In exercising the foregoing right,
each of the parties shall act reasonably and as promptly as practicable. Each
party shall keep the other party apprised of the status of the matters referred
to in this Section 3.1. The Purchaser shall promptly furnish the Company, and
the Company shall promptly furnish the Purchaser, to the extent permitted by
Law, with copies of written communications received by it or its Subsidiaries or
Affiliates from any Governmental Entity in respect of the transactions
contemplated by this Agreement. Each of the Purchaser and the Company may, as
each deems advisable and necessary, reasonably designate any competitively
sensitive material provided to the other under this Section 3.1 as “Outside
Counsel Only Material.” Such materials and information contained therein shall
be given only to the outside counsel of the recipient and, subject to any
additional confidentiality or joint defense agreement the parties may mutually
propose and enter into, will not be disclosed by such outside counsel to
employees, officers or directors of the recipient unless express permission is
obtained in advance from the source of such materials (the Purchaser or the
Company, as the case may be) or its legal counsel. Notwithstanding anything to
the contrary in this Section 3.1, materials provided to the other party or its
outside counsel may be redacted (i) to remove references concerning valuation,
(ii) as necessary to comply with contractual arrangements, and (iii) as
necessary to address reasonable attorney-client or other privilege or
confidentiality concerns. Neither the Purchaser nor the Company shall
participate in any substantive meeting with any Governmental Entity in respect
of the transactions contemplated by this Agreement unless it consults with the
other party in advance and, to the extent not prohibited by such Governmental
Entity, gives the other party the opportunity to attend and participate therein
or thereat.

3.2 Reasonable Best Efforts to Close. During the Pre-Closing Period, the Company
and the Purchaser will use their respective reasonable best efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary under applicable Laws so as to permit consummation of
the transactions contemplated hereby as promptly as practicable and otherwise to
enable consummation of the transactions contemplated hereby and shall cooperate
reasonably with the other party to that end, including in relation to the
satisfaction of the conditions to Closing set forth in Sections 1.3(a), (b) and
(c) and cooperating in seeking to obtain any consent required from Governmental
Entities. Notwithstanding any other provision of this Agreement to the contrary,
to the extent necessary or required by an applicable Governmental Entity in
order to permit the satisfaction of the conditions to Closing set forth in
Section 1.3(a), as promptly as practicable, the Purchaser shall offer, accept
and agree to, by consent decree or otherwise, impose limitations on the ability
of the Purchaser or its Affiliates effectively to acquire, hold or exercise

 

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full rights of ownership of, any shares of the Company. Notwithstanding the
foregoing or any other provision of this Agreement to the contrary, in no event
shall the Company or any Company Subsidiary be obligated to enter into any
settlement, undertaking, consent decree, stipulation or agreement with any
Governmental Entity in connection with the transactions contemplated by this
Agreement or the Merger Agreement.

3.3 Authorized Common Stock. At any time that any Purchased Shares are issued
and outstanding, the Company shall from time to time take all lawful action
within its control to cause the authorized capital stock of the Company to
include a sufficient number of authorized but unissued shares of Common Stock to
satisfy the conversion requirements of all shares of Series A Preferred Stock
then issued and outstanding pursuant to Article VII of the Series A Certificate.
All shares of Common Stock delivered upon conversion of the Series A Preferred
Stock shall be newly issued shares or shares held in treasury by the Company,
shall have been duly authorized and validly issued and shall be fully paid and
nonassessable, and free and clear of any Liens (other than Liens incurred by the
Purchaser or restrictions arising under applicable securities Laws or the
Stockholders’ Agreement).

3.4 Certain Adjustments. If, after the date hereof and prior to the Closing, the
Company effects any transaction that would have resulted in an adjustment to the
Conversion Rate pursuant to Article IX of the Series A Certificate if the Series
A Preferred Stock had been issued since the date hereof, the Company shall
adjust the Conversion Rate, effective as of the Closing, in the same manner as
would have been required by Article IX of the Series A Certificate if the Series
A Preferred Stock had been issued and outstanding since the date hereof.

3.5 Confidentiality. The Purchaser will hold, and will cause its respective
Affiliates and their respective directors, officers, employees, agents,
attorneys, accountants and financial advisors to hold, in strict confidence,
unless disclosure is requested or legally compelled (in either case pursuant to
the terms of a valid and effective subpoena or order issued by a court of
competent jurisdiction or a federal, state or local governmental or regulatory
body or pursuant to a civil investigative demand or similar judicial process,
and in such cases, the Purchaser shall provide the Company with prompt written
notice of the proposed disclosure so that the Company may seek a protective
order or other appropriate remedy (and in the event that such protective order
or other remedy is not obtained, or that the Company waives compliance with this
provision, the Purchaser will furnish only that portion of such information that
the Purchaser is advised by legal counsel is legally required and will exercise
its best efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded such information)), all non-public
records, books, contracts, instruments, computer data and other data and
information (collectively, “Information”) concerning the Company furnished to
the Purchaser by or on behalf of the Company or its representatives in
connection with the investigation of the matters contemplated by, or the
negotiations concerning, this Agreement, the Merger Agreement or the Debt
Commitment Letter or pursuant to this Agreement or the matters contemplated by
this Agreement (except to the extent that such information can be shown (a) to
have been previously known to the Purchaser on a non-confidential basis, prior
to its disclosure by the Company, from other sources that, after reasonable
inquiry, is entitled to disclose such information and is not bound by a
contractual, legal or fiduciary obligation to the Company of confidentiality
with respect to such information, (b) to have been or to be generally known to
the public through no violation of this

 

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Section 3.5 by the Purchaser, directly or through any of its respective
Affiliates and their respective directors, officers, employees, agents,
attorneys, accountants and financial advisors, (c) to have been in the
possession of the Purchaser on a non-confidential basis, prior to its disclosure
by the Company or (d) to be subsequently developed by the Purchaser without
using all or any portion of the Information or violating any of the obligations
of the Purchaser under this Agreement), and the Purchaser shall not release or
disclose such Information to any other person, except its auditors, attorneys,
accountants and financial advisors, to the extent that they bear customary
obligations of confidentiality to the Purchaser. In addition, nothing in this
Section 3.5 shall restrict the disclosure by Purchaser, its Affiliates or its
and their respective directors, officers, employees, agents, attorneys,
accountants and financial advisors to (x) Permitted Transferees in connection
with a proposed transfer of Series A Preferred Stock or Common Stock (it being
understood that (i) prior to any such disclosure, the prospective transferee
shall be informed of the confidential nature of the information, and (ii) the
Purchaser shall be responsible for any breach of this Section 3.5 by such
person), or (y) the Purchaser’s existing or prospective limited partners that
are bound by a customary written confidentiality obligation that contains
reasonable restrictions on the use and disclosure of the Company’s non-public
information; provided that for purposes of this clause (y), (i) such Information
is limited to financial information and other information regarding the Company
or the Company Subsidiaries that is contractually required or customarily
provided to existing or prospective investors in the Purchaser, and (ii) the
Purchaser shall be responsible for any breach of this Section 3.5 by such
person. The Confidentiality Agreement, dated as of January 2, 2019 (the
“Confidentiality Agreement”), by and between Catalent Pharma Solutions, LLC and
Leonard Green & Partners, L.P., shall remain in full force and effect.

3.6 NYSE Listing of Shares. To the extent it has not already done so, the
Company shall promptly apply for listing on the NYSE, subject to official notice
of issuance, any share of Common Stock issuable upon the conversion of the
Series A Preferred Stock.

3.7 State Securities Laws. During the Pre-Closing Period, the Company shall use
its reasonable best efforts to (a) obtain all necessary permits and
qualifications, if any, or secure an exemption therefrom, required by any state
or country prior to the offer and sale of shares of Common Stock upon the
conversion of the Series A Preferred Stock or the Series A Preferred Stock, and
(b) cause such authorization, approval, permit or qualification to be effective
as of the Closing and, as to such shares of Common Stock, as of any conversion
of the Series A Preferred Stock.

3.8 Negative Covenants. Except as set forth on Section 3.8 of the Company
Disclosure Schedules, from the date of this Agreement through the Closing, the
Company and the Company Subsidiaries shall use their reasonable best efforts to
operate their businesses in the ordinary course and, without the prior written
consent of the Purchaser (which consent shall not be unreasonably withheld,
conditioned or delayed), shall not:

(a) declare, or make payment in respect of, any dividend or other distribution
upon any shares of the Company; provided, however, that, notwithstanding
anything to the contrary set forth in this Section 3.8, this clause (a) shall
not be applicable to any Company Subsidiary;

 

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(b) redeem, repurchase or acquire any capital stock of the Company or any
Company Subsidiary, other than repurchases of capital stock (i) approved by the
Board of Directors and publicly announced prior to the date hereof, (ii) made in
an “open market” transaction at the then-prevailing price or through an
“accelerated share repurchase” on customary terms, (iii) from employees,
officers or directors of the Company or any Company Subsidiary in the ordinary
course of business pursuant to any of the Company’s agreements or plans then in
effect, or (iv) of one Company Subsidiary by one or more other Company
Subsidiaries or the Company;

(c) authorize or issue any share of capital stock, or reclassify any capital
stock, of the Company, or authorize or issue or change the terms of any security
exercisable for, exchangeable for or convertible into, capital stock of the
Company, other than (i) the authorization and issuance of the Series A Preferred
Stock, or (ii) issuances of shares, or securities exercisable for, exchangeable
for or convertible into shares of capital stock of the Company to employees,
officers and directors of the Company or any Company Subsidiary in the ordinary
course of business pursuant to any of the Company’s agreements or plans then in
effect; or

(d) amend or otherwise change, or waive any provision of, its certificate of
incorporation or bylaws (or similar organizational documents), including as a
result of a merger, amalgamation, consolidation or other similar or
extraordinary transaction, in a manner that would adversely affect the Purchaser
as a holder of the Series A Preferred Stock or with respect to the rights of the
Purchaser under this Agreement, the Registration Rights Agreement or the
Stockholders’ Agreement.

3.9 Merger Agreement and Debt Financing. At or prior to the Closing, the Company
shall not permit Buyer to, without the prior written consent of the Purchaser,
make any amendment, supplement, waiver or other modification to the Merger
Agreement that would be materially adverse to the Purchaser. Without limiting
the foregoing, the parties agree that it shall be materially adverse to
Purchaser to make any amendment, supplement, waiver or other modification to the
Merger Agreement to (a) increase the Purchase Price (as defined in the Merger
Agreement), or (b) materially modify the conditions to the Merger Closing set
forth in Articles 5 and 6 of the Merger Agreement. Prior or to the Closing, the
Company shall not permit Buyer to, without the prior written consent of the
Purchaser, (i) amend, supplement, waive or modify the Debt Commitment Letter,
the Credit Agreement or the Indentures, (ii) enter into any agreement or
arrangement relating to or otherwise complete the Debt Financing (or any
Alternate Financing) on any terms that are inconsistent with the terms set forth
in the Debt Commitment Letter or (iii) otherwise enter into any agreement or
arrangement relating to or otherwise complete the Debt Financing (or any
Alternate Financing), in the case of each of clauses (i), (ii) and (iii), in a
manner that would be materially adverse to the rights and obligations of the
Purchaser set forth in the Transaction Documents. The Company shall keep the
Purchaser reasonably informed regarding the transactions contemplated by the
Merger Agreement and the Debt Commitment Letter, including the expected timing
of the Merger Closing and any Effect that would reasonably be expected,
individually or in the aggregate along with other Effects, to materially delay
the Merger Closing or make the Merger Closing unlikely to occur.

 

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3.10 Investor Information. The information relating to the Purchaser and its
Affiliates that is or will be supplied in writing by the Purchaser or its
Affiliates for inclusion in any document (a) filed with the SEC by the Company
in connection with this Agreement (including any report filed with the SEC by
the Company in connection with the consummation of the transactions contemplated
by this Agreement on Form 8-K pursuant to the Exchange Act), or (b) prepared in
connection with the consummation of the Debt Financing (or any Alternate
Financing), in each case, will not, at the time such document is so filed,
furnished or prepared, as applicable, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.

ARTICLE IV

ADDITIONAL AGREEMENTS

4.1 Legend.

(a) The Purchaser agrees that all certificates (if any) or other instruments or
records representing the Purchased Shares subject to this Agreement (or the
shares of Common Stock issuable upon conversion thereof) will bear or contain a
legend substantially to the following effect:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR
SUCH LAWS.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND OTHER
RESTRICTIONS SET FORTH IN A STOCKHOLDERS’ AGREEMENT, DATED AS OF [•], 2019, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE ISSUER.

(b) Upon request of the Purchaser (or any Permitted Transferee), upon receipt by
the Company of an opinion of counsel reasonably satisfactory to the Company to
the effect that such legend is no longer required under the Securities Act and
applicable state Laws, the Company shall promptly cause the first paragraph of
the legend to be removed from, or no longer applied to, any certificate for, or
record representing, any share of Series A Preferred Stock to be transferred in
accordance with the terms of the Stockholders’ Agreement. The Purchaser
acknowledges that the Purchased Shares and the shares of Common Stock issuable
upon conversion of the Series A Preferred Stock have not been registered under
the Securities Act or under any state securities Laws and will not sell or
otherwise dispose of any of the Purchased Shares or shares of Common Stock
issuable upon conversion of the Series A Preferred Stock, except in compliance
with the registration requirements or exemption provisions of the Securities
Act, any other applicable securities Laws and the Stockholders’ Agreement.

 

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4.2 Tax Matters.

(a) Each holder of Series A Preferred Stock will timely furnish the Company and
its agents with any tax form or certification (including Internal Revenue
Service Form W-9, an applicable Internal Revenue Service Form W-8 (together with
all applicable attachments), or any successor to such Internal Revenue Service
forms) that the Company or its agents reasonably request (i) to permit the
Company and its agents to make payments to such holder without, or at a reduced
rate of, deduction or withholding, (ii) to enable the Company and its agents to
qualify for a reduced rate of reduction or withholding in any jurisdiction from
or through which they receive payments, and (iii) to enable the Company and its
agents to satisfy reporting and other obligations under the United States
Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, or
any other applicable Law or regulation, and will update or replace such tax form
or certification in accordance with their terms or subsequent amendments. Each
holder of Series A Preferred Stock acknowledges that the failure to provide,
update or replace any such form or certificate may result in the imposition of
withholding or back-up withholding on payments to such holder, or to the
Company. Amounts withheld by the Company or its agents that are, in their
reasonable judgment, required to be withheld pursuant to applicable tax Laws
will be treated as having been paid to the holder of Series A Preferred Stock by
the Company. Each holder of Series A Preferred Stock will also provide the
Company or its agents with any correct, complete and accurate information or
documentation that may be required for the Company to comply with FATCA and to
prevent the imposition of United States federal withholding tax under FATCA on
payments to or for the benefit of the Company.

(b) Absent a change in Law or Internal Revenue Service practice, or a contrary
determination (as defined in Section 1313(a) of the Code), the Purchaser and the
Company agree for United States federal income tax and withholding tax purposes
not to treat (i) the Purchased Shares (based on their terms as set forth in the
Series A Certificate) as “preferred stock” within the meaning of Section 305 of
the Code and Treasury Regulations Section 1.305-5, or (ii) payments made
pursuant to Section 1.1(c) of this Agreement as “fixed or determinable annual or
periodical income” within the meaning of Treasury Regulations
Section 1.1441-2(b) and shall not take any position inconsistent with such
treatments.

(c) The Company shall pay any and all documentary, stamp and similar issue or
transfer tax due on (i) the issuance of the Purchased Shares or (ii) the
issuance of shares of Common Stock upon conversion of the Series A Preferred
Stock. However, in the case of conversion of Series A Preferred Stock, the
Company shall not be required to pay any tax or duty that may be payable in
respect of any transfer involved in the issuance and delivery of shares of
Common Stock or Series A Preferred Stock in a name other than that of the holder
of the shares to be converted, and no such issuance or delivery shall be made
unless and until the person requesting such issuance has paid to the Company the
amount of any such tax or duty, or has established to the satisfaction of the
Company that any such tax or duty has been paid.

(d) The Purchaser and the Company shall cooperate with each other in connection
with any redemption of part of the Purchased Shares and use good-faith efforts
to structure such redemption so that such redemption may be treated as a sale or
exchange pursuant to Section 302 of the Code; provided that nothing in this
Section 4.2(d) shall require the Company to purchase any of the Purchased
Shares; provided, further, that the Company makes no representation or warranty
hereunder regarding the tax treatment of any redemption of the Purchased Shares.

 

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(e) If (i) the Company has issued Indebtedness that is convertible into or
exchangeable for any capital stock of the Company (“Convertible Debt”), and
(ii) the accrual of any PIK Dividend on the Purchaser’s Series A Preferred Stock
would reasonably be expected (as determined by the Company in good faith) to
cause the Purchaser to be treated, pursuant to Section 305(b)(2) of the Code, as
receiving a distribution of property to which Section 301 of the Code applies as
a result of a payment (including interest paid in kind) on the Convertible Debt,
then the Company agrees that it will elect to declare and pay a Cash and PIK
Dividend on the Purchaser’s Series A Preferred Stock with respect to which the
Cash and PIK Dividend Aggregate Cash Amount shall be such amount as the
Purchaser shall request in writing but shall in no event be greater than the
amount that the Purchaser and the Company reasonably determine is sufficient for
the Purchaser to make pro rata cash distributions to its direct or indirect
equity holders until each such equity holder receives an amount equal to the
product of (A) the greatest of (1) the highest effective marginal combined U.S.
federal, state and local income tax rate applicable to a corporation or an
individual residing in Los Angeles, California, taking into account the
character of such income, (2) the rate imposed under Code Section 871(a), and
(3) the rate imposed under Code Section 881(a), multiplied by (B) the value of
such Cash and PIK Dividend allocated to such equity holder. For the avoidance of
doubt, nothing in this Section 4.2(e) shall limit or restrict the Company’s
right to elect to settle any Regular Dividend (or portion thereof) pursuant to a
cash payment. Defined terms used in this Section 4.2(e) and not defined in this
Agreement shall have the meanings ascribed to such terms in the Series A
Certificate.

ARTICLE V

INDEMNITY

5.1 Indemnification by the Company. From and after the Closing, the Company
shall indemnify the Purchaser and its Affiliates and its and their officers,
directors, managers, employees and agents (collectively, the “Purchaser Related
Parties”) from, and hold each of them harmless against, any and all losses,
expenses, damages, actions, suits, proceedings (including any investigation,
litigation or inquiry), demands, claims and causes of action (“Losses”) and, in
connection therewith and promptly upon demand, pay or reimburse each of them for
all reasonable and documented out-of-pocket costs, losses, liabilities, damages
or expenses of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel and all other reasonable and documented out-of-pocket
expenses incurred in connection with investigating, defending or preparing to
defend any such matter that may be incurred by them or asserted against or
involve any of them), whether or not involving a Third Party Claim, incurred by
or asserted against such Purchaser Related Parties, as a result of or arising
out of (a) the failure of the representations or warranties made by the Company
contained in Section 2.1(a), 2.1(b), 2.1(c)(1), 2.1(d), 2.1(e), 2.1(f)(1),
2.1(f)(4) or in any certificate delivered pursuant hereto to be true and
correct, or (b) the breach of any of the covenants of the Company contained
herein; provided that, in the case of the immediately preceding clause (a), such
claim for indemnification relating to a breach of any representation or warranty
is made prior to the expiration of such representation or warranty as set forth
in Section 5.5; provided, further, that, for purposes of determining when an
indemnification claim has been made, the date upon which a Purchaser Related
Party shall have given written notice (stating in reasonable detail the basis of
the claim for indemnification) to the Company in accordance with the terms and
conditions of this Agreement shall constitute the date upon which such claim has
been made.

 

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5.2 Indemnification by the Purchaser. From and after the Closing, the Purchaser
shall indemnify the Company, and its controlled Affiliates and its and their
officers, directors, managers, employees and agents (collectively, the “Company
Related Parties”) from, and hold each of them harmless against, any and all
Losses and, in connection therewith and promptly upon demand, pay or reimburse
each of them for all reasonable and documented out-of-pocket costs, losses,
liabilities, damages or expenses of any kind or nature whatsoever (including the
reasonable fees and disbursements of counsel and all other reasonable and
documented out-of-pocket expenses incurred in connection with investigating,
defending or preparing to defend any such matter that may be incurred by them or
asserted against or involve any of them), whether or not involving a Third Party
Claim, incurred by or asserted against such Company Related Parties as a result
of or arising out of (a) the failure of any of the representations or warranties
made by the Purchaser contained in Section 2.2(a), 2.2(b)(1), 2.2(b)(2)(i)(A) or
2.2(c) to be true and correct, (b) the breach of any applicable securities Laws
in connection with the assignment of the Purchased Shares by the Purchaser, or
any of its successors or assigns, to any Permitted Transferee, or (c) the breach
of any of the covenants of the Purchaser contained herein; provided that, in the
case of the immediately preceding clause (a), such claim for indemnification
relating to a breach of any representation or warranty is made prior to the
expiration of such representation or warranty as set forth in Section 5.5;
provided, further, that, for purposes of determining when an indemnification
claim has been made, the date upon which a Company Related Party shall have
given written notice (stating in reasonable detail the basis of the claim for
indemnification) to the Purchaser in accordance with the terms and conditions of
this Agreement shall constitute the date upon which such claim has been made.

5.3 Indemnification Procedure.

(a) A claim for indemnification for any matter not involving a Third Party Claim
may be asserted by written notice to the party from whom indemnification is
sought in accordance with the terms and conditions of this Agreement; provided,
however, that failure to so notify the Indemnifying Party shall not preclude the
Indemnified Party from any indemnification that it may claim in accordance with
this Article V unless and to the extent the Indemnifying Party is materially
prejudiced by such failure.

(b) Promptly after any Company Related Party or Purchaser Related Party (in such
context, the “Indemnified Party”) has received notice of any indemnifiable claim
hereunder from, or the commencement of any action, suit or proceeding by, a
person unaffiliated with either party or its respective Affiliates, which claim
the Indemnified Party believes in good faith is an indemnifiable claim under
this Agreement (each, a “Third Party Claim”), the Indemnified Party shall give
the indemnitor hereunder (in such context, the “Indemnifying Party”) written
notice of such Third Party Claim identifying the nature and the basis of such
Third Party Claim to the extent then known, but failure or delay to so notify
the Indemnifying Party will not relieve the Indemnifying Party from any
liability it may have to such Indemnified Party hereunder except to

 

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the extent that the Indemnifying Party is materially prejudiced by such failure
or delay. The Indemnifying Party shall have the right to assume and control the
defense of, and settle, at its own expense and by its own counsel, any such
matter as long as the Indemnifying Party pursues the same diligently and in good
faith. If the Indemnifying Party undertakes to assume and control the defense or
settle such Third Party Claim, it shall promptly, and in no event later than ten
(10) Business Days after notice of such claim, notify the Indemnified Party of
its intention to do so, and the Indemnified Party shall cooperate in good faith
with the Indemnifying Party and its counsel in all reasonable respects in the
defense thereof or the settlement thereof. Subject to the requirements of
applicable Law, any material agreement pursuant to which the Indemnified Party
or the Indemnifying Party is bound and the applicability of attorney-client
privilege, such cooperation shall include, but shall not be limited to,
furnishing the Indemnifying Party with any books, records and other information
reasonably requested by the Indemnifying Party and in the Indemnified Party’s
possession or control. The Indemnifying Party shall bear all reasonable and
documented out-of-pocket costs of the Indemnified Party associated with such
cooperation by the Indemnified Party. After the Indemnifying Party has notified
the Indemnified Party of its intention to undertake to defend or settle any such
asserted liability, and for so long as the Indemnifying Party diligently pursues
such defense in good faith, the Indemnifying Party shall not be liable for any
additional legal expenses incurred by the Indemnified Party in connection with
any defense or settlement of such asserted liability; provided, however, that
the Indemnified Party shall be entitled (i) at its own expense, to participate
in the defense of such asserted liability and any negotiations of the settlement
thereof and (ii) if (A) the Indemnifying Party has, within fifteen (15) Business
Days of when the Indemnified Party provides written notice of a Third Party
Claim, failed to (x) assume the defense or settlement of such Third Party Claim,
and (y) notify the Indemnified Party of such assumption, or (B) the defendants
in any such action include both the Indemnified Party and the Indemnifying Party
and counsel to the Indemnified Party shall have concluded that there may be one
or more reasonable defenses available to the Indemnified Party that are
different from or in addition to those available to the Indemnifying Party or if
the interests of the Indemnified Party reasonably may be deemed to conflict with
the interests of the Indemnifying Party, then, in each case, the Indemnified
Party shall have the right to select one (1) separate counsel and, upon prompt
notice to the Indemnifying Party, to assume such settlement or legal defense and
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any
provision of this Agreement to the contrary, the Indemnifying Party shall not
settle any indemnifiable claim hereunder without the consent of the Indemnified
Party, unless the settlement thereof imposes no liability or obligation on, and
includes a complete release from liability of, and does not contain any
admission of wrongdoing by, the Indemnified Party.

5.4 Tax Matters. All indemnification payments under this Article V shall be
treated as adjustments to the Aggregate Purchase Price for tax purposes, except
as otherwise required by applicable Law.

5.5 Survival. The representations and warranties of the parties contained in
this Agreement shall survive for twelve (12) months following the Closing,
except that (a) the representations and warranties of the Company contained in
Sections 2.1(a), 2.1(b), 2.1(c)(1) and 2.1(e) will survive for two (2) years
following the Closing, and (b) the representations and warranties of the
Purchaser contained in Sections 2.2(a), 2.2(b)(1) or 2.2(c) will survive until
the expiration of the applicable statute of limitations. All of the covenants or
other agreements of the parties contained in this Agreement shall survive until
fully performed or fulfilled, unless and to the extent that non-compliance with
such covenants or agreements is waived in writing by the party entitled to such
performance.

 

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5.6 Limitation on Damages. Notwithstanding any provision of this Agreement to
the contrary, except in the case of actual and intentional fraud, no party shall
have any liability to the other party in excess of the Aggregate Purchase Price,
and neither party shall be liable for any exemplary or punitive damages or any
other damages or losses to the extent not reasonably foreseeable arising out of
or in connection with this Agreement or the transactions contemplated hereby (in
each case, unless any such damages are awarded pursuant to a Third Party Claim).

ARTICLE VI

MISCELLANEOUS

6.1 Expenses. Each of the parties will bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
pursuant to this Agreement, except as set forth in Section 4.2(c).

6.2 Amendment; Waiver. No amendment or waiver of any provision of this Agreement
will be effective with respect to any party unless made in writing and signed by
an officer of a duly authorized representative of such party. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The conditions to each party’s obligation to
consummate the Closing are for the sole benefit of such party and may be waived
by such party in whole or in part to the extent permitted by applicable Law. No
waiver of any party will be effective unless it is in a writing signed by a duly
authorized officer of the waiving party that makes express reference to the
provision or provisions subject to such waiver. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by Law.

6.3 Counterparts; Electronic Transmission. For the convenience of the parties,
this Agreement may be executed in any number of separate counterparts, each such
counterpart being deemed to be an original instrument, and all such counterparts
will together constitute the same agreement. Executed signature pages to this
Agreement may be delivered by facsimile or other means of electronic
transmission and such facsimiles or other means of electronic transmission will
be deemed as sufficient as if actual signature pages had been delivered.

6.4 Governing Law. This Agreement will be governed by and construed in
accordance with the Laws of the State of New York (excluding those choice-of-law
principles of such State that would permit the application of the Laws of a
jurisdiction other than such State), without regard to any conflicts of laws
principles that would result in the application of the Laws of another
jurisdiction. The parties hereby irrevocably and unconditionally consent to
submit to the exclusive jurisdiction state and federal courts located in the
Borough of Manhattan, State of New York for any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions

 

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contemplated hereby; provided, however, that any judgment in any such suit,
action or proceeding may be enforced in any court with jurisdiction over the
subject matter. The parties hereby irrevocably and unconditionally waive, to the
fullest extent permitted by applicable Law, any objection that they may now or
hereafter have to the laying of venue of any such action, suit or proceeding in
any such court or that any such action, suit or proceeding which is brought in
any such court has been brought in an inconvenient forum. Process in any such
action, suit or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court. Without limiting
the foregoing, each party agrees that service of process on such party in
accordance with the procedures provided in Section 6.6 shall be deemed effective
service of process on such party.

6.5 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

6.6 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally or by
facsimile or electronic communication, upon confirmation of receipt, (b) on the
first Business Day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the third Business Day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth below, or
pursuant to such other address as may be designated in writing by the party to
receive such notice.

 

 

(a)

If to Purchaser:

 

    c/o Leonard Green & Partners, L.P.

    11111 Santa Monica Blvd., #2000

    Los Angeles, CA 90025

    Attn:                 Peter Zippelius

    E-mail:             pzippelius@leonardgreen.com

    Fax:                  310-954-0404

with a copy to (which copy alone shall not constitute notice):

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Attn:                 Howard A. Sobel, Jason H. Silvera and Greg Rodgers

E-mail:             howard.sobel@lw.com; jason.silvera@lw.com;

                          greg.rodgers@lw.com

Fax:                  212-751-4864

 

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(b)

If to the Company:

Catalent, Inc.

14 Schoolhouse Road

Somerset, New Jersey 08873

Attn:                 General Counsel – Steven L. Fasman

E-mail:             GenCouns@catalent.com

Fax:                  (732) 537-6490

with a copy to (which copy alone shall not constitute notice):

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attn:                 Steven Epstein ; Matthew Soran

E-mail:              steven.epstein@friedfrank.com; matthew.soran@friedfrank.com

Fax:                   212-859-4000

Additionally, so long as the Purchaser owns any shares of Series A Preferred
Stock issued pursuant to this Agreement, the Company shall provide to the
Purchaser in the manner set forth in this Section 6.6 a copy of any notice,
request, instruction or other document given under the Series A Certificate to
the Purchaser.

6.7 Entire Agreement. This Agreement (including the Schedules hereto and the
documents and instruments referred to in this Agreement) and the Confidentiality
Agreement, constitute the entire agreement among the parties, and this Agreement
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and transactions
contemplated hereby, other than the Confidentiality Agreement.

6.8 Assignment. Neither this Agreement, nor any of the rights, interests or
obligations hereunder may be assigned by any of the parties (whether by
operation of Law or otherwise) without the prior written consent of the other
party; provided, however, that (a) (i) subject to the terms and conditions of
the Stockholders’ Agreement, the Purchaser may assign its rights, interests and
obligations under this Agreement, in whole or in part, to one or more Permitted
Transferees, and (ii) in the event of such assignment, the assignee shall agree
in writing to be bound by the provisions of this Agreement, including the
rights, interests and obligations so assigned and (b) the Purchaser may assign
Section 4.2 and applicable provisions of this Article VI to any transferee
permitted by the terms and conditions of the Stockholders’ Agreement; provided
that no such assignment will relieve any such assignor Purchaser of its
obligations hereunder prior to the Closing; provided, further, that the
Purchaser shall not assign any of its obligations hereunder with the primary
intent of avoiding, circumventing or eliminating its obligations hereunder. Any
assignment not expressly permitted by this Agreement shall be void ab initio.

 

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6.9 Interpretation; Other Definitions. Wherever required by the context of this
Agreement, the singular shall include the plural and vice versa, and the
masculine gender shall include the feminine and neuter genders and vice versa,
and references to any agreement, document or instrument shall be deemed to refer
to such agreement, document or instrument as amended, supplemented or modified
from time to time. All article, section, paragraph or clause references not
attributed to a particular document shall be references to such parts of this
Agreement, and all exhibit, annex, letter and schedule references not attributed
to a particular document shall be references to such exhibits, annexes, letters
and schedules to this Agreement. In addition, the following terms are ascribed
the following meanings:

(a) the word “or” is not exclusive;

(b) the words “including,” “includes,” “included” and “include” are deemed to be
followed by the words “without limitation”;

(c) the terms “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision;

(d) the term “Business Day” shall mean a day that is a Monday, Tuesday,
Wednesday, Thursday or Friday and is not a day on which banking institutions in
New York, New York, generally are authorized or obligated by Law to close.

(e) the term “person” has the meaning given to it in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

(f) “Affiliate” shall mean, with respect to any specified person, any other
person directly or indirectly controlling, controlled by or under common control
with, such specified person; provided, however, that (i) portfolio companies in
which any person or any of its Affiliates has an investment shall not be deemed
an Affiliate of such person (except, for the purposes of Sections 3.2, 5.1, 6.16
and 6.17, such portfolio companies shall be deemed Affiliates), or (ii) the
Company, any Company Subsidiary, or any of the Company’s other controlled
Affiliates, in each case, will not be deemed to be Affiliates of the Purchaser,
any Permitted Transferee of the Purchaser or any portfolio company of the
Purchaser or any of the Purchaser’s Affiliates for purposes of this Agreement;
provided, however, that for the purposes of Section 3.5, any portfolio company
of the Purchaser or its Affiliates that (but for clause (i) of this definition)
would be an Affiliate of the Purchaser or a Permitted Transferee of the
Purchaser will be an Affiliate if the Purchaser, a Permitted Transferee of the
Purchaser or any of their respective Affiliates (or any representative on behalf
of the Purchaser, any Permitted Transferee of the Purchaser or any of their
respective Affiliates) has provided, directly or indirectly, such portfolio
company with Information subject to the restrictions in Section 3.5. For
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlled by” and “under common control with”) when used with
respect to any person, means the possession, directly or indirectly, of the
power to cause the direction of management or policies of such person, whether
through the ownership of voting securities, by contract or otherwise.

(g) “Alternate Financing” shall mean the “Alternate Financing”, as defined in
the Merger Agreement.

 

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(h) “Company Material Adverse Effect” shall mean, with respect to the Company,
any Effect that, individually or taken together with all other Effects that have
occurred prior to the date of determination of the occurrence of the Company
Material Adverse Effect, is or is reasonably likely to be materially adverse to
the business, results of operations or financial condition of the Company and
the Company Subsidiaries, taken as a whole; provided, however, that in no event
shall any of the following individually or taken together, be deemed to
constitute, or be taken into account in determining whether a Company Material
Adverse Effect has occurred: (i) any change in the credit rating of the Company
or any Company Subsidiary or any change in the Company’s stock price or trading
volume on the NYSE, (ii) any failure by the Company (or any Company Subsidiary)
to meet internal or analyst revenue, earnings or other financial projections or
expectations for any period or periods, (iii) any Effect that results from
changes affecting the industry in which the Company or any Company Subsidiary
operates, or the United States economy generally, or any Effect that results
from changes affecting general worldwide economic or United States or global
capital market conditions, including any increase in the costs of, or the
unavailability or any shortage of, products, supplies and materials purchased by
the Company or the Company Subsidiaries from third parties, (iv) any Effect
caused by the announcement of the transactions contemplated by the Merger
Agreement or this Agreement or the other Transaction Documents, or the identity
of the Purchaser or any of its Affiliates or equityholders as the purchaser in
connection with the transactions contemplated by this Agreement, (v) political
conditions, including acts of war (whether or not any declaration of war is
made) or terrorism, natural disasters, weather or meteorological conditions,
changes to climate, pandemics or natural disasters, (vi) any action taken or
omitted to be taken by the Company pursuant to the terms and conditions of this
Agreement (other than pursuant to the first paragraph of Section 3.8) or
otherwise at the written request or with the prior written consent of the
Purchaser, (vii) changes in GAAP or other accounting standards (or any
interpretation thereof), or (viii) changes in any Laws or other binding
directives issued by any Governmental Entity or interpretations or enforcement
thereof; provided, however, that (A) the exceptions in clause (i) and (ii) shall
not prevent or otherwise affect a determination that any Effect underlying such
change or failure has resulted in, or contributed to, a Company Material Adverse
Effect, and (B) with respect to clauses (iii), (v), (vii) and (viii), such
Effects, alone or in combination, may be deemed to constitute, or be taken into
account in determining whether a Company Material Adverse Effect has occurred,
but only to the extent such Effects disproportionately affect the Company and
the Company Subsidiaries, taken as a whole, compared to other companies
operating in the industries and markets in which the Company and the Company
Subsidiaries operate (in which case only the disproportionate Effects may be
taken into account in determining whether there has been a Company Material
Adverse Effect).

(i) “Company Permit” means any license, certificate, authorization, approval,
clearance, exemption, registration or permit issued by any Governmental Entity
held by the Company or any Company Subsidiary.

(j) “Credit Agreement” shall mean that certain Amended and Restated Credit
Agreement, dated as of May 20, 2014, by and among Catalent Pharma Solutions,
Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding Inc., as
administrative agent, collateral agent and swing line lender and other lenders
as parties thereto, as amended by that certain Amendment No. 1 to Amended and
Restated Credit Agreement, dated as of December 1, 2014, Amendment No. 2 to
Amended and Restated Credit Agreement, dated as of December 9, 2016, and
Amendment No. 3 to Amended and Restated Credit Agreement, dated as of
October 18, 2017 (including as supplemented by any Incremental Amendment (as
defined therein), including in connection with the consummation of the
transactions contemplated by the Merger Agreement).

 

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(k) “Debt Commitment Letter” shall mean the “Debt Commitment Letter”, together
with the related fee letter (subject to customary redactions), each in the form
as provided to the Purchaser at 5:12 p.m., New York City Time on April 13, 2019.

(l) “Debt Financing” shall mean the “Debt Financing”, as defined in the Merger
Agreement.

(m) “Effect” shall mean any change, event, effect, development or circumstance.

(n) “Environmental Law” shall mean any Laws regulating, relating to or imposing
standards of conduct concerning protection of the environment or of human health
and safety as related to exposure to hazardous substances.

(o) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the Department of
Labor thereunder.

(p) “FATCA” shall mean Section 1471 through 1474 of the Code, any current or
future regulations or official interpretations thereof, any agreement entered
into pursuant to Section 1471(b)(1) of the Code, and applicable
intergovernmental agreements and related legislation or official administrative
rules or practices with respect thereto.

(q) “Governmental Entity” shall mean any court, administrative or regulatory
agency or commission or other governmental or arbitral body or authority or
instrumentality, including any state-controlled or -owned corporation or
enterprise, in each case whether federal, state, local or foreign, and any
applicable industry self-regulatory organization.

(r) “Indentures” shall mean, collectively, that certain (i) Indenture, dated
December 9, 2016, by and among Catalent Pharma Solutions, Inc., the subsidiary
guarantors named therein, Deutsche Trustee Company Limited, as trustee, Deutsche
Bank AG, London Branch, as principal paying agent, and Deutsche Bank Luxembourg
S.A., as transfer agent and registrar, (ii) Indenture, dated October 18, 2017,
by and among Catalent Pharma Solutions, Inc., the subsidiary guarantors named
therein and Deutsche Bank Trust Company Americas, as trustee, and (iii) (A) the
indenture relating to issuance of senior unsecured notes or other debt
securities, or (B) the bridge loan agreement relating to senior unsecured
increasing rate loans, in each case, entered into in connection with the
consummation of the transactions contemplated by the Merger Agreement.

(s) “Intellectual Property” shall mean all worldwide intellectual property
rights, whether or not registered, including patents, utility models,
trademarks, service marks, trade names, corporate names, and trade dress (and
all goodwill relating thereto), domain names, copyrights and copyrighted works,
inventions, know-how, trade secrets, methods, processes, formulae, technical or
proprietary information and technology and all registrations, applications,
renewals, re-examinations, re-issues, divisions, continuations, continuations-in
part and foreign counterparts thereof.

 

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(t) “Knowledge of the Company” shall mean the actual knowledge, after reasonable
inquiry of their respective direct reports, of one or more of John Chiminski,
Wetteny Joseph, Steven L. Fasman or Scott Gunther.

(u) “Knowledge of the Purchaser” shall mean the actual knowledge, after
reasonably inquiry of their respective direct reports, of one or more of Peter
Zippelius, John Baumer or Andrew Goldberg.

(v) “Law” shall mean any law, statute, constitution, principle of common law,
ordinance, regulation and Order of any Governmental Entity.

(w) “Lien” shall mean any mortgage, pledge, security interest, encumbrance,
lien, charge or other restriction of any kind, whether based on common law,
statute or contract.

(x) “Material Adverse Impact” means any Effect that would, individually or in
the aggregate with one or more other Effects, would reasonably be expected to
have a material adverse effect on the Company’s and its Subsidiaries’ (taken as
a whole) ability to operate in the ordinary course of business consistent with
past practice.

(y) “Materials of Environmental Concern” shall mean any gasoline or petroleum
(including crude oil or any fraction thereof), petroleum product,
polychlorinated biphenyl, urea-formaldehyde insulation, asbestos, pollutant,
contaminant, radioactivity, and any other substance regulated pursuant to or
that could give rise to liability under any Environmental Law.

(z) “Merger Closing” shall mean the “Closing”, as defined in the Merger
Agreement.

(aa) “Merger Closing Date” shall mean the “Closing Date”, as defined in the
Merger Agreement.

(bb) “Order” shall mean any judgment, order, writ, injunction, ruling,
stipulation, determination, award or decree of or by, or any settlement under
the jurisdiction of, any Governmental Entity.

(cc) “Permitted Transferee” shall mean any “Permitted Transferee”, as defined in
the Stockholders’ Agreement.

(dd) “Plan” shall mean (i) any employee pension benefit plan (as defined in
Section 3(2)(A) of ERISA) maintained for employees of the Company or of any
member of a “controlled group,” as such term is defined in Section 414 of the
Code, of which the Company or any Company Subsidiary is a part, or any such
employee pension benefit plan to which the Company or any Company Subsidiary is
required to contribute on behalf of its employees, and any other employee
benefit plan (as defined in Section 3(3) of ERISA), whether or not subject to
ERISA; or (ii) any compensation or other benefit plan, policy, program,
agreement or arrangement, including any employment, change in control, bonus,
equity-based compensation, retention or other similar agreement, that the
Company or any Company Subsidiary, maintains, sponsors, is a party to, or as to
which the Company or any Company Subsidiary otherwise has any material
obligation or material liability in respect of its employees; in each case,
excluding any compensation or benefit arrangement maintained by a Governmental
Entity.

 

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(ee) “Registration Rights Agreement” shall mean that certain Registration Rights
Agreement, in substantially the form attached hereto as Schedule B.

(ff) “SEC” shall mean the U.S. Securities and Exchange Commission.

(gg) “Stockholders’ Agreement” shall mean that certain Stockholders’ Agreement,
in substantially the form attached hereto as Schedule C.

(hh) “Target Material Adverse Effect” shall mean a “Company Material Adverse
Effect”, as defined in the Merger Agreement.

(ii) “Tax Return” shall mean any return, declaration, report, statement or other
document filed or required to be filed in respect of Taxes (including any
attachments thereto), including any information return, claim for refund,
amended return and declaration of estimated Tax.

(jj) “Taxes” shall mean all United States federal, state, local or foreign
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, excise, real and personal property, profits,
estimated, severance, occupation, production, capital gains, capital stock,
goods and services, environmental, employment, withholding, stamp, value added,
alternative or add-on minimum, sales, transfer, use, license, payroll and
franchise taxes or any other tax of any kind whatsoever, and such term shall
include any interest, penalties, fines, or additions to tax attributable to such
taxes, charges, fees, levies or other assessments, and any liability for Taxes
(as heretofore defined) payable by reason of contract, assumption, transferee
liability, operation of Law, Treasury Regulations Section 1.1502-6(a) (or any
predecessor or successor thereof and any analogous or similar provision under
Law).

(kk) “Transaction Documents” shall mean this Agreement, the Series A
Certificate, the Registration Rights Agreement and the Stockholders’ Agreement.

(ll) “Treasury Regulations” shall mean the regulations promulgated under the
Code, as such regulations may be amended from time to time.

6.10 Captions. The article, section, paragraph and clause captions herein are
for convenience of reference only, do not constitute part of this Agreement and
will not be deemed to limit or otherwise affect any of the provisions hereof.

6.11 Severability. If any provision of this Agreement or the application thereof
to any person (including the officers and directors of the parties) or
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof, or the application of
such provision to persons or circumstances other than those as to which it has
been held invalid or unenforceable, will remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination,
the parties shall negotiate in good faith in an effort to agree upon a suitable
and equitable substitute provision to effect the original intent of the parties.

 

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6.12 No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person other than the
parties (and their permitted assigns), any benefit, right or remedy, other than
(a) the Indemnified Parties pursuant to Article V, and (b) Buyer shall be a
direct third party beneficiary of the covenants and agreements of the Purchaser
set forth in Article I of this Agreement, entitled the rights and benefits of
the Company set forth therein and the right to enforce the Purchaser’s full
compliance with such provisions as if Buyer were a party to this Agreement.

6.13 Public Announcements. Subject to each party’s disclosure obligations
imposed by Law or the rules of any stock exchange upon which its securities are
listed, each of the parties will cooperate in good faith with each other in the
development and distribution of all news releases and other public information
disclosures with respect to this Agreement and any of the transactions
contemplated by this Agreement, and neither the Company nor the Purchaser (or
the Purchaser’s Affiliates) will make any such news release or public disclosure
without first consulting with the other, and, in each case, also receiving the
other’s consent (which shall not be unreasonably withheld, conditioned or
delayed), and each party shall coordinate with the party whose consent is
required with respect to any such news release or public disclosure.
Notwithstanding anything to the contrary in the foregoing, this Section 6.13
shall not apply to any press release or other public statement made by the
Company or the Purchaser (or the Purchaser’s Affiliates) which (a) is consistent
with prior disclosure (including pursuant to any communications plan agreed to
between the Company and the Purchaser and its Affiliates prior to such
disclosure) and does not contain any information relating to the transactions
that has not been previously announced or made public in accordance with the
terms of this Agreement, or (b) is made, in compliance with the terms and
conditions of Section 3.5, to its (1) auditors, attorneys, accountants,
financial advisors, or Permitted Transferees, or (2) limited partners.

6.14 Specific Performance. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not fully
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that, in the event of any breach or threatened breach of
any covenant or agreement set forth in this Agreement, without the necessity of
posting bond or other undertaking, the parties shall be entitled to specific
performance of the terms hereof or an injunction or injunctions restraining any
such breach or threatened breach, this being in addition to any other remedies
to which they are entitled at law or equity, and in the event that any action or
suit is brought in equity to enforce the provisions of this Agreement, and no
party will allege, and each party hereby waives, the defense or counterclaim
that there is an adequate remedy at law.

6.15 Termination. Prior to the Closing, this Agreement may only be terminated:

(a) by mutual written agreement of the Company and the Purchaser;

 

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(b) by the Company or the Purchaser, upon written notice to the other party
given at any time on or after five Business Days after August 14, 2019, in the
event that the Closing shall not have occurred on or before such date; provided,
however, that the right to terminate this Agreement pursuant to this
Section 6.15(b) shall not be available to any party whose failure to fulfill any
obligations under this Agreement shall have been the principal cause of, or
shall have primarily resulted in, the failure of the Closing to occur on or
prior to such date;

(c) without any action by either party, if the Merger Agreement is terminated in
accordance with its terms at any time prior to the Closing;

(d) by written notice given by the Company to the Purchaser in accordance with
the terms and conditions of this Agreement, if there have been one or more
inaccuracies in or breaches of one or more representations, warranties,
covenants or agreements made by the Purchaser in this Agreement such that the
conditions in Section 1.3(c)(1) or (2) would not be satisfied and which have not
been cured by the Purchaser thirty (30) days after receipt by the Purchaser of
written notice from the Company requesting such inaccuracies or breaches to be
cured; or

(e) by written notice given by the Purchaser to the Company in accordance with
the terms and conditions of this Agreement, if there have been one or more
inaccuracies in or breaches of one or more representations, warranties,
covenants or agreements made by the Company in this Agreement such that the
conditions in Section 1.3(b)(1) or (2) would not be satisfied and which have not
been cured by the Company within thirty (30) days after receipt by the Company
of written notice from the Purchaser requesting such inaccuracies or breaches to
be cured.

6.16 Effects of Termination. In the event of any termination of this Agreement
in accordance with Section 6.15, neither party (nor any of its Affiliates) shall
have any liability or obligation to the other (or any of its Affiliates) under
or in respect of this Agreement, except to the extent of (a) any liability
arising from any breach by such party of its obligations pursuant to this
Agreement arising prior to such termination, and (b) any actual and intentional
fraud or intentional or willful breach of this Agreement. In the event of any
such termination, this Agreement shall become void and have no effect, and the
transactions contemplated hereby shall be abandoned without further action by
the parties, in each case, except (x) as set forth in the preceding sentence and
(y) that the provisions of Sections 3.5 (Confidentiality), 6.2 to 6.14
(Amendment, Waiver; Counterparts, Electronic Transmission; Governing Law; Waiver
of Jury Trial; Notices; Entire Agreement, Assignment; Interpretation; Other
Definitions; Captions; Severability; No Third Party Beneficiaries; Public
Announcements; and Specific Performance) and Section 6.17 (Non-Recourse) shall
survive the termination of this Agreement.

6.17 Non-Recourse. This Agreement may only be enforced against, and any claims
or causes of action that may be based upon, arise out of or relate to this
Agreement, or the negotiation, execution or performance of this Agreement may
only be made against the entities that are expressly identified as parties,
including entities that become parties after the date hereof, including
permitted assignees and successors, or that agree in writing for the benefit of
the Company to be bound by the terms of this Agreement applicable to the
Purchaser, and no former, current or future equityholders, controlling persons,
directors, officers, employees, agents or Affiliates of any party or any former,
current or future equityholder, controlling person, director,

 

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officer, employee, general or limited partner, member, manager, advisor, agent
or Affiliate of any of the foregoing (each, a “Non-Recourse Party”) shall have
any liability for any obligations or liabilities of the parties or for any claim
(whether in tort, contract or otherwise) based on, in respect of, or by reason
of, the transactions contemplated hereby or in respect of any representations
made or alleged to be made in connection herewith. Without limiting the rights
of any party against the other parties, in no event shall any party or any of
its Affiliates seek to enforce this Agreement against, make any claims for
breach of this Agreement against, or seek to recover monetary damages from, any
Non-Recourse Party.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties as of the date first herein above
written.

 

CATALENT, INC.

By:

 

/s/ John Chiminski

Name:

 

John Chiminski

Title:

 

Chief Executive Officer

[Signature Page to Equity Commitment and Investment Agreement]

 

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GREEN EQUITY INVESTORS VII, L.P.

By: GEI Capital VII, LLC, its General Partner

 

By:

 

/s/ Pete Zippelius

Name:

 

Pete Zippelius

Title:

 

Senior Vice President

GREEN EQUITY INVESTORS SIDE VII, L.P.

By: GEI Capital VII, LLC, its General Partner

By:

 

/s/ Pete Zippelius

Name:

 

Pete Zippelius

Title:

 

Senior Vice President

[Signature Page to Equity Commitment and Investment Agreement]

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SCHEDULE A

Form of Series A Certificate

[See Attached]

 

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SCHEDULE A

CATALENT, INC.

CERTIFICATE OF DESIGNATION OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES A CONVERTIBLE PREFERRED STOCK

PURSUANT TO SECTION 151 OF THE

DELAWARE GENERAL CORPORATION LAW

The undersigned, Steven L. Fasman, does hereby certify that:

 

 

1.

I am the Secretary of Catalent, Inc., a Delaware corporation (the
“Corporation”).

 

 

2.

The Corporation is authorized to issue 100,000,000 shares of preferred stock,
par value $0.01 per share, none of which has been issued prior to the date
hereof.

 

 

3.

The following resolutions were duly adopted by the Board of Directors of the
Corporation (the “Board of Directors”):

WHEREAS, the certificate of incorporation of the Corporation (the “Charter”)
provides for a class of its authorized stock known as Preferred Stock,
consisting of 100,000,000 shares, par value $0.01 per share, issuable from time
to time in one or more series;

WHEREAS, the Board of Directors is expressly authorized, by resolution or
resolutions, to provide, out of the unissued shares of preferred stock, for one
or more series of preferred stock and, with respect to each such series, to fix,
without further stockholder approval, the designation of such series, the powers
(including voting powers), preferences and relative, participating, optional and
other special rights, and the qualifications, limitations or restrictions
thereof, and the number of shares of such series; and

WHEREAS, it is the desire of the Board of Directors, pursuant to its authority
as aforesaid, to fix the powers, preferences, rights, qualifications,
limitations, restrictions and other matters relating to a series of shares of
preferred stock, which shall initially consist of [●]1 shares of preferred stock
that the Corporation has the authority to issue as Series A Convertible
Preferred Stock, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide
for the issuance of a series of preferred stock for cash and does hereby fix and
determine the rights, preferences, restrictions and other matters relating to
such series of preferred stock as follows:

 

 

 

1 

Note to Draft: To equal number of shares set forth in the “Purchase Notice” to
be delivered by the Corporation pursuant to the Investment Agreement.

 

1

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ARTICLE I

DESIGNATION AND FORM

The shares of such series shall be designated “Series A Convertible Preferred
Stock” and the number of shares constituting such series shall initially be [●]
(the “Series A Preferred Stock”). Subject to the terms and conditions set forth
in Article VI, the number of shares of Series A Preferred Stock may be increased
or decreased (but not below the number of shares of Series A Preferred Stock
then issued and outstanding) by (a) further resolution duly adopted by the Board
of Directors, or any duly authorized committee thereof, and (b) the filing of an
amendment to this Certificate of Designation pursuant to the applicable
provisions of the DGCL stating that such increase, or decrease, as applicable,
has been so authorized. Series A Preferred Stock will be evidenced in book-entry
form and shall not be certificated.

ARTICLE II

CURRENCY

All shares of Series A Preferred Stock shall be denominated in United States
dollars, and all payments and distributions thereon or with respect thereto
shall be made in United States dollars. All references herein to “$” or
“dollars” refer to United States dollars.

ARTICLE III

RANKING

The Series A Preferred Stock shall, with respect to dividend rights and rights
upon a Liquidation Event, rank:

A.     senior to each other class or series of Capital Stock of the Corporation
now existing or hereafter authorized, classified or reclassified, the terms of
which do not expressly provide that such class or series ranks on a parity basis
with, or senior to, the shares of Series A Preferred Stock with respect to
dividend rights or rights upon a Liquidation Event, including the shares of
common stock of the Corporation, par value $0.01 per share (the “Common Stock”)
(all such Capital Stock, including the Common Stock, collectively, the “Junior
Stock”);

B.     on a parity basis with each other class or series of Capital Stock of the
Corporation now existing or hereafter authorized, classified or reclassified,
the terms of which expressly provide that such class or series ranks on a parity
basis with the shares of Series A Preferred Stock with respect to dividend
rights or rights upon a Liquidation Event (all such Capital Stock collectively,
the “Parity Stock”); and

C.     junior to each other class or series of Capital Stock of the Corporation
now existing or hereafter authorized, classified or reclassified, the terms of
which expressly provide that such class or series ranks senior to the shares of
Series A Preferred Stock with respect to dividend rights or rights upon a
Liquidation Event (all such Capital Stock collectively, the “Senior Stock”).

 

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The Series A Preferred Stock shall, with respect to dividend rights and rights
upon a Liquidation Event, rank junior to any and all existing or future claims
in respect of Indebtedness of the Corporation or any of its Subsidiaries.

ARTICLE IV

DIVIDENDS

A.     Each share of Series A Preferred Stock shall be entitled to receive,
when, as and if authorized and declared by the Board of Directors, out of any
funds legally available therefor, cumulative dividends in an amount equal to (i)
5.00% per annum of the Stated Value of such share as of the Record Date for such
dividend (such rate per annum, as may be adjusted pursuant to the terms and
conditions hereof, including Section (H) of this Article IV, the “Dividend
Rate”; each such dividend on the Series A Preferred Stock, a “Regular Dividend”
and, collectively, the “Regular Dividends”), and (ii) on an as-converted basis,
any dividend or other distribution, whether paid in cash, in-kind or in other
property (including, for the avoidance of doubt, any securities), authorized and
declared by the Board of Directors on the issued and outstanding shares of
Common Stock in an amount determined by assuming that the number of shares of
Common Stock into which such share of such Series A Preferred Stock could be
converted pursuant to Section (C) of Article VII on the applicable Record Date
for such dividend or distribution on the Common Stock were issued to, and held
by, the Holder of such share of Series A Preferred Stock on such Record Date
(each such dividend on the Series A Preferred Stock pursuant to this clause
(ii), a “Participating Dividend” and, collectively, the “Participating
Dividends” and, together with the Regular Dividends, the “Dividends”). For
purposes of this Certificate of Designation, the term “Stated Value” shall mean
$1,000.00 per share of Series A Preferred Stock, as adjusted pursuant to
Sections (C) and (D) of this Article IV, as applicable.

B.     Regular Dividends shall be payable quarterly in arrears, if, as and when
authorized and declared by the Board of Directors, or any duly authorized
committee thereof, to the extent not prohibited by law, on March 31, June 30,
September 30 and December 31 of each year (unless any such day is not a Business
Day, in which event such Regular Dividends shall be payable on the next
succeeding Business Day, without accrual of interest thereon to the actual
payment date), commencing on [•], 20192 (each such payment date, a “Regular
Dividend Payment Date,” and the period from, and including, the Issue Date to,
and including, the first Regular Dividend Payment Date and each such quarterly
period thereafter from, but excluding, the immediately preceding Regular
Dividend Payment Date to, and including, the next occurring Regular Dividend
Payment Date, a “Regular Dividend Period”). The amount of Regular Dividends
payable in respect of each share of Series A Preferred Stock for any period
shall be computed on the basis of a 360-day year consisting of twelve thirty-day
months. Regular Dividends shall begin to accrue from the Issue Date whether or
not declared and whether or not the Corporation has assets legally available to
make payment thereof, at a rate equal to the applicable Dividend Rate and, if
not declared and paid, shall be cumulative, regardless of whether or not in any
Regular Dividend Period there are funds of the Corporation legally available for
the payment of such Regular Dividend. In the event that the Board of Directors
has authorized the payment of any

 

 

2 Note to Draft: First Regular Dividend Payment Date following the Issue Date.

 

3

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Regular Dividend, the Corporation may, in its sole discretion and
notwithstanding anything to the contrary in this Certificate of Designation,
settle such Regular Dividend in cash out of funds legally available therefor,
in-kind pursuant to the terms and conditions of Section (C) of this Article IV,
or a combination of cash and in-kind settlement pursuant to the terms and
conditions of Section (D) of this Article IV, and the Corporation shall set
aside sufficient funds for the portion of any Regular Dividend to be paid in
whole or in part in cash before the Board of Directors or any other authorized
Person may declare, set apart funds for or pay any dividend on the Junior Stock;
provided, however, that, to the extent any such payment in cash is prohibited by
the Specified Contract Terms, such payment will be made in-kind in accordance
with the terms and conditions of Section (C) of this Article IV. Participating
Dividends shall be payable as and when paid to the holders of shares of Common
Stock (each such date, a “Participating Dividend Payment Date” and, together
with a Regular Dividend Payment Date, a “Dividend Payment Date”). Participating
Dividends are payable on a cumulative basis once declared, regardless of whether
or not there are then funds of the Corporation available for the payment of such
Participating Dividend pursuant to law or Specified Contract Terms.

C.     With respect to each share of Series A Preferred Stock, any Regular
Dividend or portion thereof in respect of such share of Series A Preferred Stock
that has accrued during any applicable Regular Dividend Period but is not paid
(in whole or in part) in cash on the applicable Regular Dividend Payment Date
(the amount of any accrued and unpaid Regular Dividend with respect to any share
of Series A Preferred Stock for any Regular Dividend Period, regardless of
whether such Regular Dividend is paid in cash or kind, the “Accrued Dividend
Amount” with respect to such share of Series A Preferred Stock for such Regular
Dividend Period) shall, regardless of whether or not such Regular Dividend is
authorized and declared by the Board of Directors, or whether the Corporation
has assets legally available to make payment thereof, be added to the Stated
Value of such share of Series A Preferred Stock immediately following the Close
of Business on such Regular Dividend Payment Date. Any such addition of the
Accrued Dividend Amount in respect of a share of Series A Preferred Stock to the
Stated Value of such share of Series A Preferred Stock pursuant to this Section
(C) of Article IV is referred to herein as a “PIK Dividend.” The Accrued
Dividend Amount in respect of any Regular Dividend Period that is not paid (in
whole or in part) in cash shall, without duplication of any prior PIK Dividends
(if any) only be added to the Stated Value of such share of Series A Preferred
Stock once. Regular Dividends with respect to each share of Series A Preferred
Stock shall continue, from and after the date of each PIK Dividend, if any, to
accrue in an amount per annum equal to the Dividend Rate (as such amount per
annum may be adjusted pursuant to the terms and conditions hereof) of the Stated
Value of such share of Series A Preferred Stock as of the relevant Record Date.
Notwithstanding anything to the contrary in this Certificate of Designation, the
Corporation will not be permitted to make any PIK Dividend election to the
extent such election would violate the listing standards of the Principal Stock
Exchange; provided, however, that nothing herein will affect the compounding of
any Regular Dividend that the Corporation does not pay in cash (which
compounding will apply even if the Corporation is otherwise prohibited from
electing to make any PIK Dividend pursuant to this sentence).

 

4

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D.     In the event that the Board of Directors has authorized and declared the
payment of a Regular Dividend and the settlement of such Regular Dividend
payment in part by payment of cash to each Holder of shares of Series A
Preferred Stock and in part pursuant to a PIK Dividend (any such Regular
Dividend, a “Cash and PIK Dividend”), the Corporation shall, on the applicable
Regular Dividend Payment Date and in respect of each share of Series A Preferred
Stock, (i) pay to the Holder thereof an amount of cash equal to the Cash and PIK
Dividend Cash Settlement Amount in respect of such share of Series A Preferred
Stock, and (ii) add to the Stated Value of such share of Series A Preferred
Stock an amount equal to (A) the Accrued Dividend Amount with respect to such
share of Series A Preferred Stock for the Regular Dividend Period ending on, and
including, such Regular Dividend Payment Date, minus (B) the Cash and PIK
Dividend Cash Settlement Amount in respect of such share of Series A Preferred
Stock. If the Board of Directors declares a Cash and PIK Dividend, and any
portion of the cash payment of such Cash and PIK Dividend per share of Series A
Preferred Stock is not paid pursuant to the terms of this Article IV, then such
portion shall be added to the Stated Value of such share of Series A Preferred
Stock in accordance with the terms of this Section (D) of Article IV.

E.     In the event that the Board of Directors has authorized and declared the
payment of a Participating Dividend, such Participating Dividend shall be paid
in a manner consistent with the payments of dividends on the shares of Common
Stock. The Corporation will not declare any dividend or distribution on the
Common Stock unless, concurrently therewith, the Corporation declares a
corresponding Participating Dividend in accordance with Section (A) of this
Article IV.

F.     Except as otherwise provided herein, if at any time the Corporation pays,
in cash, less than the total amount of Dividends then accrued, but unpaid, with
respect to the shares of Series A Preferred Stock, such cash payment shall be
distributed pro rata among the Holders thereof based upon the Stated Value of
all shares of Series A Preferred Stock held by each such Holder as of the Record
Date for such payment. When Dividends are not paid in full upon the Series A
Preferred Stock, all dividends declared on Series A Preferred Stock and any
other class or series of Parity Stock shall be paid pro rata so that the amount
of dividends so declared on the shares of Series A Preferred Stock and each such
other class or series of Parity Stock shall in all cases bear to each other the
same ratio as accrued, but unpaid, Dividends (for the full amount of dividends
that would be payable for the most recently completed Regular Dividend Period if
dividends were declared in full on non-cumulative Parity Stock) on the Series A
Preferred Stock and such other class or series of Parity Stock bear to each
other.

G.     Within one Business Day of the Record Date for any Regular Dividend, the
Corporation will send written notice to each Holder of shares of Series A
Preferred Stock stating (i) whether such Regular Dividend will be paid in cash,
by increasing the Stated Value of each share of Series A Preferred Stock
pursuant to Section (C) of this Article IV, or pursuant to a Cash and PIK
Dividend pursuant to Section (D) of this Article IV, and (ii) if such Regular
Dividend will be paid, at least in part, by increasing the Stated Value of a
share of Series A Preferred Stock pursuant to Section (C) of this Article IV or
pursuant to a Cash and PIK Dividend pursuant to Section (D) of this Article IV,
the Stated Value of each share of Series A Preferred Stock immediately before
and immediately after the applicable increase. If the Corporation fails to send
such written notice at or before the Close of Business on the Business Day
immediately following the Record Date for any Regular Dividend, then the
Corporation will be deemed to have irrevocably elected to pay such Regular
Dividend solely by increasing the Stated Value of each share of Series A
Preferred Stock pursuant to Section (C) of this Article IV.

 

5

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H.     If the quotient obtained by dividing the Year Four Price by the
Announcement Price is (i) eighty percent (80.0%) or greater, but less than one
hundred percent (100%), then, effective from and after the four-year anniversary
of the Issue Date, the Dividend Rate shall be automatically adjusted to 6.50%
per annum, or (ii) less than eighty percent (80%), then, effective from and
after the four-year anniversary of the Issue Date, the Dividend Rate shall be
automatically adjusted to 8.00% per annum; provided, however, that, if the
quotient obtained by dividing the Year Four Price by the Announcement Price is
equal to or greater than the quotient obtained by dividing the S&P Year Four
Price by the S&P Announcement Price, then (x) no adjustment to the Dividend Rate
shall be made on the four-year anniversary of the Issue Date, and (y) in lieu of
such adjustment, if, on the five-year anniversary of the Issue Date, the
quotient obtained by dividing the Year Five Price by the Announcement Price is
(I) eighty percent (80.0%) or greater, but less than one hundred percent (100%),
then, effective from and after the five-year anniversary of the Issue Date, the
Dividend Rate shall be automatically adjusted to 6.50% per annum, or (II) less
than eighty percent (80%), then, effective from and after the five-year
anniversary of the Issue Date, the Dividend Rate shall be automatically adjusted
to 8.00% per annum. For the avoidance of doubt, in the event that the Year Four
Price or Year Five Price, as applicable, is equal to or in excess of the
Announcement Price, no adjustment or modification to the Dividend Rate shall be
made hereunder. Except as set forth in this Section (H) of Article IV, the
Dividend Rate shall not be subject to any adjustment or modification hereunder.

I.     Subject to the terms and conditions of Articles VII and VIII, for so long
as any share of Series A Preferred Stock remains issued and outstanding, from
and after the time, if any, that the Corporation shall have failed to satisfy
any accrued, but unpaid, Regular Dividend for all prior Regular Dividend Periods
in accordance with the terms and conditions of this Article IV or failed to pay
or distribute, as applicable, any unpaid Participating Dividend in accordance
with the terms and conditions of this Article IV, no dividend shall be declared,
paid or set apart for payment, and no other distribution declared or made, upon
any Junior Stock, nor shall any Junior Stock be redeemed, purchased or otherwise
acquired for any consideration (nor shall any moneys be paid to or made
available for a sinking fund for the redemption or other purchase of any such
Junior Stock) by the Corporation, directly or indirectly, until (i) the unpaid
Accrued Dividend Amount for all prior Regular Dividend Periods, together with
the amount of all unpaid Participating Dividends, if any, with respect to each
share of Series A Preferred Stock shall have been paid in full, or (ii) all such
Dividends have been or contemporaneously are declared and a sum sufficient for
the payment of such Accrued Dividend Amount together with any unpaid
Participating Dividend with respect to each share of Series A Preferred Stock
has been or is set aside for the benefit of the Holders, in each case without
the prior written consent of the Majority Holders; provided, however, that the
foregoing limitation shall not apply to:

 

 

1.

purchases, redemptions or other acquisitions of shares of Junior Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors, managers or consultants of or to the Corporation or any of its
Subsidiaries;

 

6

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2.

an exchange, redemption, reclassification or conversion of any class or series
of Junior Stock solely for any other class or series of Junior Stock (and cash
payments in lieu of issuing fractional shares of such Junior Stock);

 

 

3.

any dividend in the form of shares, warrants, options or other rights where the
dividended shares or the shares issuable upon exercise of such warrants, options
or other rights are the same shares as those on which the dividend is being paid
or ranks equal or junior to such shares;

 

 

4.

any distribution, to holders of Junior Stock, of Junior Stock or rights to
purchase Junior Stock; or

 

 

5.

any dividend in connection with the implementation of a bona fide stockholder
rights or similar plan, or a redemption or repurchase of any Junior Stock
pursuant to any such stockholder rights or similar plan.

ARTICLE V

LIQUIDATION, DISSOLUTION OR WINDING UP

A.     Upon any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation (each, a “Liquidation Event”), after
satisfaction of all liabilities and obligations to creditors of the Corporation,
subject to the rights of any class or series of Senior Stock and before any
distribution or payment shall be made to any holder of any Junior Stock, and
subject to Section (C) of this Article V, each Holder shall be entitled to
receive, out of the assets of the Corporation or proceeds thereof (whether
capital or surplus) legally available therefor, an amount per share of Series A
Preferred Stock equal to the greater of:

 

 

1.

the sum of (a) the Stated Value with respect to such share, plus (b) any unpaid
Participating Dividend as of the date of the liquidating payment, plus
(c) without duplication of any accrued and unpaid Regular Dividends previously
added to the Stated Value of such share of Series A Preferred Stock, all accrued
and unpaid Regular Dividends with respect to such share through, but excluding,
the date of the liquidating payment; and

 

 

2.

the amount that such Holder would have received had such Holder, as of the
commencement of such Liquidation Event, converted each share of Series A
Preferred Stock held by such Holder into Conversion Shares (as defined below)
pursuant to Section (C) of Article VII using the then-applicable Conversion
Price (the greater of the applicable amounts referred to in Sections (A)(1) and
(A)(2) of this Article V, the “Liquidation Preference”).

 

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B.     No Holder shall (i) be entitled to any payment in respect of its shares
of Series A Preferred Stock in the event of any Liquidation Event other than
payment of the Liquidation Preference expressly provided for in Section (A) of
this Article V, or (ii) have any further right or claim to any of the
Corporation’s remaining assets, including any right or claim to participate in
the receipt of any payment on Junior Stock in connection therewith (except as
provided in Section (A)(2) of this Article V).

C.     If, in connection with any liquidating distribution pursuant to Section
(A) of this Article V, the assets of the Corporation or proceeds thereof are not
sufficient to pay in full the applicable Liquidation Preference payable on the
shares of Series A Preferred Stock and the corresponding liquidating
distributions payable on the shares of Parity Stock, if any, then such assets,
or the proceeds thereof, shall be paid pro rata in accordance with the full
respective aggregate liquidating distributions that would be payable on all such
shares if all amounts payable thereon were paid in full.

D.     For purposes of this Article V, the (i) merger, consolidation, exchange,
amalgamation or combination of the Corporation with or into any other entity,
(ii) merger, consolidation, exchange, amalgamation or combination of any other
entity with or into the Corporation, or (iii) sale, conveyance, lease or other
disposition of all or substantially all of the assets of the Corporation, in
each case, shall not constitute a Liquidation Event.

ARTICLE VI

VOTING RIGHTS

A.     Except as otherwise required by law, (i) each Holder shall be entitled to
a number of votes equal to the largest number of whole shares of Common Stock
into which all shares of Series A Preferred Stock held of record by such Holder
could then be converted pursuant to Section (C) of Article VII as of the Record
Date for the determination of stockholders entitled to vote or consent on the
applicable matter(s) or, if no such Record Date is established, at the date such
vote or consent is taken or any written consent of such stockholders is first
executed, (ii) except as otherwise provided in this Article VI and subject to
the requirements of applicable law, the Holders shall be entitled to vote as a
single class together with the holders of shares of Common Stock (and, to the
extent applicable, with the holders of any other class or series of Capital
Stock of the Corporation) on all matters submitted for a vote of or consent by
holders of shares of Common Stock (subject to that certain Stockholders’
Agreement, to be entered into as of the Issue Date, by and between the
Corporation, Green Equity Investors VII, L.P., a Delaware limited partnership,
and Green Equity Investors Side VII, L.P., a Delaware limited partnership (as
may be amended from time to time, the “Stockholders’ Agreement”) with respect to
the election of directors), (iii) each Holder shall be entitled to notice of all
meetings of the holders of shares of Common Stock (or of any proposed action by
written consent of such holders) in accordance with the Bylaws as if the Holders
were holders of shares of Common Stock, and (iv) so long as the Majority
Approved Holders have the right to designate a director for nomination pursuant
to Section 1.1(b) of the Stockholders’ Agreement, the Holders shall be entitled
to vote as a single class on the election of such director as provided in
Section (C) of this Article VI.

 

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B.     For so long as any share of Series A Preferred Stock remains issued and
outstanding, the Corporation shall not, without first obtaining the written
consent of the Majority Holders or the affirmative vote of the Majority Holders
at a meeting of all Holders called for that purpose, take any of the following
actions:

 

 

1.

any change, amendment, alteration or repeal (including as a result of a merger,
consolidation, exchange, amalgamation, combination, or other similar or
extraordinary transaction) of any provision of the Charter or the Bylaws that
would have an adverse effect on the rights, preferences, privileges or voting
powers of the shares of Series A Preferred Stock;

 

 

2.

any change, amendment, alteration or repeal (including as a result of a merger,
consolidation, exchange, amalgamation, combination, or other similar or
extraordinary transaction) of any provision of the Charter, or any other action,
in each case to authorize (or increase the number of authorized shares of),
create, classify, reclassify or issue any Parity Stock (or any additional shares
of Series A Preferred Stock) or Senior Stock; provided, however, that, effective
as of such time there are fewer than 100,000 shares of Series A Preferred Stock
issued and outstanding, the approval right of the Majority Holders pursuant to
this Section (B)(2) of Article VI shall automatically terminate and be of no
further force or effect without the requirement of any additional action by any
Holder or the Corporation; or

 

 

3.

cause the Corporation and its Subsidiaries to incur any Indebtedness to the
extent such incurrence would cause the Corporation’s Total Leverage Ratio for
any applicable Test Period to exceed 6:00:1:00 determined on a Pro-Forma Basis
(as the terms “Indebtedness,” “Total Leverage Ratio,” “Test Period,” “Pro-Forma
Basis” and all related and constituent defined terms, including “Consolidated
Total Debt” and “Consolidated EBITDA,” are defined in the Credit Agreement).

Upon the first date that all shares of Series A Preferred Stock cease to be
issued and outstanding, the provisions set forth in the foregoing Sections
(B)(1) through (B)(3) of this Article VI shall (unless terminated earlier in
accordance with the terms and conditions of any such provision) automatically
terminate and be of no further force or effect without the requirement of any
additional action by any of the Holders or the Corporation.

C.     For so long as the Majority Approved Holders have the right to designate
a director for nomination pursuant to Section 1.1(b) of the Stockholders’
Agreement, the Majority Holders shall have the right to elect and appoint one
member of the Board of Directors at any meeting of stockholders of the
Corporation at which directors are to be elected or appointed, except such
meetings for the purpose of filling vacancies or newly created directorships
(other than for the purpose of filling a vacancy or newly created directorship
to be filled by the person to be

 

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elected by the Majority Holders), voting as a separate class from the holders of
shares of Common Stock (and, to the extent applicable, as a separate class from
the holders of any other class or series of Capital Stock of the Corporation) or
by execution of a written consent in lieu of such vote. Any Person elected or
appointed pursuant to this Article VI shall, at all times, serve a one-year term
and shall not be designated as a member of any class of directors of the
Corporation (it being acknowledged and agreed that such Person (or such Person’s
designated successor in accordance with the Stockholders’ Agreement and Section
(D) of this Article VI) shall be a nominee for election at the Corporation’s
2019 annual meeting of stockholders of the Corporation and each subsequent
meeting of stockholders of the Corporation at which directors are to be elected
or appointed, except such meetings for the purpose of filling vacancies or newly
created directorships (other than a vacancy to be filled by the person to be
elected by the Majority Holders)).

D.     In the event of the death, resignation, retirement, disqualification,
disability or removal of a director elected or appointed by the Majority
Holders, the Majority Holders may, to the extent the Majority Approved Holders
have the right to designate a director for nomination pursuant to Section 1.1(b)
of the Stockholders’ Agreement at such time, elect or appoint a replacement
designee to fill the resulting vacancy; provided that, if a director elected by
the Majority Holders is removed for cause, the replacement designee shall not be
the same person who was so removed. Other than for cause, a director elected or
appointed by the Majority Holders may not be removed by the Board of Directors
or the stockholders of the Corporation without the prior written consent of the
Majority Holders.

E.     For purposes of clarification, any right of election, designation or
appointment hereunder by the Majority Holders, as of any time of determination,
shall mean a right of election, designation or appointment of such Holders at
such time of determination as determined by the written consent, or affirmative
vote at a meeting called for that purpose, of the Majority Holders.

F.     For so long as any share of Series A Preferred Stock remains issued and
outstanding, the Holders shall be entitled to vote as a single class on any
amendment to this Certificate of Designation that relates solely to the terms of
the Series A Preferred Stock and holders of shares of Common Stock shall not be
entitled to vote thereon.

G.     For so long as any share of Series A Preferred Stock remains issued and
outstanding, any action required or permitted to be taken by the Holders of
shares of Series A Preferred Stock may be effected without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the Majority Holders and shall be
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the books in which proceedings of meetings of
holders of any other class or series of Capital Stock of the Corporation are
recorded.

 

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ARTICLE VII

CONVERSION

A.     Mandatory Conversion Right of the Corporation. Subject to the terms and
conditions of this Article VII (including the conversion procedures set forth in
Section (D) of this Article VII), at any time after the third anniversary of the
Issue Date, if the 30-Day VWAP, measured as of the date that the Corporation’s
Notice of Mandatory Conversion is sent pursuant to Section (B) of this
Article VII, exceeds 150% of the Conversion Price, the Corporation shall have
the right (but not the obligation) to convert (a “Mandatory Conversion”) all
(and not less than all) of the then-issued-and-outstanding shares of Series A
Preferred Stock into shares of Common Stock (the date selected by the
Corporation for any Mandatory Conversion pursuant to this Section (A) of
Article VII, the “Mandatory Conversion Date” and the foregoing right of the
Corporation, the “Mandatory Conversion Right”). In the case of a Mandatory
Conversion, each Holder shall be entitled to receive, in respect of all of such
Holder’s shares of Series A Preferred Stock (the number of such shares, a
Holder’s “Mandatory Converting Amount”), (i) a number of whole shares of Common
Stock equal to the product of (A) such Holder’s Mandatory Converting Amount,
multiplied by (B) the quotient of (1) the sum of (x) the Stated Value of one
share of Series A Preferred Stock as of the Mandatory Conversion Date, plus
(y) the aggregate amount of unpaid Participating Dividends, if any, with respect
to one share of Series A Preferred Stock, as of the Mandatory Conversion Date,
plus (z) without duplication of all accrued and unpaid Regular Dividends
previously added to the Stated Value of such share of Series A Preferred Stock,
all accrued and unpaid Regular Dividends per share of Series A Preferred Stock
through, but excluding, the Mandatory Conversion Date, divided by (2) the
Conversion Price as of the Mandatory Conversion Date, and (ii) cash in lieu of
any fractional share of Common Stock otherwise due (but for the requirement to
deliver only whole shares) under clause (i), determined in accordance with
Section (H) of Article IX; provided, however, that, if the Mandatory Conversion
Date occurs on or after the Record Date for a Dividend and on or before the
immediately following Dividend Payment Date and Dividends have been declared for
such Dividend Payment Date, then (aa) on such Dividend Payment Date, such
Dividend will be paid to the Holder of each share of Series A Preferred Stock as
of the Close of Business on the applicable Record Date for such Dividend,
notwithstanding the Corporation’s exercise of its Mandatory Conversion Right,
and (bb) the amount of such Dividend, if a Regular Dividend, will not be
included in the Stated Value referred to in clause (i)(B)(1)(x) above or added
pursuant to clause (i)(B)(1)(z) above; provided, further, that the Corporation
will in no event fix a Mandatory Conversion Date that is on or after the Record
Date for a Dividend and on or before the immediately following Dividend Payment
Date unless the Board shall have authorized and declared such Dividend and the
Corporation shall have set aside the full amount of such Dividend due on such
Dividend Payment Date.

B.     Mandatory Conversion Process. If the Corporation elects to effect a
Mandatory Conversion, the Corporation shall provide written notice of the
Mandatory Conversion to each Holder of shares of Series A Preferred Stock (such
notice, a “Notice of Mandatory Conversion”). The Mandatory Conversion Date
selected by the Corporation shall be at least five (5) Business Days and not
more than fifteen (15) Business Days after the date on which the Corporation
provides the Notice of Mandatory Conversion to each such Holder pursuant to this
Section (B) of Article VII. The Notice of Mandatory Conversion shall state, as

 

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appropriate: (i) the Mandatory Conversion Date selected by the Corporation;
(ii) the Conversion Price as in effect on the date of the Notice of Mandatory
Conversion; (iii) the number of shares of Common Stock to be issued (and the
amount of cash to be paid in lieu of any fractional share) to such Holder upon
conversion of the shares of Series A Preferred Stock held by such Holder,
calculated in accordance with the Conversion Price referred to in the
immediately preceding clause (ii); and (iv) to the extent applicable pursuant to
the first proviso in Section (A) of this Article VII, the amount of Dividends to
be paid to such Holder on the next Dividend Payment Date. Notwithstanding
anything to the contrary in this Article VII, the Corporation may not issue a
Notice of Mandatory Conversion or effect a Mandatory Conversion or settle any
such conversion unless the Liquidity Conditions are satisfied, as of the date
such notice is sent, as of the related Mandatory Conversion Date and as of the
date the Mandatory Conversion is settled, with respect to the shares of Common
Stock to be issued in connection therewith.

C.     Optional Conversion Right of the Holders. Subject to the terms and
conditions of this Article VII (including the conversion procedures set forth in
Section (D) of this Article VII), at any time after the twelve-month anniversary
of the Issue Date (or, if earlier, the date the Corporation sends any Change of
Control Notice), each Holder of shares of Series A Preferred Stock shall have
the right, at such Holder’s option, to convert any or all of such Holder’s
shares of Series A Preferred Stock (a Holder’s “Optional Conversion Right”), and
the total number of shares of Series A Preferred Stock subject to a Holder’s
exercise of its Optional Conversion Right (such number, a Holder’s “Optional
Converting Amount”) shall be converted into (i) a number of whole shares of
Common Stock equal to the product of (A) such Holder’s Optional Converting
Amount, multiplied by (B) the quotient of (1) the sum of (x) the Stated Value of
one share of Series A Preferred Stock as of the related Optional Conversion
Date, plus (y) the aggregate amount of unpaid Participating Dividends, if any,
with respect to one share of Series A Preferred Stock, as of such Optional
Conversion Date, plus (z) without duplication of any accrued and unpaid Regular
Dividends previously added to the Stated Value of such share of Series A
Preferred Stock, all accrued and unpaid Regular Dividends per share of Series A
Preferred Stock through, but excluding, such Optional Conversion Date, divided
by (2) the Conversion Price as of such Optional Conversion Date, and (ii) cash
in lieu of any fractional share otherwise due (but for the requirement to
deliver only whole shares) under clause (i), determined in accordance with
Section (H) of Article IX; provided, however, that, if the applicable Optional
Conversion Date for the conversion of any share of Series A Preferred Stock
occurs on or after the Record Date for a Dividend and on or before the
immediately following Dividend Payment Date and Dividends have been declared for
such Dividend Payment Date, then (x) on such Dividend Payment Date, such
Dividend will be paid to the applicable Holder of each share of Series A
Preferred Stock as of the Close of Business on the applicable Record Date for
such Dividend, notwithstanding any such Holder’s exercise of its Optional
Conversion Right, and (y) the amount of such Dividend, if a Regular Dividend,
will not be included in the Stated Value referred to in clause (i)(B)(1)(x)
above or added pursuant to clause (i)(B)(1)(z) above. Notwithstanding anything
to the contrary set forth in this Section (C) of Article VII, in no event shall
a Holder be entitled to exercise its Optional Conversion Right in respect of
fewer than 25,000 shares of Series A Preferred Stock (unless such Holder’s
exercise of its Optional Conversion Right is in respect of all remaining shares
of Series A Preferred Stock held by such Holder).

 

12

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D.     Conversion Procedures. A Holder must comply with each of the following
requirements in order to convert its Optional Converting Amount pursuant to
Section (C) of this Article VII:

 

 

1.

complete and manually sign the conversion notice substantially in the form of
Annex A attached hereto (the “Notice of Conversion”), and deliver such Notice of
Conversion to the Conversion Agent;

 

 

2.

if required, furnish appropriate endorsements and transfer documents in form and
substance reasonably acceptable to the Corporation; and

 

 

3.

if required, pay any share transfer, documentary, stamp or similar taxes not
payable by the Corporation pursuant to the Investment Agreement.

The “Optional Conversion Date” shall mean the date on which a holder complies
with the procedures set forth in this Section (D) of Article VII.

E.     Effect of Conversion. Except to the extent provided in the first proviso
to Section (A) of this Article VII or in the proviso to Section (C) of this
Article VII, effective immediately as of to the Close of Business on the
Mandatory Conversion Date or the Optional Conversion Date, Dividends shall no
longer accrue or be declared on any such shares of Series A Preferred Stock and
such shares of Series A Preferred Stock shall cease to be outstanding.

F.     Record Holder of Securities Underlying a Conversion or Redemption;
Settlement of Conversion Shares. The Holder of shares of Series A Preferred
Stock subject to any exercise of (i) the Corporation’s Mandatory Conversion
Right, (ii) a Holder’s Optional Conversion Right, or (iii) the Corporation
Optional Redemption Right pursuant to Section (A) of Article VIII (to the
extent, if any, that the Corporation shall elect to issue shares of Common Stock
pursuant to such redemption), in each case, entitled to receive the shares of
Common Stock issuable upon such conversion or redemption (such shares of Common
Stock, the “Conversion Shares”) shall be treated for all purposes as the record
holder(s) of such shares of Common Stock as of the Close of Business on the
Mandatory Conversion Date, the Optional Conversion Date or the Corporation
Optional Redemption Date (as defined below), respectively; provided, however,
that such Holder may identify one or more other Persons to receive such
Conversion Shares in connection with any such conversion or redemption in such
Holder’s Notice of Conversion (or, in the case of a Mandatory Conversion, in a
written notice sent to the Corporation no later than the Business Day
immediately following the related Mandatory Conversion Date) or documentation
necessary to consummate such redemption duly submitted to the Conversion Agent
or the Corporation, as applicable. In the case of a conversion, as promptly as
practicable on or after the applicable Optional Conversion Date or Mandatory
Conversion Date (and in no event later than the third Trading Day thereafter),
the Corporation shall issue to such record holder(s) the number of whole
Conversion Shares issuable upon such conversion (and deliver payment of cash in
lieu of any fractional share of Common Stock otherwise due (but for the
requirement to issue only whole shares), as determined in accordance with
Section (H) of

 

13

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Article IX)). In the case of any exercise of the Corporation Optional Redemption
Right (to the extent, if any, that the Corporation shall elect to issue shares
of Common Stock pursuant to such redemption), the related Conversion Shares will
be issued on the related Corporation Optional Redemption Date. Conversion Shares
shall not be certificated and shall be registered in the name of DTC’s nominee
and delivered to the DTC (or the DTC custodian of the Common Stock) or, if
directed otherwise by the applicable Holder, to the account so directed. In the
event that a Holder shall not by written notice comply with any of the
requirements set forth in this Section (F) of Article VII, the Corporation shall
be entitled to register and deliver such Conversion Shares or, as applicable,
cash to and in the name of the Holder in the manner shown in the books and
records of the Corporation.

G.     Status of Converted or Acquired Shares. Without limiting the right of
Holders to receive any Dividend on a Dividend Payment Date pursuant to the first
proviso to Section (A) of this Article VII or the proviso to Section (C) of this
Article VII, (i) shares of Series A Preferred Stock duly converted in accordance
with this Certificate of Designation, or otherwise acquired by the Corporation
in any manner whatsoever, shall be canceled upon the conversion or acquisition
thereof, and (ii) all such shares of Series A Preferred Stock shall upon their
cancelation constitute authorized but unissued shares of Preferred Stock,
without designation or classification as to series, until such shares are once
more designated or classified as part of a particular series by the Board of
Directors pursuant to the provisions of the Charter.

ARTICLE VIII

REDEMPTION

A.     Redemption at the Option of the Corporation. At any time after the fifth
anniversary of the Issue Date, the Corporation shall have the right (but not the
obligation) (the “Corporation Optional Redemption Right”) to redeem all (and not
less than all) of the then-outstanding shares of Series A Preferred Stock, upon
providing the Holders the applicable notice of redemption pursuant to Section
(C) of this Article VIII, at a redemption price per share of Series A Preferred
Stock (payable by the Corporation in cash, whole shares of Common Stock, or a
combination of a cash and whole shares of Common Stock, at the Corporation’s
election) equal to the sum of (i) Stated Value of one share of Series A
Preferred Stock as of the Corporation Optional Redemption Date, plus (ii) the
aggregate amount of unpaid Participating Dividends, if any, with respect to one
share of Series A Preferred Stock as of the Corporation Optional Redemption
Date, plus (z) without duplication of any accrued and unpaid Regular Dividends
previously added to the Stated Value of such share of Series A Preferred Stock,
all accrued and unpaid Regular Dividends per share of Series A Preferred Stock
through, but excluding, the Corporation Optional Redemption Date (the
“Corporation Optional Redemption Price”); provided, however, that, if the
Corporation Optional Redemption Date occurs on or after the Record Date for a
Dividend and on or before the immediately following Dividend Payment Date and
Dividends have been declared for such Dividend Payment Date, then (A) on such
Dividend Payment Date, such Dividend will be paid to the Holder of each share of
Series A Preferred Stock as of the Close of Business on the applicable Record
Date for such Dividend, notwithstanding the Corporation’s exercise of the
Corporation Optional Redemption Right; and (B) the amount of such Dividend, if a
Regular Dividend, will not be included in the Stated Value

 

14

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referred to in the immediately preceding sentence or added pursuant to clause
(ii)(z) of such sentence; provided, further, that the Corporation will in no
event fix a Corporation Optional Redemption Date that is on or after the Record
Date for a Dividend and on or before the immediately following Dividend Payment
Date unless the Board shall have authorized and declared such Dividend and the
Corporation shall have set aside the full amount of such Dividend due on such
Dividend Payment Date. The Corporation Optional Redemption Price shall be paid
to the Holders in the same form(s) of consideration and on a pro rata basis such
that each Holder shall be entitled to receive, with respect to each single share
of Series A Preferred Stock held by such Holder, the same amount of cash, shares
of Common Stock, or combination thereof as each other Holder is entitled to
receive with respect to each share of Series A Preferred Stock held by such
other Holder. In the event that the Corporation elects to settle the payment of
the Corporation Optional Redemption Price to each Holder through delivery of
shares of Common Stock (a “Physical Redemption Settlement”) or a combination of
a cash payment and delivery of shares of Common Stock (a “Combination Redemption
Settlement”), (1) the value of each share of Common Stock issuable pursuant to
such payment shall be equal to the 30-Day VWAP, measured as of the date that the
Corporation provides the Holders the applicable notice of redemption pursuant to
Section (C) of this Article VIII, and (2) the Corporation shall pay to each
Holder cash in lieu of any fractional share of Common Stock otherwise due (but
for the requirement to deliver only whole shares) under this Section (A) of
Article VIII, determined in accordance with Section (H) of Article IX.
Notwithstanding anything to the contrary in this Article VIII, the Corporation
may not exercise the Corporation Optional Redemption Right pursuant to a
Physical Redemption Settlement or a Combination Redemption Settlement, issue any
related notice with respect thereto, or settle any such redemption (I) unless
the Liquidity Conditions are satisfied, as of the date the notice of the related
redemption is sent and as of the Corporation Optional Redemption Date, with
respect to the shares of Common Stock to be issued in connection therewith; and
(II) before the Requisite Stockholder Approval is obtained, if at all, to the
extent the number of Conversion Shares that would thereby be issuable would
exceed the Number of Available Shares as of the date the related notice of
redemption is sent pursuant to Section (C) of this Article VIII.

B.     Mandatory Redemption Upon the Occurrence of a Change of Control.

 

 

1.

In the event of a transaction resulting in a Change of Control, the Corporation
(or its successor) shall be required to redeem, by irrevocable written notice to
the Holders, all of the then-issued-and-outstanding shares of Series A Preferred
Stock held by all Holders. Upon such redemption, the Corporation will pay or
deliver, as applicable, to each Holder in respect of each share of Series A
Preferred Stock held by such Holder, an amount equal to the greater of (a) cash
in an amount equal to the sum of (1) the product of (x) the applicable Mandatory
Redemption Multiplier, multiplied by (y) the Stated Value of one share of Series
A Preferred Stock as of the Mandatory Redemption Date plus the aggregate amount
of unpaid Participating Dividends, if any, with respect to one share of Series A
Preferred Stock as of the Mandatory Redemption Date, plus (2) the aggregate
amount of accrued and unpaid Dividends from the Dividend Payment Date
immediately preceding the Mandatory

 

15

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Redemption Date through, but excluding, the Mandatory Redemption Date, and
(b) the amount of cash and/or other assets such Holder would have received had
such Holder, as of the Close of Business on the Business Day immediately prior
to the effective date of such transaction resulting in a Change of Control,
converted such share of Series A Preferred Stock into Conversion Shares pursuant
to Section (C) of Article VII and participated in such transaction resulting in
such Change of Control as a holder of shares of Common Stock (such greater
amount, the “Mandatory Redemption Price”). No later than the consummation of any
transaction resulting in a Change of Control, the Corporation (or its successor)
shall deliver or cause to be delivered to each Holder the Mandatory Redemption
Price with respect to such Holder’s shares of Series A Preferred Stock;
provided, that, in each case, the Corporation shall only be required to pay the
Mandatory Redemption Price to the extent such payment can be made out of funds
legally available therefor; provided, further, that the Corporation shall only
pay the Mandatory Redemption Price in cash to the extent, and in an aggregate
amount with respect to all shares of Series A Preferred Stock, not prohibited by
the Specified Contract Terms. Notwithstanding anything to the contrary in this
Certificate of Designation (including the terms and conditions of Section (I) of
Article IX), the Corporation will (I) not be permitted to deliver any shares of
Common Stock upon the occurrence of a Change of Control to the extent such
delivery would violate the rules and regulations of the Principal Stock
Exchange, and (II) be required to settle any such amount in cash or other
non-stock assets.

 

 

2.

On or prior to the tenth (10th) Business Day prior to the date on which the
Corporation anticipates consummating a transaction which would result in a
Change of Control (or, if later, promptly after the Corporation shall have
discovered that a transaction resulting in a Change of Control has occurred),
the Corporation shall send written notice (a “Change of Control Notice”) in the
manner set forth in Article XI to the Holders of record of shares of Series A
Preferred Stock, which such Change of Control Notice shall include (a) the date
on which the transaction that would result in a Change of Control is anticipated
to be effected (or, to the extent applicable, the date on which a Schedule TO or
other similar schedule, form or report disclosing the occurrence of a Change of
Control was filed), (b) a description of the material terms and conditions of
such transaction, (c) a statement that all shares of Series A Preferred Stock
shall be redeemed by the Corporation (or its successor) on a date specified in
such Change of Control Notice (the “Mandatory Redemption Date”), which such date
must be a Business Day of the Corporation’s choosing that is no later than the
date of the consummation of the transaction resulting in such

 

16

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Change of Control, (d) the Mandatory Redemption Price with respect to each share
of Series A Preferred Stock, and (e) the procedures that Holders of shares of
Series A Preferred Stock must follow in order for their shares of Series A
Preferred Stock to be redeemed. Any Change of Control Notice mailed or delivered
as provided in this Section (B)(2) of Article VIII shall be conclusively
presumed to have been duly given, whether or not any applicable Holder receives
such notice, but failure to duly give such notice by mail or delivery, or any
defect in such notice or in the mailing or delivery thereof, to any Holder of
shares of Series A Preferred Stock to be redeemed pursuant to this Section
(B) of Article VIII shall not affect the validity of the proceedings for the
redemption of any other share(s) of Series A Preferred Stock to the extent that
such failure to duly give notice or any defect in such notice or the mailing or
delivery thereof (in each case, to the extent such failure or defect is not
promptly cured or corrected) does not materially prejudice any such Holder. The
Holder of shares of Series A Preferred Stock subject to any redemption pursuant
to this Section (B) of Article VIII entitled to receive any securities or other
assets payable upon such redemption pursuant to Section (B)(1)(b) of this
Article VIII shall be treated for all purposes as the record holder of such
securities or assets as of the Close of Business on the Mandatory Redemption
Date; provided, however, that such Holder may identify one or more other Persons
to receive such securities or assets in connection with any such redemption in a
written notice sent to the Corporation no later than three Business Days prior
to the Mandatory Redemption Date.

 

 

3.

If, in connection with a transaction resulting in a Change of Control, the
Corporation or its successor shall not have sufficient funds legally available
under the DGCL to redeem all outstanding shares of Series A Preferred Stock,
then the Corporation shall (a) redeem, pro rata among the Holders, a number of
shares of Series A Preferred Stock equal to the number of shares of Series A
Preferred Stock that can be redeemed with the maximum amount legally available
for the redemption of such shares of Series A Preferred Stock under the DGCL,
and (b) redeem all remaining shares of Series A Preferred Stock not redeemed
because of the foregoing limitations at the applicable Mandatory Redemption
Price as soon as practicable after the Corporation (or its successor) is able to
make such redemption out of assets legally available for the purchase of such
share of Series A Preferred Stock. The inability of the Corporation (or its
successor) to make a redemption payment for any reason shall not relieve the
Corporation (or its successor) from its obligation to effect any required
redemption when, as and if permitted by applicable law.

 

17

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C.     Notice of Redemption. Notice of any redemption of shares of Series A
Preferred Stock pursuant to Section (A) of this Article VIII shall be given
pursuant to Article XI. Such mailing shall be at least thirty (30) days and not
more than sixty (60) days before the date fixed for any such redemption. Any
notice mailed or delivered as provided in this Section (C) of Article VIII shall
be conclusively presumed to have been duly given, whether or not any applicable
Holder receives such notice, but failure to duly give such notice by mail or
delivery, or any defect in such notice or in the mailing or delivery thereof, to
any Holder of shares of Series A Preferred Stock designated for redemption
pursuant to Section (A) of this Article VIII shall not affect the validity of
the proceedings for the redemption of any other share(s) of Series A Preferred
Stock to the extent that such failure to duly give notice or any defect in such
notice or the mailing or delivery thereof (in each case, to the extent such
failure or defect is not promptly cured or corrected) does not materially
prejudice any such Holder. Each notice of redemption given to a holder shall
include: (i) the applicable redemption date in respect of the Corporation’s
exercise of the Corporation Optional Redemption Right (the “Corporation Optional
Redemption Date”); (ii) the number of shares of Series A Preferred Stock to be
redeemed; (iii) with respect to each share of Series A Preferred Stock, the
Corporation Optional Redemption Price; and (iv) the procedures that Holders of
shares of Series A Preferred Stock must follow in order for their shares of
Series A Preferred Stock to be redeemed. For the avoidance of doubt, Holders of
shares of Series A Preferred Stock shall have the right to convert all or a
portion of the Series A Preferred Stock at any time prior to the Corporation
Optional Redemption Date, and any Common Stock resulting from such conversion
shall not be redeemed.

D.     Status of Redeemed Shares. Without limiting the right of any Holder to
receive any Dividend on a Dividend Payment Date pursuant to the provisos set
forth in Section (A) of this Article VIII, (i) shares of Series A Preferred
Stock duly redeemed in accordance with this Certificate of Designation, or
otherwise acquired by the Corporation in any manner whatsoever, shall be
canceled upon the acquisition thereof, and (ii) all such shares of Series A
Preferred Stock shall upon their cancelation constitute authorized but unissued
shares of Preferred Stock, without designation or classification as to series,
until such shares are once more designated or classified as part of a particular
series by the Board of Director pursuant to the provisions of the Charter.

ARTICLE IX

CONVERSION ADJUSTMENTS

A.     Anti-Dilution Adjustments. The Conversion Price will be subject to
adjustment under the following circumstances at any time or from time to time
while any share of Series A Preferred Stock is issued and outstanding:

 

 

1.

If a subdivision or consolidation of the shares of Common Stock or a
reclassification of Common Stock into a greater or lesser number of shares of
Common Stock occurs, then the Conversion Price will be adjusted based on the
following formula:

 

LOGO [g69674711.jpg]

 

18

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where:

 

 

CP0 =

the Conversion Price in effect immediately prior to the Open of Business on the
effective date of such subdivision, consolidation or reclassification;

 

 

CP1 =

the new Conversion Price in effect immediately after the Open of Business on
such effective date;

 

 

OS0 =

the number of shares of Common Stock issued and outstanding immediately prior to
the Open of Business on such effective date, without giving effect to such
subdivision, consolidation or reclassification; and

 

 

OS1 =

the number of shares of Common Stock that would be issued and outstanding
immediately after, and solely as a result of, such subdivision, consolidation or
reclassification.

Any adjustment made pursuant to this Section (A)(1) of Article IX shall be
effective as of the time set forth in the definition of CP1 above. If any such
event is declared but does not occur, the Conversion Price shall be readjusted,
effective as of the date the Corporation announces that such event shall not
occur, to the Conversion Price that would then be in effect if such event had
not been declared.

 

 

2.

If the Corporation or one or more of its Subsidiaries makes a payment in respect
of a tender offer or exchange offer for shares of Common Stock (other than any
such payment (A) made (x) pursuant to an “open market” transaction in compliance
with Rule 10b-18 under the Exchange Act, or (y) in connection with an
“accelerated share repurchase” on customary terms, and (B) that does not
constitute a “tender offer” under the Exchange Act), where the cash and value
(determined in good faith by the Board of Directors as of the time such tender
or exchange offer expires (such time, the “Expiration Time”)) of any other
consideration included in the payment per share of Common Stock purchased
exceeds the Closing Price per share of Common Stock on the Trading Day
immediately after the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer (as it may be amended) (such last
date, the “Expiration Date”), then the Conversion Price will be decreased based
on the following formula:

 

LOGO [g69674722.jpg]

 

 

 

where:

 

19

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CP0 =

the Conversion Price in effect immediately prior to the Expiration Time;

 

 

CP1 =

the new Conversion Price in effect immediately after the Expiration Time;

 

 

AC =

the fair market value (as determined in good faith by the Board of Directors),
as of the Expiration time, of the aggregate value of all cash and any other
consideration paid or payable for such shares of Common Stock in such tender or
exchange offer;

 

 

OS1 =

the number of shares of Common Stock issued and outstanding immediately after
the Expiration Time (excluding all shares of Common Stock accepted for purchase
or exchange in such tender or exchange offer);

 

 

OS0 =

the number of shares of Common Stock issued and outstanding immediately before
the Expiration Time (before giving effect to the purchase of all shares of
Common Stock accepted for purchase or exchange in such tender or exchange
offer); and

 

 

SP =

the Closing Price per share of Common Stock on the Trading Day immediately after
the Expiration Date;

provided, however, that, if the application of such adjustment with respect to
such purchase would result in an increase to the Conversion Price, then no such
adjustment will be made for such purchase. Any adjustment made pursuant to this
Section (A)(2) of Article IX shall become effective as of the time set forth in
the definition of CP1 above. In the event that the Corporation or any of its
Subsidiaries becomes obligated to purchase shares of Common Stock in a
transaction that resulted in an adjustment to the Conversion Price pursuant to
this Section (A)(2) of Article IX but is prevented by applicable law from
effecting such purchase, or such purchase is rescinded, then the Conversion
Price shall be readjusted to be the Conversion Price that would then be in
effect if such adjustment had not been made (and shall be re-adjusted again if
such purchase shall later be permitted to occur).

 

 

3.

If the Corporation shall issue (x) shares of Common Stock or (y) any other
security convertible into or exercisable or exchangeable for shares of Common
Stock, whether immediately, during specified times, upon the satisfaction of any
one or more conditions or otherwise (any such security referred to in this
clause (y), an “Equity-Linked Security”), in each case at an Effective Price per
share of Common Stock that is less than the Conversion Price in effect (before
giving effect to the adjustment required by this Section (A)(3) of Article IX as
of the date of

 

20

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the issuance or sale of such shares or Equity-Linked Securities (such an
issuance or sale, a “Qualified Issuance”), other than an Excluded Issuance,
then, effective as of the Close of Business on such date, the Conversion Price
will be decreased to an amount equal to the Weighted Average Issuance Price. For
these purposes, the “Weighted Average Issuance Price” will be equal to:

 

LOGO [g69674733.jpg]

 

 

 

where:

 

 

CP =

the Conversion Price in effect immediately prior to such Qualified Issuance;

 

 

OS =

the number of shares of Common Stock issued and outstanding immediately before
such Qualified Issuance;

 

 

EP =

the Effective Price per share of Common Stock with respect to such Qualified
Issuance; and

 

 

X =

the sum, without duplication, of (x) the total number of shares of Common Stock
issued in such Qualified Issuance; and (y) the maximum number of shares of
Common Stock underlying such Equity-Linked Securities issued in such Qualified
Issuance;

provided, however, that, if the application of such adjustment with respect to
such Qualified Issuance would result in an increase to the Conversion Price,
then no such adjustment will be made for such Qualified Issuance. Any adjustment
made pursuant to this Section (A)(3) of Article IX shall become effective
immediately after the issuance of such Equity-Linked Securities.

Notwithstanding anything to the contrary in this Section (A)(3) of Article IX,
before the date, if any, when the Requisite Stockholder Approval is obtained,
(x) the Conversion Price will not be adjusted pursuant to this Section (A)(3) of
Article IX to an amount that is less than [•]3 (subject to proportionate
adjustment for stock splits, dividends and combinations and similar
transactions); and (y) the Corporation will not engage in any Qualified Issuance
that would result in the application of the immediately preceding clause
(x) without the approval of the Majority Holders.

 

 

3 

Note to Draft: To be the lowest possible Conversion Price permitted without
requirement for the Corporation to obtain the Requisite Stockholder Approval,
calculated as of close of business on the trading day immediately prior to the
Issue Date.

 

 

21

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B.     Calculation of Adjustments. All adjustments to the Conversion Price shall
be calculated by the Corporation to the nearest $0.0001 (with $0.00005 rounded
upward).

C.     When No Adjustment Required.

 

 

1.

Except as otherwise provided in this Article IX, the Conversion Price will not
be adjusted (a) for the issuance of shares of Common Stock or any securities
convertible into or exchangeable for Common Stock or carrying the right to
purchase any of the foregoing, or (b) for the repurchase of shares of Common
Stock.

 

 

2.

No adjustment of the Conversion Price shall be made as a result of the issuance
of, the distribution of separate certificates representing, the exercise or
redemption of, or the termination or invalidation of, rights pursuant to any
stockholder rights plans.

 

 

3.

Notwithstanding anything to the contrary set forth in this Article IX, no
adjustment to the Conversion Price shall be made:

 

 

(a)

upon the issuance of Conversion Shares;

 

 

(b)

upon the issuance of any share of Common Stock or option or right to purchase,
or other securities convertible into or exchangeable or exercisable for, shares
of Common Stock pursuant to any former, present or future employee, director,
manager or consultant benefit plan or program of or assumed by the Corporation
or any of its Subsidiaries or of any employee or director agreement, arrangement
or program, in each case where such issuance, plan, program, agreement or
arrangement is or has been approved by the Board of Directors or a committee
thereof (including, for the avoidance of doubt, the Corporation’s 2019 Employee
Stock Purchase Plan approved by the holders of shares of Common Stock at the
Corporation’s 2018 annual meeting of the holders of shares of Common Stock);

 

 

(c)

upon the issuance of any share of Common Stock pursuant to the conversion,
exchange or exercise of any Parity Stock or Junior Stock;

 

 

(d)

upon the issuance of any Parity Stock or Junior Stock in connection with any
“business combination” (as defined in the rules and regulations promulgated by
the SEC) or otherwise in connection with bona fide acquisitions of securities or
substantially all of the assets of another Person, business unit, division or
business;

 

22

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(e)

upon the issuance of capital stock of a Subsidiary of the Corporation issued to
the Corporation or any Subsidiary of the Corporation;

 

 

(f)

upon the issuance of securities of a joint venture (provided that no Affiliate
(other than any Subsidiary of the Corporation) of the Corporation acquires any
interest in such securities in connection with such issuance) (any such issuance
referred to in the foregoing clauses (a) – (f), an “Excluded Issuance”); or

 

 

(g)

for a change in the par value of the shares of Common Stock.

D.     Successive Adjustments; Multiple Adjustments. For the avoidance of doubt,
(i) after an adjustment to the Conversion Price under this Article IX, any
subsequent event requiring an adjustment under this Article IX shall cause an
adjustment to such Conversion Price as so adjusted, and (ii) if an event occurs
that would trigger an adjustment to the Conversion Price pursuant to more than
one subsection of Section (A) of this Article IX, such event, to the extent
fully taken into account in a single adjustment, shall not result in multiple
adjustments hereunder; provided, however, that, if more than one subsection of
Section (A) of this Article IX is applicable to a single event, the subsection
shall be applied that produces the largest adjustment.

E.     Other Adjustments. Subject to the applicable listing standards of the
Principal Stock Exchange, the Corporation may, but shall not be required to,
make such decreases to the Conversion Price, in addition to those required by
this Article IX, as the Board of Directors considers to be advisable in order to
avoid or diminish any income tax to any holder of shares of Common Stock
resulting from any dividend or distribution of shares or issuance of rights or
warrants to purchase or subscribe for shares or from any event treated as such
for income tax purposes or for any other reason.

F.     Notice of Adjustments. Subject to the terms and conditions of Section
(B) of this Article IX, the Corporation shall, as soon as reasonably practicable
following the occurrence of an event that requires an adjustment under Section
(A) of this Article IX (or, if the Corporation is not aware of such occurrence,
as soon as reasonably practicable after becoming so aware) or the date the
Corporation makes an adjustment pursuant to Section (E) of this Article IX:

 

 

1.

compute the adjusted applicable Conversion Price in accordance with this
Article IX and prepare and transmit to the Conversion Agent an officer’s
certificate setting forth the applicable Conversion Price, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and

 

 

2.

provide a written notice to the Holders of shares of Series A Preferred Stock
then issued and outstanding of the occurrence of such event and a statement in
reasonable detail setting forth the method by which the adjustment to the
applicable Conversion Price was determined and setting forth the adjusted
applicable Conversion Price.

 

23

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G.     Conversion Agent. The Conversion Agent shall not at any time be under any
duty or responsibility to any Holder of shares of Series A Preferred Stock to
determine whether any fact or event exists or has been approved or authorized
that may require any adjustment of the applicable Conversion Price or with
respect to the nature, extent or calculation of any such adjustment when made,
or with respect to the method employed in making the same. The Conversion Agent
shall be fully authorized and protected in relying on any notice delivered
pursuant to Section (F) of this Article IX and any adjustment contained therein
and the Conversion Agent shall not be deemed to have knowledge of any adjustment
unless and until it has received such notice or certificate. The Conversion
Agent shall not be accountable with respect to the validity or value (or the
kind or amount) of any share of Series A Preferred Stock or any share of Common
Stock, or of any securities or property, that may at the time of any adjustment
or conversion be issued or delivered with respect to any share of Series A
Preferred Stock, and the Conversion Agent makes no representation with respect
thereto. The Conversion Agent, if other than the Corporation, shall not be
responsible for any failure of the Corporation to issue, transfer or deliver any
share of Common Stock pursuant to the conversion of shares of Series A Preferred
Stock or to comply with any of the duties, responsibilities or covenants of the
Corporation contained in this Article IX.

H.     Fractional Shares. The Corporation shall not issue any fractional share
of Common Stock upon conversion or redemption, as applicable, of any share of
Series A Preferred Stock. In lieu of fractional shares otherwise issuable,
Holders of shares of Series A Preferred Stock will be entitled to receive an
amount in cash equal to the product of (i) such fraction of a share of Common
Stock, multiplied by (ii) the 30-Day VWAP, measured as of (A) in the event of
the Corporation’s exercise of its Mandatory Conversion Right pursuant to Section
(A) of Article VII, the date that the Corporation provides the Holders with the
Notice of Mandatory Conversion pursuant to Section (B) of Article VII, (B) in
the event that a Holder has exercised its Optional Conversion Right pursuant to
Section (C) of Article VII, the date that the Corporation receives such Holder’s
Notice of Conversion pursuant to Section (D) of Article VII, or (C) in the event
that the Corporation has exercised the Corporation Optional Conversion Right
pursuant to Section (A) of Article VIII and has selected to settle the payment
of the Corporation Optional Redemption Price pursuant to a Physical Redemption
Settlement or a Combination Redemption Settlement, the date that the Corporation
provides the Holders with notice of such redemption pursuant to Section (C) of
Article VIII, as applicable. In order to determine whether the number of shares
of Common Stock to be delivered to a Holder of shares of Series A Preferred
Stock upon the conversion of such Holder’s shares of Series A Preferred Stock
will include a fractional share (in lieu of which cash would be paid hereunder),
such determination shall be based on the aggregate number of shares of Series A
Preferred Stock of such Holder that are being converted with the same Conversion
Date or Corporation Optional Redemption Date, as applicable.

I.     Reorganization Events.

 

 

1.

If there occurs:

 

24

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(a)

any reclassification, statutory exchange, merger, amalgamation, consolidation or
other similar business combination of the Corporation with or into another
Person, in each case, pursuant to which the Common Stock is changed or converted
into, or exchanged for, or represent solely the right to receive, cash,
securities or other property;

 

 

(b)

any sale, transfer, lease or conveyance to another Person of all or
substantially all the property and assets of the Corporation, in each case
pursuant to which the shares of Common Stock are converted into cash, securities
or other property; or

 

 

(c)

any statutory exchange of securities of the Corporation with another Person
(other than in connection with a merger or amalgamation covered by Section
I(1)(a) of this Article IX) or reclassification, recapitalization or
reorganization of the shares of Common Stock into other securities,

(each of which is referred to as a “Reorganization Event,” with such cash,
securities or other property being referred to as “Reference Property” and the
amount and kind of Reference Property that a holder of one share of Common Stock
would be entitled to receive on account of such Reorganization Event (without
giving effect to any arrangement not to issue or deliver a fractional portion of
any security or other property and without any interest on such Reference
Property or any right to any dividend or distribution on such Reference Property
that has a record date that is prior to the effective time of such
Reorganization Event) being referred to as a “Reference Property Unit”)) then,
effective as of the effective time of such Reorganization Event, without the
requirement of any action by or receipt of any consent from any Holder of shares
of Series A Preferred Stock (but subject to the terms and conditions of Section
(I)(2) of this Article IX), (I) the consideration due upon conversion of any
share of Series A Preferred Stock, or in connection with any Physical Redemption
Settlement, Combination Redemption Settlement, the adjustments to the Conversion
Price, the determination of the amount and kind of Participating Dividends that
Holders of Series A Preferred Stock will be entitled to receive, and the
conditions to any Mandatory Conversion, will each be determined in the same
manner as if each reference to any number of shares of Common Stock in this
Certificate of Designation were instead a reference to the same number of
Reference Property Units; and (II) for purposes of the definition of “Change of
Control,” the “Capital Stock” of the Corporation will be deemed to mean the
common equity, if any, forming part of such Reference Property. For these
purposes, the Closing Price or VWAP of any Reference

 

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Property Unit or portion thereof that does not consist of a class of securities
will be the fair value of such Reference Property Unit or portion thereof, as
applicable, determined in good faith by the Corporation (or, in the case of cash
denominated in U.S. dollars, the face amount thereof).

If such Reorganization Event provides for different treatment of shares of
Common Stock held by Affiliates of the Corporation and non-Affiliates or by the
Person with which the Corporation amalgamated or consolidated or into which the
Corporation merged or which merged into the Corporation or to which such sale or
transfer was made, as the case may be (any such Person, a “Constituent Person”),
or an Affiliate of a Constituent Person, then the composition of the Reference
Property Unit will be determined based on the cash, securities or other property
that were distributed in such Reorganization Event to holders of shares of
Common Stock that are not Constituent Persons or Affiliates of the Corporation
or Constituent Persons. In addition, if the kind or amount of cash, securities
or other property receivable upon a Reorganization Event is not the same for
each share of Common Stock held immediately prior to such Reorganization Event
by a Person other than a Constituent Person or an Affiliate of the Corporation
or a Constituent Person, then for the purpose of this Section (I) of Article IX,
the composition of the Reference Property Unit will be determined based on the
weighted average, as determined by the Corporation in good faith, of the types
and amounts of consideration received by the holders of shares of Common Stock.

 

 

2.

Exchange Property Election. In the event that the holders of shares of Common
Stock have the opportunity to elect the form of consideration to be received in
a Reorganization Event, the Exchange Property that the Holders of shares of
Series A Preferred Stock shall be entitled to receive shall be determined by the
Majority Holders on or before the earlier of (a) the deadline for elections by
holders of shares of Common Stock, and (b) two Business Days before the
anticipated effective date of such Reorganization Event.

 

 

3.

Reorganization Event Notice. The Corporation (or any successor) shall, no less
than ten (10) Business Days prior to the anticipated effective date of any
Reorganization Event, provide written notice to the Holders of shares of Series
A Preferred Stock of such occurrence of such event and of the kind and amount of
the cash, securities or other property that constitutes the Reference Property
Unit. Failure to deliver such notice shall not affect the operation of the
remainder of this Section (I) of Article IX.

 

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4.

Limitation on Reorganization Event Agreements. The Corporation shall not enter
into any agreement with respect to a transaction that, upon consummation, would
constitute a Reorganization Event unless (a) such agreement provides for or does
not interfere with or prevent (as applicable) conversion or other settlement of
all shares of Series A Preferred Stock then-issued-and-outstanding in accordance
with the terms and conditions of Section (I)(1) of this Article IX, and (b) to
the extent that the Corporation is not the surviving entity in such
Reorganization Event or will be dissolved in connection with such Reorganization
Event, proper provision shall be made in the agreement or series of agreements
governing such Reorganization Event for (I) the conversion or other settlement
of all shares of Series A Preferred Stock issued and outstanding as of the
Reorganization Event in accordance with the terms and conditions of Section
(I)(1) of this Article IX, and (II) in the case of a Reorganization Event
described in Section (I)(1)(b) of this Article IX, an exchange of all shares of
Series A Preferred Stock issued and outstanding as of the Reorganization Event
for comparable shares of the Person to whom the Corporation’s assets are
conveyed or transferred, having voting powers, preferences, and relative,
participating, optional or other special rights as nearly equal as possible to
those provided in this Certificate of Designation.

 

 

5.

Change of Control. Nothing in this Section (I) of Article IX will affect the
Corporation’s obligation to redeem the Series A Preferred Stock pursuant to
Section (B) of Article VIII.

J.     Stockholder Rights Plans. If the Corporation distributes any right
pursuant to any stockholder rights plan on or after the Issue Date, then such
distribution will not require a Participating Dividend except to the extent
provided in the immediately following sentence. If any share of Common Stock is
issued upon conversion of any share of Series A Preferred Stock and, at the time
of such conversion, the Corporation has in effect a stockholder rights plan,
then the Holder of such shares of Series A Preferred Stock will be entitled to
receive or have the benefit of, in addition to, and concurrently with the
delivery of, the consideration otherwise payable under this Certificate of
Designation upon such conversion, the rights set forth in such stockholder
rights plan.

ARTICLE X

RESERVATION OF SHARES

The Corporation shall, at all times when any share of Series A Preferred Stock
is issued and outstanding, reserve and keep available, free from preemptive
rights, for issuance upon the conversion of shares of Series A Preferred Stock,
such number of its authorized but unissued shares of Common Stock as will from
time to time be sufficient to permit the conversion of all then issued and
outstanding shares of Series A Preferred Stock. Prior to the delivery of any
securities that the

 

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Corporation shall be obligated to deliver upon conversion or redemption of the
shares of Series A Preferred Stock, the Corporation shall comply with all
applicable laws and regulations that require action to be taken by the
Corporation to authorize, permit or cause such delivery. Each share of Common
Stock, when issued upon conversion or redemption of any share of Series A
Preferred Stock, will be duly authorized, validly issued, fully paid and
non-assessable and will be listed on each stock exchange, if any, on which the
shares of Common Stock are then listed.

ARTICLE XI

NOTICES

Except as otherwise expressly provided herein, any and all notices or other
communications or deliveries hereunder shall be in writing and shall be deemed
given and effective on the earliest of (i) the Business Day following the date
of mailing, if sent by nationally recognized overnight courier service, (ii) the
date of actual receipt by the party to whom such notice is given, and (iii) five
(5) days following the date of mailing if sent by registered or certified mail,
return receipt requested to the address of the recipient set forth in this
Article XI or, if not so set forth, as otherwise reflected in the Corporation’s
records. The addresses for such communications shall be: (A) if to the
Corporation, to: Catalent, Inc., 14 Schoolhouse Road, Somerset, NJ 08873,
Attention: General Counsel (email: GenCouns@Catalent.com), or (B) if to a Holder
of shares of Series A Preferred Stock, to the address appearing on the
Corporation’s shareholder records or such other address as such holder may
provide to the Corporation in accordance with this Article XI. The address for
the initial Holders of the shares of Series A Preferred Stock on the Issue Date
is c/o Leonard Green & Partners, L.P., 11111 Santa Monica Blvd., #2000, Los
Angeles, CA 90025, Attention Peter Zippelius (email:
pzippelius@leonardgreen.com). Notwithstanding the foregoing, if the shares of
Series A Preferred Stock are issued in book-entry form through DTC or any
similar facility, any such notice may be given to a Holder of the Series A
Preferred Stock in any manner permitted by such facility.

ARTICLE XII

CERTAIN DEFINITIONS

As used in this Certificate of Designation, the following terms shall have the
following meanings, unless the context otherwise requires:

“30-Day VWAP” per share of Common Stock, measured as of any date of
determination, shall mean the arithmetic average of the VWAP per share of Common
Stock for each of the thirty (30) consecutive VWAP Trading Days ending on, and
including, the VWAP Trading Day immediately preceding such date of
determination.

“60-Day VWAP” per share of Common Stock, measured as of any date of
determination, shall mean the arithmetic average of the VWAP per share of Common
Stock for each of the sixty (60) consecutive VWAP Trading Days ending on, and
including, the VWAP Trading Day immediately preceding such date of
determination.

“Accrued Dividend Amount” shall have the meaning ascribed to it in Section
(C) of Article IV.

 

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“Affiliate” shall have the meaning ascribed to it in Rule 144(a) under the
Securities Act.

“Announcement Date” shall mean the day on which the execution of the Merger
Agreement is first publicly announced.

“Announcement Price” shall mean $41.2841 per share of Common Stock.

“Beneficially Own” shall mean “beneficially own” as defined in Rule 13d-3 under
the Exchange Act.

“Board of Directors” shall have the meaning ascribed to it in the recitals.

“Business Day” shall mean a day that is a Monday, Tuesday, Wednesday, Thursday
or Friday and is not a day on which banking institutions in New York, New York,
generally are authorized or obligated by law, regulation or executive order to
close.

“Buyer” shall mean Catalent Pharma Solutions, Inc., a Delaware corporation.

“Bylaws” shall mean the Bylaws of the Corporation as in effect on any date of
determination.

“Capital Stock” shall mean any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) shares issued by the Corporation, including the Common
Stock and the Corporation’s preferred stock, par value $0.01 per share.

“Cash and PIK Dividend” shall have the meaning ascribed to it in Section (D) of
Article IV.

“Cash and PIK Dividend Aggregate Cash Amount” shall mean, with respect to any
Cash and PIK Dividend authorized and declared by the Board of Directors (or any
duly authorized committee thereof), the aggregate amount of cash authorized and
declared to be paid to the Holders in respect of all issued and outstanding
shares of Series A Preferred Stock as of the Record Date for such Cash and PIK
Dividend.

“Cash and PIK Dividend Cash Settlement Amount” shall mean, with respect to each
share of Series A Preferred Stock, an amount equal to the quotient of (A) the
Cash and PIK Dividend Aggregate Cash Amount, divided by (B) the aggregate number
of shares of Series A Preferred Stock issued and outstanding as of the Record
Date for the applicable Cash and PIK Dividend.

“Certificate of Designation” shall mean this Certificate of Designation of
Rights, Preferences and Limitations of the Series A Preferred Stock.

 

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“Change of Control” shall mean the occurrence of any of the following:

A.     the Corporation becomes aware (by way of a report or any other filing
pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or
otherwise) of the acquisition by any Person or Group, including any Group acting
for the purpose of acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), in a single transaction or
a series of related transactions, by way of merger, consolidation or other
business combination or purchase of beneficial ownership (as defined below) of
more than fifty percent (50.0%) of the voting power of all of the Corporation’s
then-outstanding common equity (directly or through the acquisition of voting
power of the common equity of any of the Corporation’s direct or indirect parent
entities); or

B.     the consummation of (1) any sale, lease or other transfer, in one
transaction or a series of transactions, of all or substantially all of the
assets of the Corporation and its Subsidiaries, taken as a whole, to any Person,
or (2) any transaction or series of related transactions in connection with
which (whether by means of merger, consolidation, share exchange, combination,
reclassification, recapitalization, acquisition, liquidation or otherwise) all
of the Common Stock is exchanged for, converted into, acquired for, or
constitutes solely the right to receive, other securities, cash or other
property;

provided, however, that (a) any transaction in which the Corporation or any
direct or indirect parent entity of the Corporation becomes a Subsidiary of
another Person, or any transaction described in clause (B)(2) above, shall not
constitute a Change of Control if the Persons beneficially owning all of the
voting power of the common equity of the Corporation or such parent entity
immediately prior to such transaction beneficially own, directly or indirectly
through one or more intermediaries, more than fifty percent (50.0%) of all
voting power of the common equity of the Corporation or such parent entity or
the surviving, continuing or acquiring company or other transferee, as
applicable, immediately following the consummation of such transaction, in
substantially the same proportions vis-à-vis each other as immediately before
such transaction, (b) the transfer of assets between or among the Corporation
and its Subsidiaries in accordance with Specified Contract Terms shall not
itself constitute a “Change of Control,” and (c) a “person” or “group” shall not
be deemed to beneficially own securities subject to a stock purchase agreement,
merger agreement or similar agreement (or any voting or option agreement related
thereto) until the consummation of the transactions contemplated by such
agreement.

For the purposes of this definition, (x) any transaction or event described in
both clause (A) and in clause (B)(1) or (B)(2) above (without giving effect to
the proviso set forth in this definition) will be deemed to occur solely
pursuant to clause (B) above (subject to such proviso); and (y) whether a Person
is a “beneficial owner” and whether shares are “beneficially owned” will be
determined in accordance with Rule 13d-3 under the Exchange Act.

“Change of Control Notice” shall have the meaning ascribed to it in Section
(B)(2) of Article VIII.

“Charter” shall have the meaning ascribed to it in the recitals.

“Close of Business” shall mean 5:00 p.m., New York City time, on any Business
Day.

“Closing Price” of the shares of Common Stock for any Trading Day shall mean the
closing sale price per share (or, if no closing sale price is reported, the
average of the last bid price and the last ask price per share or, if more than
one in either case, the average of the average last bid prices and the average
last ask prices per share) of Common Stock on such Trading Day as reported in

 

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composite transactions for the principal U.S. national or regional securities
exchange on which the shares of Common Stock are then listed. If the shares of
Common Stock are not listed on a U.S. national or regional securities exchange
on such Trading Day, then the Closing Price will be the last quoted bid price
per share of Common Stock on such Trading Day in the over-the-counter market as
reported by OTC Markets Group Inc. or a similar organization. If the shares of
Common Stock are not so quoted on such Trading Day, then the Closing Price will
be the average of the mid-point of the last bid price and the last ask price per
share of Common Stock on such Trading Day from a nationally recognized
independent investment banking firm selected by the Corporation in good faith.

“Code” shall mean the United States Internal Revenue Code of 1986.

“Combination Redemption Settlement” shall have the meaning ascribed to it in
Section (A) of Article VIII.

“Common Stock” shall have the meaning ascribed to it in Section (A) of
Article III.

“Constituent Person” shall have the meaning ascribed to it in Section (I) of
Article IX.

“Conversion Agent” shall mean the Person acting as conversion agent for the
Series A Preferred Stock, as provided in Article XVI.

“Conversion Date” shall mean any Mandatory Conversion Date or Optional
Conversion Date.

“Conversion Price” shall mean $49.5409 per share of Common Stock, as adjusted in
accordance with the terms and conditions of Article IX.

“Conversion Shares” shall have the meaning ascribed to it in Section (F) of
Article VII.

“Corporation” shall have the meaning ascribed to it in the recitals.

“Corporation Optional Redemption Date” shall have the meaning ascribed to it in
Section (C) of Article VIII.

“Corporation Optional Redemption Price” shall have the meaning ascribed to it in
Section (A) of Article VIII.

“Corporation Optional Redemption Right” shall have the meaning ascribed to it in
Section (A) of Article VIII.

“Credit Agreement” shall mean that certain Amended and Restated Credit
Agreement, dated as of May 20, 2014, by and among Catalent Pharma Solutions,
Inc., PTS Intermediate Holdings LLC, Morgan Stanley Senior Funding Inc., as
administrative agent, collateral agent and swing line lender and other lenders
as parties thereto, as amended by that certain Amendment No.

 

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1 to Amended and Restated Credit Agreement, dated as of December 1, 2014,
Amendment No. 2 to Amended and Restated Credit Agreement, dated as of
December 9, 2016, and Amendment No. 3 to Amended and Restated Credit Agreement,
dated as of October 18, 2017, in the form such agreement is on file on EDGAR as
of April 14, 2019, but including as supplemented by any Incremental Amendment
(as defined in the Credit Agreement), entered into in connection with the
consummation of the transactions contemplated by the Merger Agreement.

“DGCL” shall mean the Delaware General Corporation Law.

“Dividends” shall have the meaning ascribed to it in Section (A) of Article IV.

“Dividend Payment Date” shall have the meaning ascribed to it in Section (B) of
Article IV.

“Dividend Rate” shall have the meaning ascribed to it in Section (A) of
Article IV.

“DTC” shall mean the Depository Trust Company.

“Equity-Linked Securities” shall have the meaning ascribed to it in Section
(A)(3) of Article IX.

“Effective Price” shall mean, with respect to the issuance of any share of
Common Stock or any Equity-Linked Security:

A.     in the case of the issuance of shares of Common Stock, the issuance price
of such shares of Common Stock, expressed as an amount per share of Common
Stock; and

B.     in the case of the issuance of any Equity-Linked Security, an amount
equal to a fraction whose:

 

 

1.

numerator is equal to the sum, without duplication, of (a) the aggregate value
of the issuance price of all such Equity-Linked Securities; and (b) the
aggregate value of the minimum aggregate additional consideration, if any,
payable to purchase or otherwise acquire shares of Common Stock pursuant to such
Equity-Linked Securities; and

 

 

2.

denominator is equal to the maximum number of shares of Common Stock underlying
such Equity-Linked Securities;

provided, however, that:

(w)     for purposes of clauses (A) and (B)(1) above, all underwriting
commissions, placement agency commissions or similar commissions paid to any
broker-dealer by the Corporation or any of its Affiliates in connection with
such issuance (excluding any other fees or expenses incurred by the Corporation
or any of its Affiliates) will be included in the aggregate issuance price
referred to in such clauses;

 

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(x)     for purposes of clause (B) above, if such minimum aggregate
consideration, or such maximum number of shares of Common Stock, is not
determinable at the time such Equity-Linked Securities are issued or sold, then
(I) the initial consideration payable under such Equity-Linked Securities, or
the initial number of shares of Common Stock underlying such Equity-Linked
Securities, as applicable, will be used; and (II) at each time thereafter when
such amount of consideration or number of shares becomes determinable or is
otherwise adjusted (including pursuant to “anti-dilution” or similar
provisions), there will be deemed to occur, for purposes of Section (A)(3) of
Article IX and without affecting any prior adjustment theretofore made to the
Conversion Price, an issuance of additional Equity-Linked Securities;

(y)     for purposes of clause (B) above, the surrender, extinguishment,
maturity or other expiration of any such Equity-Linked Securities will be deemed
not to constitute consideration payable to purchase or otherwise acquire shares
of Common Stock pursuant to such Equity-Linked Securities; and

(z)     the “value” of any such consideration will be the fair value thereof, as
of the date such shares or Equity-Linked Securities, as applicable, are issued,
determined in good faith by the Corporation (or, in the case of cash denominated
in U.S. dollars, the face amount thereof).

“Ex-Dividend Date” shall mean, with respect to an issuance, dividend or
distribution on shares of Common Stock, the first date on which shares of Common
Stock trade on the applicable exchange or in the applicable market, regular way,
without the right to receive such issuance, dividend or distribution (including
pursuant to due bills or similar arrangements required by the relevant stock
exchange). For the avoidance of doubt, any alternative trading convention on the
applicable exchange or market in respect of shares of Common Stock under a
separate ticker symbol or CUSIP number will not be considered “regular way” for
this purpose.

“Exchange Act” shall mean the Securities Exchange Act of 1934.

“Exchange Property” shall have the meaning ascribed to it in Section (I) of
Article IX.

“Exchange Property Unit” shall have the meaning ascribed to it in Section (I) of
Article IX.

“Excluded Issuance” shall have the meaning ascribed to it in Section (C)(3)(f)
of Article IX.

“Group” shall mean any group of one or more persons if such group would be
deemed a “group” as such term is used in Section 13(d)(3) or Section 14(d)(2) of
the Exchange Act.

 

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“Holder” shall mean a Person in whose name any share of Series A Preferred Stock
is registered, which such Person shall be treated by the Corporation, the
Transfer Agent, Registrar, Paying Agent and Conversion Agent as the absolute
owner of such shares of Series A Preferred Stock for the purpose of making any
payment and settling any conversion and for all other purposes under this
Certificate of Designation; provided that, to the fullest extent permitted by
applicable law, (A) no Person that has received any share of Series A Preferred
Stock in violation of the Stockholders’ Agreement shall be deemed a Holder,
(B) the Transfer Agent, Registrar, Paying Agent and Conversion Agent, as
applicable, shall not, unless otherwise directed by the Corporation, recognize
any such Person as a Holder, and (C) the Person in whose name such share of
Series A Preferred Stock was registered immediately prior to such transfer shall
remain the Holder of such share.

“Indebtedness” shall mean any indebtedness (including principal and premium) in
respect of borrowed money.

“Indentures” shall mean (A) the Indenture, dated October 18, 2017, by and among
Catalent Pharma Solutions, Inc., the subsidiary guarantors named therein and
Deutsche Bank Trust Company Americas, as trustee; (B) the Indenture, dated
December 9, 2016, by and among Catalent Pharma Solutions, Inc., the subsidiary
guarantors named therein, Deutsche Trustee Company Limited, as trustee, Deutsche
Bank AG, London Branch, as principal paying agent, and Deutsche Bank Luxembourg
S.A., as transfer agent and registrar, in each case in the form such indentures
are on file on EDGAR as of April 14, 2019; and (C) (1) the indenture relating to
issuance of senior unsecured notes or other debt securities, or (2) the bridge
loan agreement relating to senior unsecured increasing rate loans, in each case,
entered into in connection with the consummation of the transactions
contemplated by the Merger Agreement.

“Investment Agreement” shall mean that certain Investment Agreement, dated as of
April 14, 2019, by and among the Corporation, Green Equity Investors VII, L.P.
and Green Equity Investors Side VII, L.P.

“Issue Date” shall mean the date this Certificate of Designation is filed with,
and accepted by, the Secretary of State of the State of Delaware.

“Junior Stock” shall have the meaning ascribed to it in Section (A) of
Article III.

“Liquidation Event” shall have the meaning ascribed to it in Section (A) of
Article V.

“Liquidation Preference” shall have the meaning ascribed to it in Section (A)(2)
of Article V.

“Liquidity Conditions” shall mean, with respect to any share of Common Stock,
that (A) such share (1) will be issued in book-entry form through the facilities
of the Depository Trust Company under an “unrestricted” CUSIP number; and (2) is
either (a) freely transferrable, in the hands of the Holder to whom such share
is to be issued, pursuant to Rule 144 under the Securities Act, without
limitation as to volume, manner-of-sale, notice or the availability of public
information; or (b) covered by a resale shelf registration statement that is
effective under the Securities Act and that names such Holder as a selling
stockholder, the prospectus accompanying which does not contain any material
misstatement or omission; and (B) to the knowledge of the Corporation, the
resale of such share by such Holder during the next fifteen (15) calendar days
is not expected in good faith by the Corporation to be restricted by any
blackout or similar period under any policy or contract (including the
Registration Rights Agreement) of the Corporation that is applicable to such
Holder.

 

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“Majority Approved Holders” shall have the meaning ascribed to it in the
Stockholders’ Agreement.

“Majority Holders” means, as of any date of determination, the Holders of a
majority of the issued and outstanding shares of Series A Preferred Stock.

“Mandatory Conversion” shall have the meaning ascribed to it in Section (A) of
Article VII.

“Mandatory Conversion Date” shall have the meaning ascribed to it in Section
(A) of Article VII.

“Mandatory Conversion Right” shall have the meaning ascribed to it in Section
(A) of Article VII.

“Mandatory Converting Amount” shall have the meaning ascribed to it in Section
(A) of Article VII.

“Mandatory Redemption Date” shall have the meaning ascribed to it in Section
(B)(2) of Article VIII.

“Mandatory Redemption Multiplier” shall mean:

A.     with respect to any Change of Control that occurs before the first
anniversary of the Issue Date, one hundred fifteen percent (115%);

B.     with respect to any Change of Control that occurs on or after the first
anniversary of the Issue Date but before the second anniversary of the Issue
Date, one hundred fourteen percent (114%);

C.     with respect to any Change of Control that occurs on or after the second
anniversary of the Issue Date but before the third anniversary of the Issue
Date, one hundred twelve percent (112%);

D.     with respect to any Change of Control that occurs on or after the third
anniversary of the Issue Date but before the fourth anniversary of the Issue
Date, one hundred nine percent (109%);

E.     with respect to any Change of Control that occurs on or after the fourth
anniversary of the Issue Date but before the fifth anniversary of the Issue
Date, one hundred five percent (105%); and

F.     with respect to any Change of Control that occurs on or after the fifth
anniversary of the Issue Date, one hundred percent (100%).

 

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“Mandatory Redemption Price” shall have the meaning ascribed to it in Section
(B)(1) of Article VIII.

“Market Disruption Event” shall mean, with respect to any date, the occurrence
or existence, during the one-half hour period ending at the scheduled close of
trading on such date on the principal U.S. national or regional securities
exchange or other market on which shares of Common Stock are listed for trading
or trades, of any material suspension or limitation imposed on trading (by
reason of movements in price exceeding limits permitted by the relevant exchange
or otherwise) of shares of Common Stock or of any option, contract or future
contract relating to shares of Common Stock.

“Maximum Number of Conversion Shares” shall mean, as of any time of
determination, the sum of (A) the aggregate number of shares of Common Stock
issued before such time to settle conversions of the Series A Preferred Stock
(subject to proportionate adjustment for stock splits, dividends and
combinations and similar transactions), if any, plus (B) the maximum number of
shares of Common Stock that would be required to settle the conversion of all
shares of Series A Preferred Stock issued and outstanding at such time based on
the Conversion Price in effect as of such time.

“Merger Agreement” shall mean that certain Agreement and Plan of Merger, by and
among Buyer, a wholly owned subsidiary of Buyer, solely with respect to
Section 4.12 (solely with respect to the Equity Financing (as defined therein))
and Section 8.19 thereof, the Company, Paragon Bioservices, Inc., and Pearl
Shareholder Representative, LLC as representative of the Company Securityholders
(as defined therein).

“Notice of Conversion” shall have the meaning ascribed to it in Section (D)(1)
of Article VII.

“Notice of Mandatory Conversion” shall have the meaning ascribed to it in
Section (B) of Article VII.

“Number of Available Shares” shall mean, as of any time of determination, the
excess, if any, of the Principal Stock Exchange Maximum Number of Shares as of
such time over the Maximum Number of Conversion Shares as of such time.

“Open of Business” shall mean 9:00 a.m., New York City time, on any Business
Day.

“Optional Conversion Date” shall have the meaning ascribed to it in Section (D)
of Article VII.

“Optional Conversion Right” shall have the meaning ascribed to it in Section (C)
of Article VII.

“Optional Converting Amount” shall have the meaning ascribed to it in
Section (C) of Article VII.

“Parity Stock” shall have the meaning ascribed to it in Section (B) of
Article III.

 

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“Participating Dividend Payment Date” shall have the meaning ascribed to it in
Section (B) of Article IV.

“Participating Dividend” or “Participating Dividends” shall have the meanings
ascribed to such terms in Section (A) of Article IV.

“Paying Agent” shall mean the Person acting as paying agent for the Series A
Preferred Stock, as provided in Article XVI.

“Person” shall mean any individual, company, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization, government or agency or political subdivision thereof or any other
entity.

“Physical Redemption Settlement” shall have the meaning ascribed to it in
Section (A) of Article VIII.

“PIK Dividend” shall have the meaning ascribed to it in Section (C) of
Article IV.

“Principal Stock Exchange” shall mean (A) the New York Stock Exchange, or (B) in
the event that the shares of Common Stock are no longer listed or quoted on the
New York Stock Exchange, the principal United States or foreign national
securities exchange on which the shares of Common Stock are so listed or quoted,
or if the shares of Common Stock are not so listed or quoted on a United States
or foreign national securities exchange, the last quoted Trading Day bid price
for shares of Common Stock in the over-the-counter market as reported by OTC
Markets Group Inc.

“Principal Stock Exchange Maximum Number of Shares” shall mean a number of
shares of Common Stock (rounded down to the nearest whole number of shares)
equal to the product of (A) twenty percent (20%), multiplied by (B) the
aggregate number of shares of Common Stock outstanding as of the date of the
Investment Agreement (subject to proportionate adjustment for stock splits,
dividends and combinations and similar transactions).

“Qualified Issuance” shall have the meaning ascribed to it in Section (A)(3) of
Article IX.

“Record Date” shall mean, with respect to any dividend, distribution or other
transaction or event in which the holders of shares of Common Stock or shares of
Series A Preferred Stock, as applicable, have the right to receive any cash,
securities or other property or in which the shares of Common Stock or shares of
Series A Preferred Stock (or other applicable security), as applicable, is
exchanged for or converted into any combination of cash, securities or other
property, the date fixed for determination of stockholders entitled to receive
such cash, securities or other property (whether such date is fixed by the Board
of Directors or a committee thereof, or by statute, contract, this Certificate
of Designation or otherwise). With respect to any Regular Dividend payable on
any Regular Dividend Payment Date, the Record Date therefor will be the
immediately preceding March 15, June 15, September 15 or December 15, as
applicable.

 

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“Registrar” shall mean the Person acting as registrar for the Series A Preferred
Stock, as provided in Article XVI.

“Registration Rights Agreement” shall mean that certain Registration Rights
Agreement, dated as of the Issue Date, by and among the Corporation and Green
Equity Investors VII, L.P., a Delaware limited partnership, and Green Equity
Investors Side VII, L.P., a Delaware limited partnership.

“Regular Dividend Payment Date” shall have the meaning ascribed to it in Section
(B) of Article IV.

“Regular Dividend Period” shall have the meaning ascribed to it in Section
(B) of Article IV.

“Regular Dividend” or “Regular Dividends” shall have the meanings ascribed to
such terms in Section (A) of Article IV.

“Reorganization Event” shall have the meaning ascribed to it in Section (I) of
Article IX.

“Requisite Stockholder Approval” shall mean, as of any date of determination,
the applicable stockholder approval required by the listing standards of the
Principal Stock Exchange with respect to the issuance of Conversion Shares upon
conversion or redemption of shares of Series A Preferred Stock in excess of the
limitations imposed by such listing standards (as of the Issue Date, the
stockholder approval required pursuant to NYSE Listing Standard Rule 312.03(c));
provided, however, that the Requisite Stockholder Approval will be deemed to be
obtained if, due to any amendment or binding change in the interpretation of the
applicable listing standards of the Principal Stock Exchange, such stockholder
approval is no longer required for the Corporation to issue any number of
Conversion Shares to settle conversions or redemptions of the Series A Preferred
Stock.

“S&P 500 Index” shall mean the S&P 500 Index owned and maintained by S&P Global
(or any successor owner thereto).

“S&P Announcement Price” shall mean the arithmetic average of the closing value
of the S&P 500 Index for each of the thirty (30) consecutive VWAP Trading Days
ending on, and including, the VWAP Trading Day immediately preceding the
Announcement Date.

“S&P Year Four Price” shall mean the arithmetic average of the closing value of
the S&P 500 Index for each of the sixty (60) consecutive VWAP Trading Days
ending on, and including, the VWAP Trading Day immediately preceding the
four-year anniversary of the Issue Date.

“SEC” shall mean the United States Securities and Exchange Commission.

“Securities Act” shall mean the Securities Act of 1933.

“Senior Stock” shall have the meaning ascribed to it in Section (C) of
Article III.

 

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“Series A Preferred Stock” shall have the meaning ascribed to it in Article I.

“Specified Contract Terms” shall mean the covenants, terms and provisions of the
Indentures and the Credit Agreement, until such time as such instruments have
been discharged or such covenants, terms or provisions are no longer in effect.

“Stated Value” shall have the meaning ascribed to it in Section (A) of
Article IV.

“Stockholders’ Agreement” shall have the meaning ascribed to it in Section
(A) of Article VI.

“Subsidiary” shall mean, with respect to any Person, (A) any corporation,
association or other business entity (other than a partnership or limited
liability company) of which more than fifty percent (50%) of the total voting
power of the Capital Stock entitled (without regard to the occurrence of any
contingency, but after giving effect to any voting agreement or stockholders’
agreement that effectively transfers voting power) to vote in the election of
directors, managers or trustees, as applicable, of such corporation, association
or other business entity is owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person; and (B) any
partnership or limited liability company where (1) more than fifty percent (50%)
of the capital accounts, distribution rights, equity and voting interests, or of
the general and limited partnership interests, as applicable, of such
partnership or limited liability company are owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person, whether in the form of membership, general, special or limited
partnership or limited liability company interests or otherwise; and (2) such
Person or any one or more of the other Subsidiaries of such Person is a
controlling general partner of, or otherwise controls, such partnership or
limited liability company.

“Trading Day” shall mean any day on which (A) trading of shares of Common Stock
generally occurs on the principal U.S. national or regional securities exchange
on which shares of Common Stock are then listed or, if shares of Common Stock
are not then listed on a U.S. national or regional securities exchange, on the
principal other market on which shares of Common Stock are then traded, and
(B) there is no Market Disruption Event. If shares of Common Stock are not so
listed or traded, then “Trading Day” means a Business Day.

“Transfer Agent” shall mean the Person acting as transfer agent for the Series A
Preferred Stock, as provided in Article XVI.

“VWAP” shall mean, for any VWAP Trading Day, the per share volume-weighted
average price of Common Stock as displayed under the heading “Bloomberg VWAP” on
Bloomberg page “CTLT <EQUITY> AQR” (or, if such page is not available, its
equivalent successor page) in respect of the period from the scheduled open of
trading until the scheduled close of trading of the primary trading session on
such VWAP Trading Day (or, if such volume-weighted average price is unavailable,
the market value of one share of Common Stock on such VWAP Trading Day,
determined, using a volume-weighted average price method, by a nationally
recognized independent investment banking firm selected by the Corporation in
good faith. The VWAP will be determined without regard to after-hours trading or
any other trading outside of the regular trading session.

 

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“VWAP Market Disruption Event” shall mean, with respect to any date, (A) the
failure by the principal U.S. national or regional securities exchange on which
shares of Common Stock are then listed, or, if shares of Common Stock are not
then listed on a U.S. national or regional securities exchange, the principal
other market on which shares of Common Stock are then traded, to open for
trading during its regular trading session on such date, or (B) the occurrence
or existence, for more than one half-hour period in the aggregate, of any
suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the relevant exchange or otherwise) of shares of
Common Stock or, if traded on such exchange, of any option, contract or future
contract relating to shares of Common Stock, and such suspension or limitation
occurs or exists at any time before 1:00 p.m., New York City time, on such date.

“VWAP Trading Day” shall mean a day on which (A) there is no VWAP Market
Disruption Event, and (B) trading of shares of Common Stock generally occurs on
the principal U.S. national or regional securities exchange on which shares of
Common Stock are then listed or, if shares of Common Stock are not then listed
on a U.S. national or regional securities exchange, on the principal other
market on which shares of Common Stock are then traded. If shares of Common
Stock are not so listed or traded, then “VWAP Trading Day” means a Business Day.

“Weighted Average Issuance Price” shall have the meaning ascribed to it in
Section (A)(3) of Article IX.

“Year Five Price” shall mean the 60-Day VWAP measured as of the five-year
anniversary of the Issue Date.

“Year Four Price” shall mean 60-Day VWAP measured as of the four-year
anniversary of the Issue Date.

ARTICLE XIII

HEADINGS

The headings of the paragraphs of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

ARTICLE XIV

RECORD HOLDERS

To the fullest extent permitted by applicable law, the Corporation may deem and
treat the record holder of any share of Series A Preferred Stock as the absolute
owner of such share of Series A Preferred Stock for the purpose of making any
payment and settling any conversion or redemption of such share of Series A
Preferred Stock and for all other purposes under this Certificate of
Designation, and the Corporation shall not be affected by any notice to the
contrary; provided that, to the fullest extent permitted by applicable law,
(i) no Person that has received any share of Series A Preferred Stock in
violation of the Stockholders’ Agreement shall be deemed a

 

40

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record holder of any share of Series A Preferred Stock, (ii) the Transfer Agent,
Registrar, Paying Agent and Conversion Agent, as applicable, shall not, unless
otherwise directed by the Corporation, recognize any such Person as a record
holder of such share of Series A Preferred Stock, and (iii) the Person in whose
name such share of Series A Preferred Stock was registered immediately prior to
such transfer shall remain the record holder of such share of Series A Preferred
Stock.

ARTICLE XV

CALCULATIONS

Whenever any provision of this Certificate of Designation requires the
Corporation to calculate the Closing Prices or the VWAPs, or any function
thereof, over a span of multiple days (including to calculate an adjustment to
the Conversion Price), the Corporation will make appropriate adjustments to
account for any adjustment to the Conversion Price that becomes effective, or
any transaction or other event requiring an adjustment to the Conversion Price
or requiring a Participating Dividend, where the Ex-Dividend Date or effective
date, as applicable, of such transaction or event occurs, at any time during the
period when such Closing Prices, VWAPs or function thereof are to be calculated.
The Corporation will make all calculations under this Certificate of Designation
in good faith, which calculations will, absent manifest error, control for
purposes this Certificate of Designation.

ARTICLE XVI

TRANSFER AGENT, CONVERSION AGENT, AND REGISTRAR

The duly appointed Transfer Agent, Paying Agent, Conversion Agent, and Registrar
for the shares of Series A Preferred Stock shall be [Computershare Trust
Company, N.A.]. The Corporation may, in its sole discretion, remove the Transfer
Agent, Paying Agent, Conversion Agent or Registrar in accordance with the terms
and conditions of any agreement between the Corporation and such Person(s);
provided that the Corporation shall appoint a successor Transfer Agent, Paying
Agent, Conversion Agent or Registrar, as applicable, who shall accept such
appointment prior to the effectiveness of any such removal. Upon any such
removal or appointment, the Corporation shall send notice thereof by first-class
mail, postage prepaid, to the Holders of the shares of Series A Preferred Stock.

ARTICLE XVII

SEVERABILITY

If any term of this Certificate of Designation is invalid, unlawful or incapable
of being enforced by reason of any rule of law or public policy, all other terms
set forth herein that can be given effect without the invalid, unlawful or
unenforceable term will, nevertheless, remain in full force and effect, and no
term herein set forth will be deemed dependent upon any other such term unless
expressed stated herein.

 

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ARTICLE XVIII

OTHER RIGHTS

The shares of Series A Preferred Stock shall not have any right, preference,
privilege or voting power or relative, participating, optional or other special
right, or qualification, limitation or restriction thereof, other than as set
forth herein or in the Charter, Bylaws or as provided by applicable law.

ARTICLE XIX

TRANSFER RIGHTS

The shares of Series A Preferred Stock and any share of Common Stock issued upon
the conversion or redemption of any share of Series A Preferred Stock may not be
sold or otherwise transferred except as permitted in the Stockholders’
Agreement.

ARTICLE XX

WITHHOLDING

All payments and distributions (or deemed distributions) on the shares of Series
A Preferred Stock (and any share of Common Stock issued upon the conversion or
redemption of any share of Series A Preferred Stock) shall be subject to
withholding and backup withholding of taxes to the extent required by applicable
law, subject to applicable exemptions, and amounts withheld, if any, shall be
treated as received by the Holders to the extent timely paid by the Corporation
or the Paying Agent to the appropriate taxing authority.

 

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ARTICLE XXI

SECTION HEADINGS; CONSTRUCTION

The headings of Sections in this Certificate of Designation are provided for
convenience only and will not affect its construction or interpretation. Unless
otherwise specified, all references to “Section”, “Sections”, “clause” or
“clauses” refer to the corresponding Section, Sections, clause or clauses of
this Certificate of Designation. All words used in this Certificate of
Designation will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word “including”
does not limit the preceding words or terms and shall have the meaning
“including, without limitation,” whether or not so specified. If any period
expires on a day that is not a Business Day or any event or condition is
required by the terms of this Certificate of Designation to occur or be
fulfilled on a day that is not a Business Day, such period shall expire or such
event or condition shall occur or be fulfilled, as the case may be, on the next
succeeding Business Day. The word “extent” in the phrase “to the extent” shall
mean the degree to which a subject or other thing extends and such phrase shall
not mean “if”. The words “herein”, “hereof” or “hereunder” and similar terms
refer to this Certificate of Designation as a whole and not to any specific
provision; the word “or” is not exclusive. All references herein to “$” or
“dollars” refer to United States dollars and cents. Terms that are defined in
this Certificate of Designation in the singular have a comparable meaning when
used in the plural, and vice versa. Any contract, instrument, law or regulation
defined or referred to herein means such contract, instrument, law or regulation
as from time to time amended, modified or supplemented or otherwise in effect,
whether or not so specified, together with any rules or regulations promulgated
under any such laws.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, Catalent, Inc. has caused this Certificate of Designation to
be duly executed by its authorized officer this _______ day of ________________,
2019.

 

CATALENT, INC.

By:                                                               

Name: Steven L. Fasman

Title: Senior Vice President, General

Counsel and Secretary

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ANNEX A

CONVERSION NOTICE

CATALENT, INC.

Series A Convertible Preferred Stock

Subject to the terms of the Certificate of Designation of Series A Convertible
Preferred Stock (the “Series A Preferred Stock”) of Catalent, Inc. (the
“Corporation”), by executing and delivering this Conversion Notice, the
undersigned Holder of [•] shares of Series A Preferred Stock directs the
Corporation to convert:

[•] shares of Series A Preferred Stock registered in the name of the
undersigned.

The undersigned hereby directs the Corporation to cause the Corporation’s common
stock, par value $0.01 per share (the “Common Stock”) issued by the Corporation
in response to this Conversion Notice to be registered in the following name:

_________________________________________,

and to mail evidence of book-entry of such issuance of shares of Common Stock
and the cash, if any, payable in lieu of any fractional share of Common Stock
otherwise issuable to the following address:

_________________________________________

_________________________________________

_________________________________________

_________________________________________

_________________________________________

 

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Date:

         

 

  

 

     (Legal Name of Holder)     

By:

          

 

Name:

       

Title:

[Signature Page to Conversion Notice]

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SCHEDULE B

Form of Registration Rights Agreement

[See Attached]

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SCHEDULE B

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of [•], 2019, is
by and among Catalent, Inc., a Delaware corporation (the “Company”), and Green
Equity Investors VII, L.P., a Delaware limited partnership, and Green Equity
Investors Side VII, L.P., a Delaware limited partnership (collectively, on a
several and not joint basis, the “Purchaser”). The Purchaser and any other
Person who may become a party hereto pursuant to Section 11(c) are referred to
individually as a “Shareholder” and collectively as the “Shareholders.”

WHEREAS, the Company and the Purchaser are parties to the Equity Commitment and
Investment Agreement, dated as of April 14, 2019 (as the same may be amended,
supplemented or otherwise modified from time to time, the “Investment
Agreement”); and

WHEREAS, the Purchaser desires to have, and the Company desires to grant,
certain registration and other rights with respect to the Registrable Securities
on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:

Section 1. Definitions. As used in this Agreement, the following terms have the
following meanings, and terms used herein but not otherwise defined herein have
the meanings assigned to them in the Investment Agreement:

“Adverse Disclosure” means public disclosure of material non-public information
that the Company has determined in good faith (after consultation with legal
counsel): (i) would be required to be made in any Registration Statement or
Prospectus filed with the SEC by the Company so that such Registration Statement
or Prospectus would not be materially misleading; (ii) would not be required to
be made at such time but for the filing, effectiveness or continued use of such
Registration Statement or Prospectus; and (iii) the Company has a bona fide
business purpose for not disclosing publicly.

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, (i)
“control,” as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise and (ii) the terms “controlling,” “controlled by” and
“under common control with” have correlative meanings. For purposes of this
Agreement (but not for purposes of the definition of “Registrable Securities”),
none of the Shareholders and their respective Affiliates shall be deemed to be
Affiliates of the Company or any of its Subsidiaries.

“Agreement” has the meaning set forth in the preamble.

“Automatic Shelf Registration Statement” has the meaning set forth in Rule 405
of the Securities Act.

 

1

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“Closing” has the meaning set forth in the Investment Agreement.

“Common Stock” means all shares currently or hereafter existing of Common Stock,
par value $0.01 per share, of the Company.

“Company” has the meaning set forth in the preamble.

“Convertible Preferred Stock” means all currently or hereafter existing shares
of Series A Convertible Preferred Stock, par value $0.01 per share, of the
Company.

“Demand Notice” has the meaning set forth in Section 3(b).

“Demand Registration” has the meaning set forth in Section 3(b).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute thereto, and the rules and regulations of the SEC promulgated
thereunder.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Indemnified Party” has the meaning set forth in Section 8(c).

“Indemnifying Party” has the meaning set forth in Section 8(c).

“Investment Agreement” has the meaning set forth in the recitals.

“Long-Form Registration” has the meaning set forth in Section 3(b).

“Losses” has the meaning set forth in Section 8(a).

“Marketed Offering” means a registered underwritten offering of Registrable
Securities (including any registered underwritten Shelf Offering) that is
consummated, withdrawn or abandoned by the applicable Shareholders following the
participation by the Company’s management in a customary “road show” (including
an “electronic road show”) or other similar marketing effort by the Company.

“Offering Persons” has the meaning set forth in Section 6(o).

“Person” means any natural person, corporation, limited partnership, general
partnership, limited liability company, joint stock company, joint venture,
association, company, estate, trust, bank trust company, land trust, business
trust, or other organization, whether or not a legal entity, custodian,
trustee-executor, administrator, nominee or entity in a representative capacity
and any government or agency or political subdivision thereof.

“Piggyback Notice” has the meaning set forth in Section 4(a).

“Piggyback Registration” has the meaning set forth in Section 4(a).

“Piggyback Request” has the meaning set forth in Section 4(a).

 

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“Proceeding” means an action, claim, suit, arbitration or proceeding (including
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.

“Prospectus” means the prospectus included in any Registration Statement
(including a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective Registration Statement in reliance upon
Rule 430A or Rule 430B of the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to such
prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such prospectus.

“Public Offering” means the sale of shares of Common Stock to the public
pursuant to an effective Registration Statement (other than Form S-4 or Form S-8
or any successor form) filed under the Securities Act or any comparable law or
regulatory scheme of any foreign jurisdiction.

“Purchaser” has the meaning set forth in the preamble.

“Registrable Securities” means, as of any date of determination, any shares of
Convertible Preferred Stock and any shares of Common Stock that the Shareholders
have acquired or have the right to acquire upon conversion of the Convertible
Preferred Stock, and any other securities issued or issuable with respect to any
such shares by way of share split, share subdivision, share dividend,
distribution, recapitalization, merger, exchange, replacement or similar event
or otherwise acquired. As to any particular Registrable Securities, once issued,
such securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities have been sold,
transferred, disposed of or exchanged in accordance with such Registration
Statement; (ii) such securities have been otherwise transferred, new
certificates for such securities not bearing a restrictive legend restricting
further transfer shall have been delivered by the Company and subsequent public
distribution of such securities shall not require registration under the
Securities Act; and (iii) such securities shall cease to be issued and
outstanding. In addition, such securities shall cease to be Registrable
Securities with respect to any holder upon the later of the date (A) such
holder, together with its, his or her Affiliates, beneficially owns less than
[ • ]1 shares of Common Stock (including all shares issuable upon the conversion
of all Convertible Preferred Stock) and (B) such holder is able to dispose of
all of its, his or her Registrable Securities pursuant to Rule 144 without any
notice requirement, volume limitation or manner of sale limitation thereunder.

“Registration Statement” means any registration statement of the Company under
the Securities Act which covers any of the Registrable Securities pursuant to
the provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
all exhibits and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.

 

1 

Note to Draft: $150 million divided by the closing sale price as of the trading
day immediately prior to the Closing Date.

 

3

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“Rule 144” means Rule 144 of the Securities Act.

“SEC” means the Securities and Exchange Commission or any successor agency
having jurisdiction under the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended, and any successor
statute thereto, and the rules and regulations of the SEC promulgated
thereunder.

“Shareholders” has the meaning set forth in the preamble.

“Shelf Offering” has the meaning set forth in Section 4(c).

“Short-Form Registration” has the meaning set forth in Section 3(b).

“Stockholders’ Agreement” has the meaning set forth in Section 11(h).

“Subsidiary” means, with respect to any Person, any company, corporation,
partnership, joint venture, limited liability company or other entity (x) of
which such Person or a subsidiary of such Person is a general partner or (y) of
which a majority of the voting securities or other voting interests, or a
majority of the securities or other interests of which having by their terms
ordinary voting power to elect a majority of the board of directors or Persons
performing similar functions with respect to such Person, is directly or
indirectly owned by such Person and/or one or more subsidiaries thereof.

“Take-Down Notice” has the meaning set forth in Section 4(c).

“Triggering Demand Notice” has the meaning set forth in Section 2(b).

The terms “underwritten registration” or “underwritten offering” means a
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.

“Well-Known Seasoned Issuer” has the meaning set forth in Rule 405 of the
Securities Act.

Section 2. Holders of Registrable Securities. A holder of Registrable Securities
means a Shareholder that owns or has a right to acquire such Registrable
Securities.

Section 3. Shelf Registration; Demand Registrations.

(a) Filing and Effectiveness of Shelf Registration Statement. Subject to the
other applicable provisions of this Agreement, the Company shall use its
reasonable best efforts to (i) prepare, file and cause to be declared effective
by the SEC (if such Registration Statement is not an Automatic Shelf
Registration Statement), within one hundred twenty (120) days following the
Closing, a Registration Statement, in the form of a Short-Form Registration (if
the Company is then eligible for the same) or in the form of a Long-Form
Registration (if the Company is not then eligible for a Short-Form
Registration), as applicable, covering the sale or distribution from time to
time by the Shareholders pursuant to a plan of distribution acceptable to a
majority of the

 

4

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Shareholders, on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act, of all of the Registrable Securities; and (ii) cause such
Registration Statement (including by filing a new, replacement Registration
Statement as required under the Securities Act) to remain effective under the
Securities Act continuously until no Registrable Securities are outstanding.

(b) Requests for Registration.

Subject to the following paragraphs of this Section 3(b), following the Closing,
one or more Shareholders shall have the right, by delivering or causing to be
delivered a written notice to the Company, to require the Company to register
pursuant to the terms of this Agreement, under and in accordance with the
provisions of the Securities Act, the offer, sale and distribution of the number
of Registrable Securities requested to be so registered pursuant to the terms of
this Agreement on Form S-3 (which, unless all Shareholders delivering such
notice request otherwise, shall be (A) filed pursuant to Rule 415 of the
Securities Act and (B) if the Company is a Well-Known Seasoned Issuer at the
time of filing such Registration Statement with the SEC, designated by the
Company as an Automatic Shelf Registration Statement), if the Company is then
eligible for such short-form, or any similar or successor short-form
registration (each, a “Short-Form Registration”) or, if the Company is not then
eligible for such short form registration, on Form S-1 or any similar or
successor long-form registration (each, a “Long-Form Registration”) (any such
written notice, a “Demand Notice” and any such registration, a “Demand
Registration”), as soon as reasonably practicable after delivery of such Demand
Notice, but, in any event, the Company shall be required to make the initial
filing of the Registration Statement within sixty (60) days following receipt of
such Demand Notice in the case of a Short-Form Registration or within ninety
(90) days following receipt of such Demand Notice in the case of a Long-Form
Registration; provided, however, that, unless a Shareholder requests to have
registered all of its Registrable Securities, a Demand Notice may only be made
if the sale of the Registrable Securities requested to be registered by such
Shareholders is reasonably expected to result in aggregate gross cash proceeds
in excess of $150,000,000 (without regard to any underwriting discount or
commission). Following receipt of a Demand Notice for a Demand Registration in
accordance with this Section 3(b), the Company shall use its reasonable best
efforts to cause such Registration Statement to become effective under the
Securities Act as promptly as practicable after the filing thereof (if such
Registration Statement is not an Automatic Shelf Registration Statement).

(i) No Demand Registration shall be deemed to have occurred for purposes of this
Section 3(b) or Section 4(c), and any Demand Notice delivered in connection
therewith shall not count as a Demand Notice for purposes of Section 3(f) or
4(c), if (A) the Registration Statement relating thereto (and covering not less
than all Registrable Securities specified in the applicable Demand Notice for
sale in accordance with the intended method or methods of distribution specified
in such Demand Notice) (1) does not become effective, or (2) is not maintained
as effective for the period required pursuant to this Section 3, (B) the
offering of the Registrable Securities pursuant to such Registration Statement
is subject to a stop order, injunction, or similar order or requirement of the
SEC during such period, or (C) the conditions to closing specified in any
underwriting agreement, purchase agreement, or similar agreement entered into in
connection with the registration relating to such request are not satisfied
other than as a result of the Shareholders’ actions.

 

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(ii) Each Demand Notice made pursuant to this Section 3(b) must: (A) state that
it is a notice to initiate a Demand Registration under this Agreement;
(B) identify the Shareholders effecting the request; and (C) specify the number
of Registrable Securities of each such Shareholder to be registered and the
intended method(s) of disposition thereof.

(iii) Except as otherwise agreed by all Shareholders with Registrable Securities
subject to a Demand Registration, the Company shall maintain the continuous
effectiveness of the Registration Statement with respect to such Demand
Registration until the earliest to occur of (x) the date on which such
securities cease to be Registrable Securities, (y) the date on which such
Registrable Securities have actually been sold and (z) one hundred eighty
(180) days after the effective date of such Registration Statement.

(iv) Within five (5) Business Days after receipt by the Company of a Demand
Notice pursuant to this Section 3(b) (the “Triggering Demand Notice”), the
Company shall deliver a written notice of any such Demand Notice to all other
holders of Registrable Securities, and the Company shall, subject to the
provisions of Section 3(c), include in such Demand Registration all such
Registrable Securities with respect to which the Company has received written
requests for inclusion therein meeting all of the requirements of a Demand
Notice under this Agreement (whether or not any of the other Shareholders
demanding such inclusion have exercised such Shareholders’ conversion rights)
within five (5) days after the date that such notice from the Company has been
delivered; provided that (A) all of such other Shareholders must agree to the
plan of distribution proposed by the Shareholders who delivered the Triggering
Demand Notice and (B) in connection with any underwritten registration, such
holders must agree to abide and be bound by the underwriting agreement approved
by the Company and the Shareholders who delivered the Triggering Demand Notice
as if they were such Shareholders. All requests made pursuant to the preceding
sentence shall specify the aggregate amount of Registrable Securities to be
registered and the intended method of distribution of such securities.

(v) For the avoidance of doubt, an underwritten registration pursuant to a
Demand Registration may be made pursuant to an effective shelf Registration
Statement filed pursuant to Section 3(a) hereof.

(c) Priority on Demand Registration. If any of the Registrable Securities
registered pursuant to a Demand Registration are to be sold in an underwritten
offering, and the managing underwriter(s) advise the holders of such securities
in writing that in its good faith opinion the total number or dollar amount of
Registrable Securities proposed to be sold in such offering is such as to
adversely affect the price, timing or distribution of such underwritten
offering, then there shall be included in such underwritten offering the number
or dollar amount of Registrable Securities that in the opinion of such managing
underwriter(s) can be sold without adversely affecting such underwritten
offering, and such number of Registrable Securities shall be allocated pro rata
among the Shareholders of Registrable Securities that have requested to
participate in such Demand Registration on the basis of the percentage of the
Registrable Securities requested to be included in such Registration Statement
by such holders.

No Registrable Securities excluded from the underwriting by reason of the
managing underwriter’s marketing limitations shall be included in such offering.

 

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(d) Postponement of Registration. The Company shall be entitled to postpone the
filing (but not the preparation) or the initial effectiveness of, or suspend the
use of, a Registration Statement, in each case for a reasonable period of time
not more than twice in any twelve (12) month period and that does not exceed
(x) sixty (60) days on any one occasion or (y) in the aggregate together with
all other such postponements or suspensions, ninety (90) days in any twelve
(12) month period, if the Company delivers, as applicable, to the Shareholders
requesting registration or the Shareholders named in a Registration Statement
filed pursuant to Section 3(a) a certificate signed by an executive officer
certifying that such registration and offering would (A) require the Company to
make an Adverse Disclosure or (B) materially interfere with any bona fide
material financing, acquisition, disposition or other similar transaction
involving the Company or any of its Subsidiaries then under consideration. Such
certificate shall contain a statement of the reasons for such postponement and
an approximation of the anticipated delay. The Shareholders receiving such
certificate shall keep the information contained in such certificate
confidential subject to the same extent and on the same terms and conditions as
set forth in Section 6(o).

(i) If the Company shall so postpone the filing of a Registration Statement in
accordance with this Section 3(d) or suspend its use following the delivery of a
Demand Notice, the Shareholders who sent the Demand Notice initiating such
registration shall have the right to withdraw such Demand Notice pursuant to
Section 3(b) by giving written notice to the Company during the period beginning
from the date of postponement notice to the tenth (10th) day prior to the
anticipated termination date of the postponement period, as provided in the
certificate delivered to the applicable Shareholders and, for the avoidance of
doubt, upon such withdrawal, the withdrawn request shall not constitute a Demand
Notice; provided that, in the event such Shareholders do not so withdraw their
Demand Notice, the Company shall continue to prepare a Registration Statement
during such postponement such that, if the Company exercises its rights under
this Section 3(d), it shall be in a position to and shall, as promptly as
practicable following the expiration of the applicable deferral or suspension
period, file or update and use its reasonable efforts to cause the effectiveness
of the applicable deferred or suspended Registration Statement.

(ii) In the event the Company exercises its rights to postpone the initial
effectiveness of, or suspend the use of, a Registration Statement, the
Shareholders participating in such Demand Registration shall suspend, promptly
upon their receipt of the certificate referred to above, use of the Prospectus
relating to such Demand Registration or the Prospectus contained within the
Registration Statement filed pursuant to Section 3(a) in connection with any
sale or offer to sell Registrable Securities.

(e) Cancellation of a Demand Registration. Holders of a majority of the
Registrable Securities subject to the original Triggering Demand Notice shall
have the right to notify the Company that they have determined that the
applicable Registration Statement be abandoned or withdrawn by giving written
notice of such abandonment or withdrawal at any time prior to the effective time
of such Registration Statement, in which event the Company shall abandon or
withdraw such Registration Statement; provided that any Demand Notice underlying
such abandonment or withdrawal shall not be deemed to be a Demand Notice for
purposes of Section 3(f) if such Demand Notice is abandoned or withdrawn in
response to a material adverse change regarding the Company or a material
adverse change in the financial markets generally. The Company shall cease all
efforts to secure registration following any such abandonment or withdrawal.

 

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(f) Number of Demand Notices. In connection with the provisions of this
Section 3, the Shareholders collectively shall have four (4) Demand Notices in
connection with Marketed Offerings, which they are permitted to deliver (or
cause to be delivered) to the Company hereunder; provided that in connection
therewith, the Company shall cause its officers to use their reasonable best
efforts to support the marketing of the Registrable Securities covered by the
Registration Statement (including participation in “road shows”); provided that
(A) the Shareholders may not make more than two (2) Demand Registration requests
in any 365-day period and (B) the Shareholders may not make a Demand
Registration requesting to launch an underwritten offering within the period
commencing fourteen (14) days prior to the end of any fiscal quarter of the
Company and ending two (2) days following the date on which the Company shall
publicly announce its earnings for such fiscal quarter or the year ending on
such fiscal quarter. For the avoidance of doubt, the Shareholders shall have no
further rights to Demand Registrations of its Registrable Securities other than
pursuant to this Section 3(f).

Section 4. Piggyback Registration; Shelf Take Down.

(a) Right to Piggyback. Except with respect to a Demand Registration, the
procedures for which are addressed in Section 3, if the Company proposes to file
a registration statement under the Securities Act with respect to an offering of
Common Stock, whether or not for sale for its own account and whether or not an
underwritten offering or an underwritten registration (other than a registration
statement (i) on Form S-4, Form S-8 or any successor forms thereto or (ii) filed
to effectuate an exchange offer or any employee benefit or dividend reinvestment
plan), then the Company shall give prompt written notice of such filing no later
than five (5) Business Days prior to the filing date (the “Piggyback Notice”) to
all of the holders of Registrable Securities. The Piggyback Notice shall offer
such holders the opportunity to include (or cause to be included) in such
Registration Statement the number of Registrable Securities as each such holder
may request (each registration wherein a holder participates in accordance with
this Section 4, a “Piggyback Registration”). Subject to Section 4(b), the
Company shall include in each such Piggyback Registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein (each a “Piggyback Request”) within five (5) Business Days
after notice has been given to the applicable holder. The Company shall not be
required to maintain the effectiveness of the Registration Statement for a
Piggyback Registration beyond the earlier to occur of (x) one hundred eighty
(180) days after the effective date thereof and (y) consummation of the
distribution of the Common Stock (other than the Registrable Securities
identified in such Piggyback Requests) that are the subject of such Registration
Statement proposed to be filed by the Company.

(b) Priority on Piggyback Registrations. If any of the Registrable Securities to
be registered pursuant to the registration giving rise to the rights under this
Section 4 are to be sold in an underwritten offering, the Company shall use
reasonable best efforts to cause the managing underwriter(s) of a proposed
underwritten offering to permit holders of Registrable Securities who have
timely submitted a Piggyback Request in connection with such offering to include
in such offering all Registrable Securities included in each holder’s Piggyback
Request on the same terms and subject to the same conditions as any other
shares, if any, of the Company included in the

 

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offering. Notwithstanding the foregoing, if the managing underwriter(s) of such
underwritten offering advise the Company in writing that it is their good faith
opinion the total number or dollar amount of securities that such holders, the
Company and any other Persons having rights to participate in such registration,
intend to include in such offering is such as to adversely affect the price,
timing or distribution of the securities in such offering, then there shall be
included in such underwritten offering the number or dollar amount of securities
that in the opinion of such managing underwriter(s) can be sold without so
adversely affecting such offering, and such number of Registrable Securities
shall be allocated as follows:

(i) if the registration involves an underwritten primary offering on behalf of
the Company, (A) first, all securities proposed to be sold by the Company for
its own account; (B) second, all Registrable Securities requested to be included
in such registration by the Shareholders pursuant to this Section 4, pro rata
among such holders on the basis of the percentage of the Registrable Securities
requested to be included in such Registration Statement by all holders that made
such Piggyback Request; and (C) third, all other securities requested to be
included in such Registration Statement by other holders of securities entitled
to include such securities in such Registration Statement pursuant to piggyback
registration rights; provided that any Shareholder may, prior to the earlier of
(x) the effectiveness of the Registration Statement and (y) the time at which
the offering price or underwriter’s discount are determined with the managing
underwriter(s), withdraw its request to be included in such registration
pursuant to this Section 4.

(ii) if the registration involves an underwritten offering that was initially
requested by any Person(s) (other than a Shareholder) to whom the Company has
granted registration rights which are not inconsistent with the rights granted
in, and do not otherwise conflict with the terms of, this Agreement, (A) first,
the securities requested to be included in such underwritten offering by such
other Person(s) pro rata among such Person(s) on the basis of the percentage of
the securities requested to be included in such Registration Statement by all
holders that made such request; (B) second, all Registrable Securities requested
to be included in such registration by the Shareholders pursuant to this
Section 4, pro rata among such holders on the basis of the percentage of the
Registrable Securities requested to be included in such Registration Statement
by all holders that made such Piggyback Request; (C) third, all other securities
requested to be included in such Registration Statement by other holders of
securities entitled to include such securities in such Registration Statement
pursuant to piggyback registration rights; and (D) fourth, all securities
requested to be included in such Registration Statement by the Company for its
own account; provided that any Shareholder may, prior to the earlier of (x) the
effectiveness of the Registration Statement and (y) the time at which the
offering price or underwriter’s discount are determined with the managing
underwriter(s), withdraw its request to be included in such registration
pursuant to this Section 4.

(c) Shelf-Take Downs. At any time that a shelf Registration Statement covering
Registrable Securities pursuant to Section 3 or Section 4 (or otherwise) is
effective, if any Shareholder delivers a notice to the Company (each, a
“Take-Down Notice”) stating that it intends to sell all or part of its
Registrable Securities included by it on the shelf Registration Statement (each,
a “Shelf Offering”), then the Company shall amend or supplement the shelf
Registration Statement as may be necessary in order to enable such Registrable
Securities to be distributed pursuant to the Shelf Offering. In connection with
any Shelf Offering, including any Shelf Offering that is an underwritten
offering (including a Marketed Offering):

 

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(i) such proposing holder(s) shall also deliver the Take-Down Notice to all
other holders of Registrable Securities included on such shelf Registration
Statement and permit each such holder to include its Registrable Securities
included on the shelf Registration Statement in the Shelf Offering if such
holder notifies the proposing holder(s) and the Company within five (5) days
after delivery of the Take-Down Notice to such holder; and

(ii) if the Shelf Offering is underwritten, in the event that the managing
underwriter(s) of such Shelf Offering advise such holders in writing that it is
their good faith opinion the total number or dollar amount of securities
proposed to be sold exceeds the total number or dollar amount of such securities
that can be sold without having an adverse effect on the price, timing or
distribution of the Registrable Securities to be included, then the managing
underwriter(s) may limit the number of Registrable Securities which would
otherwise be included in such Shelf Offering in the same manner as described in
Section 3(c) with respect to a limitation of shares to be included in a
registration;

provided, however, that each Shelf Offering that is an underwritten offering
initiated by a Shareholder shall be deemed to be a demand subject to the
provisions of Section 3(b) (subject to Section 3(e)), and shall decrease by one
the number of Demand Notices the Shareholders are entitled to pursuant to
Sections 3(f)(i) and 3(f)(ii), as applicable.

Section 5. Restrictions on Public Sale by Holders of Registrable Securities.

(a) If any registration pursuant to Section 3 or Section 4 of this Agreement
shall be in connection with any: (i) Marketed Offering (including with respect
to a Shelf Offering pursuant to Sections 3(a) or 4(c) hereof), the Company will
cause each of its executive officers and directors to sign a customary “lock-up”
agreement containing provisions consistent with those contemplated pursuant to
Section 5(b); or (ii) underwritten offering (including with respect to a Shelf
Offering pursuant to Sections 3(a) or 4(c) hereof), the Company will also not
effect any public sale or distribution of any common equity (or securities
convertible into or exchangeable or exercisable for common equity) (other than a
registration statement (A) on Form S-4, Form S-8 or any successor forms thereto
or (B) filed solely in connection with an exchange offer or any employee benefit
or dividend reinvestment plan) for its own account, within ninety (90) days
after the date of the Prospectus (or Prospectus supplement if the offering is
made pursuant to a shelf Registration Statement) for such offering except as may
otherwise be agreed with the holders of the Registrable Securities in such
offering.

(b) Each Shareholder agrees, in connection with any underwritten offering made
pursuant to a Registration Statement filed pursuant to Section 3 or Section 4,
as applicable, that, if requested in writing by the managing underwriter or
underwriters in such offering, it will not (i) subject to customary exceptions,
effect any public sale or distribution of any of the Company’s securities
(except as part of such underwritten offering), including a sale pursuant to
Rule 144 or any swap or other economic arrangement that transfers to another
Person any of the economic consequences of owning Common Stock, or (ii) give any
Demand Notice during the period

 

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commencing on the date of the Prospectus pursuant to which such underwritten
offering may be made and continuing for not more than thirty (30) days after the
date of such Prospectus (or Prospectus supplement if the offering is made
pursuant to a shelf Registration Statement). In connection with any underwritten
offering made pursuant to a Registration Statement filed pursuant to Section 3
or Section 4, the Company, or, if Shareholders will be selling more Registrable
Securities in the offering than the Company, Shareholders holding a majority of
the Registrable Securities shall be responsible for negotiating all “lock-up”
agreements with the underwriters and, in addition to the foregoing provisions of
this Section 5, the Shareholders agree to execute the form so negotiated;
provided that the form so negotiated is reasonably acceptable to the Company or
the Shareholders, as applicable, and consistent with the agreement set forth in
this Section 5 and that the Company’s executive officers and directors shall
also have executed a form of agreement substantially similar to the agreement so
negotiated, as applicable, subject to customary exceptions applicable to natural
persons.

Section 6. Registration Procedures. If and whenever the Company is required to
effect the registration of any Registrable Securities under the Securities Act
as provided in Section 3 or Section 4, the Company shall use its reasonable best
efforts to effect such registration to permit the sale of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Company shall cooperate in the sale of the
securities and shall use its reasonable best efforts, as promptly as practicable
to the extent applicable, to:

(a) prepare and file with the SEC a Registration Statement or Registration
Statements on such form as shall be available for the sale of the Registrable
Securities by the holders thereof or by the Company in accordance with the
intended method or methods of distribution thereof and in accordance with this
Agreement, and use its reasonable best efforts to cause such Registration
Statement to become effective and to remain effective as provided herein;
provided, however, that, before filing a Registration Statement or Prospectus or
any amendment or supplement thereto (including documents that would be
incorporated or deemed to be incorporated therein by reference, except to the
extent that such documents shall have previously been filed with or furnished to
the SEC), the Company shall furnish or otherwise make available to counsel for
the holders of the Registrable Securities covered by such Registration Statement
(who may share such documents with their clients) and the managing underwriters,
if any, copies of all such documents proposed to be filed, which documents will
be subject to the reasonable review and comment of such counsel, and such other
documents reasonably requested by such counsel, including any comment letter
from the SEC, and, if requested by such counsel, provide such counsel reasonable
opportunity to participate in the preparation of such Registration Statement and
each Prospectus included therein and such other opportunities to conduct a
reasonable investigation within the meaning of the Securities Act, including
reasonable access to the Company’s books and records, officers, accountants and
other advisors; provided that nothing in this Section 6(a) is intended to effect
any waiver of the Company’s attorney-client or other legal privilege. The
Company shall not file any such Registration Statement or Prospectus or any
amendment or supplement thereto (including such documents that, upon filing,
would be incorporated or deemed to be incorporated by reference therein, except
to the extent that such documents shall have previously been filed with or
furnished to the SEC) with respect to a Demand Registration to which the holders
of a majority of the Registrable Securities covered by such Registration
Statement, their counsel, or the managing underwriters, if any, shall reasonably
object, in writing, on a timely basis, unless, in the opinion of the Company’s
counsel, such filing is necessary to comply with applicable law;

 

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(b) prepare and file with the SEC such amendments and post-effective amendments
to each Registration Statement as may be necessary to keep such Registration
Statement continuously effective during the period provided herein and comply in
all material respects with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration Statement; and
cause the related Prospectus to be supplemented by any Prospectus supplement as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of the securities covered by such Registration
Statement, and as so supplemented to be filed pursuant to Rule 424 of the
Securities Act;

(c) notify counsel to each selling holder of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such Person or
such selling holder) confirm such notice in writing, (i) when a Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and, with
respect to a Registration Statement or any post-effective amendment, when the
same has become effective (if such Registration Statement is not an Automatic
Shelf Registration Statement), (ii) of any request by the SEC or any other
federal or state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceeding for that
purpose, (iv) if at any time the Company has reason to believe that the
representations and warranties of the Company contained in any agreement
(including any underwriting agreement) contemplated by Section 6(n) below cease
to be true and correct, (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any jurisdiction,
or the initiation or threatening of any proceeding for such purpose, and (vi) if
the Company has knowledge of the happening of any event that makes any statement
made in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires the making of any change in such Registration
Statement, Prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, not misleading, and that, in the case of the Prospectus,
it will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (which notice shall
notify the selling Shareholders only of the occurrence of such an event and
shall provide no additional information regarding such event to the extent such
information would constitute material non-public information);

(d) prevent the issuance or obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction at the earliest date reasonably
practicable;

(e) if requested by the managing underwriters, if any, or the holders of a
majority of the then-issued and outstanding Registrable Securities being sold in
connection with an underwritten offering, promptly include in a Prospectus
supplement or post-effective amendment to the applicable Registration Statement
such information as the managing underwriters, if any, and such holders may
reasonably request in order to permit the intended method of distribution of
such securities and make all required filings of such Prospectus supplement or
such post-effective amendment as soon as practicable after the Company has
received such request; provided, however, that the Company shall not be required
to take any action under this Section 6(e) that is not, in the opinion of
counsel for the Company, in compliance with applicable law;

 

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(f) furnish or make available to counsel for each selling holder of Registrable
Securities and each managing underwriter, if any, without charge, at least one
conformed copy of the Registration Statement, the Prospectus and Prospectus
supplements, if applicable, and each post-effective amendment thereto, including
financial statements (but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference, and all exhibits, unless
requested in writing by such counsel, the holder such counsel represents or such
underwriter); provided that the Company may furnish or make available any such
document in electronic format;

(g) deliver to each selling holder of Registrable Securities, its counsel, and
the underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of Prospectus) and each amendment or
supplement thereto as such Persons may reasonably request from time to time in
connection with the distribution of the Registrable Securities; provided that
the Company may furnish or make available any such document in electronic format
(other than, in the case of a Marketed Offering, upon the request of the
managing underwriters thereof for printed copies of any such Prospectus or
Prospectuses); and the Company, subject to the last paragraph of this Section 6,
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling holders of Registrable Securities and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any such amendment or
supplement thereto;

(h) prior to any Public Offering of Registrable Securities, register or qualify
or cooperate with the selling holders of Registrable Securities, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or “blue sky” laws of such jurisdictions within the United States as
any seller or underwriter reasonably requests in writing and to keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective pursuant to
this Agreement and to take any other action that may be necessary or advisable
to enable such holders of Registrable Securities to consummate the disposition
of such Registrable Securities in such jurisdiction; provided, however, that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Agreement or (ii) take any action that would subject it to taxation or general
service of process in any such jurisdiction where it would not otherwise be
subject but for this Agreement;

(i) cooperate with, and direct the Company’s transfer agent to cooperate with,
the selling holders of Registrable Securities and the managing underwriters, if
any, to facilitate the timely settlement of any offering or sale of Registrable
Securities, including the preparation and delivery of certificates (not bearing
any legend) or book-entry (not bearing stop transfer instructions) representing
Registrable Securities to be sold after receiving written representations from
each holder of such Registrable Securities that the Registrable Securities
represented by the certificates so delivered by such holder will be transferred
in accordance with the Registration Statement and, in connection therewith, if
reasonably required by the Company’s transfer agent,

 

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the Company shall promptly after the effectiveness of the Registration Statement
cause an opinion of counsel as to the effectiveness of any Registration
Statement to be delivered to and maintained with its transfer agent, together
with any other authorization, certificate, or direction required by the transfer
agent that authorizes and directs the transfer agent to issue such Registrable
Securities without restriction upon sale by the holder of such shares of
Registrable Securities under the Registration Statement;

(j) upon the occurrence of, or, if later, the Company’s receipt of knowledge of,
any event contemplated by Section 6(c)(vi) above, prepare a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus (then in effect) or any document incorporated or deemed to be
incorporated therein by reference, or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such that the Registration Statement will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, not
misleading, and the Prospectus will not contain an untrue statement of a
material fact or omit to state 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;

(k) prior to the effective date of the Registration Statement relating to the
Registrable Securities, provide a CUSIP number for the Registrable Securities;

(l) provide and cause to be maintained a transfer agent and registrar for all
Registrable Securities covered by such Registration Statement from and after a
date not later than the effective date of such Registration Statement;

(m) cause all shares of Registrable Securities covered by such Registration
Statement to be listed on a national securities exchange if shares of the
particular class of Registrable Securities are at that time listed on such
exchange, as the case may be, prior to the effectiveness of such Registration
Statement;

(n) enter into such agreements (including underwriting agreements in form, scope
and substance as is customary in underwritten offerings and such other documents
reasonably required under the terms of such underwriting agreements, including
customary legal opinions and auditor “comfort” letters) and take all such other
actions reasonably requested by the holders of a majority of the Registrable
Securities being sold in connection therewith (including those reasonably
requested by the managing underwriters, if any) to expedite or facilitate the
disposition of such Registrable Securities;

(o) in connection with a customary due diligence review, make available for
inspection by a representative of the selling holders of Registrable Securities,
any underwriter participating in any such disposition of Registrable Securities,
if any, and any counsel or accountants retained by such selling holders or
underwriter (collectively, the “Offering Persons”), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors and employees of the Company and
its subsidiaries to supply all information and participate in customary due
diligence sessions in each case reasonably requested by any such

 

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Offering Persons in connection with such Registration Statement; provided,
however, that any information that is not generally publicly available at the
time of delivery of such information shall be kept confidential by such Offering
Persons except (i) where disclosure of such information is requested or legally
compelled (in either case pursuant to the terms of a valid and effective
subpoena or order issued by a court of competent jurisdiction or a federal,
state or local governmental or regulatory body or pursuant to a civil
investigative demand or similar judicial process), (ii) where such information
is or becomes generally known to the public other than as a result of a
non-permitted disclosure or failure to safeguard by such Offering Persons in
violation of this Agreement, (iii) where such information (A) was known to such
Offering Persons on a nonconfidential basis (prior to its disclosure by the
Company) from a source other than the Company that, after reasonable inquiry, is
entitled to disclose such information and is not bound by any contractual, legal
or fiduciary obligation of confidentiality to the Company with respect to such
information, (B) was in the possession of the Offering Persons on a
nonconfidential basis prior to its disclosure to the Offering Persons by the
Company or (C) is subsequently developed by the Offering Persons without using
all or any portion of such information or violating any of the obligations of
such Persons under this Agreement or (iv) for disclosure in connection with any
suit, arbitration, claim or litigation involving this Agreement or against any
Offering Person under federal, state or other securities laws in connection with
the offer and sale of any Registrable Securities. In the case of a proposed
disclosure pursuant to (i) (or, unless such Person and the Company are
adversaries in such suit, arbitration, claim or litigation, (iv)) above, such
Person shall be required to give the Company written notice of the proposed
disclosure prior to such disclosure and to cooperate with the Company, at the
Company’s cost, in any effort the Company undertakes to obtain a protective
order or other remedy. In the event that such protective order or other remedy
is not obtained, or that the Company waives compliance with this provision, the
Offering Persons will furnish only that portion of such information that the
Offering Persons are advised by legal counsel is legally required and will
exercise their reasonable best efforts to obtain an order or other reliable
assurance that confidential treatment will be accorded such information;

(p) cooperate with each seller of Registrable Securities and each underwriter or
agent participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with
FINRA, including the use of reasonable best efforts to obtain FINRA’s
pre-clearance or pre-approval of the Registration Statement and applicable
Prospectus upon filing with the SEC; and

(q) cause its officers and employees to use their respective reasonable best
efforts to support the reasonable marketing of the Registrable Securities
covered by the Registration Statement (including participation in, and
preparation of materials for, any “road show”) in a Marketed Offering.

Each holder of Registrable Securities as to which any registration is being
effected shall promptly furnish to the Company in writing such information
required in connection with such registration regarding such seller and the
distribution of such Registrable Securities as the Company may, from time to
time, reasonably request in writing as a condition for any Registrable
Securities to be included in the applicable registration hereunder. For the
avoidance of doubt, failure of any holder of Registrable Securities to furnish
the Company with such information as requested by the Company pursuant to the
preceding sentence shall relieve the Company of any obligation hereunder to
include the applicable Registrable Securities of such holder in the Registration
Statement with respect to which such information was requested.

 

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Each Shareholder agrees that, upon receipt of any written notice from the
Company of the happening of any event of the kind described in Section 6(c)(ii),
(iii), (iv) or (v), such holder will forthwith discontinue disposition of such
Registrable Securities pursuant to such Registration Statement or Prospectus
until such holder’s receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(j), or until it is advised in writing by
the Company that the use of the applicable Prospectus may be resumed, and has
received copies of any additional or supplemental filing that is incorporated or
deemed to be incorporated by reference in such Prospectus; provided, however,
that the time periods under Section 3 with respect to the length of time that
the effectiveness of a Registration Statement must be maintained shall
automatically be extended by the amount of time the holder is required to
discontinue disposition of such securities.

Section 7. Registration Expenses. All fees and expenses incurred by the Company
and incident to the performance of or compliance with this Agreement by the
Company (including (i) all registration and filing fees (including fees and
expenses with respect to (A) all SEC, stock exchange or trading system and FINRA
registration, listing, filing and qualification and any other fees associated
with such filings, including with respect to counsel for the underwriters and
any qualified independent underwriter in connection with FINRA qualifications,
(B) rating agencies and (C) compliance with securities or “blue sky” laws,
including any reasonable fees and disbursements of counsel for the underwriters
in connection with “blue sky” qualifications of the Registrable Securities
pursuant to Section 6(h)), (ii) fees and expenses of the financial printer,
(iii) messenger, telephone and delivery expenses of the Company, (iv) fees and
disbursements of counsel for the Company, (v) fees and disbursements of all
independent certified public accountants, including the expenses of any special
audits or “comfort letters” required by or incident to such performance and
compliance) and all reasonable fees and expenses of one counsel (together with
any appropriate local counsel(s)) retained by the holders of Registrable
Securities, shall be borne by the Company, whether or not any Registration
Statement is filed or becomes effective. All underwriters’ discounts and selling
commissions, in each case related to Registrable Securities registered in
accordance with this Agreement, shall be borne by the holders of Registrable
Securities included in such registration pro rata among each other on the basis
of the number of Registrable Securities so registered. In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit and the fees and
expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange as required hereunder.

Section 8. Indemnification.

(a) Indemnification by the Company. The Company shall, without limitation as to
time, indemnify and hold harmless, to the fullest extent permitted by law, each
holder of Registrable Securities whose Registrable Securities are covered by a
Registration Statement or Prospectus, its officers, directors, partners and
managing members and each Person who controls each such holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act),
from and against any and all reasonably foreseeable losses, claims, damages,

 

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liabilities, costs (including costs of preparation and reasonable attorneys’
fees and any legal or other fees or expenses actually incurred by such party in
connection with any investigation or Proceeding), expenses, judgments, fines,
penalties, charges and amounts paid in settlement (collectively, “Losses”), as
incurred, in each case arising out of or based upon any untrue statement (or
alleged untrue statement) of a material fact contained in any Registration
Statement, Prospectus, offering circular, any amendments or supplements thereto,
“issuer free writing prospectus” (as such term is defined in Rule 433 of the
Securities Act) or other document (including any related Registration Statement,
notification, or the like or any materials prepared by or on behalf of the
Company as part of any “road show” (as defined in Rule 433(h) of the Securities
Act)) incident to any such registration, qualification, or compliance, or based
on any omission (or alleged omission) to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of the Securities Act, the Exchange Act, any
state securities law, or any rule or regulation thereunder applicable to the
Company and (without limitation of the preceding portions of this Section 8(a))
will reimburse each such holder, each of its officers, directors, partners and
managing members and each Person who controls each such holder, for any
reasonable and documented out-of-pocket legal and any other expenses actually
incurred in connection with investigating and defending or, subject to the last
sentence of this Section 8(a), settling any such Loss or action; provided that
the Company will not be liable in any such case to the extent that any such Loss
arises out of or is based on any untrue statement or omission by such holder,
but only if such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such Registration Statement, Prospectus, offering
circular, or other document in reliance upon and in conformity with written
information regarding such holder of Registrable Securities furnished to the
Company by such holder of Registrable Securities or its authorized
representatives expressly for inclusion therein. It is agreed that the indemnity
agreement contained in this Section 8(a) shall not apply to amounts paid in
settlement of any such Loss or action if such settlement is effected without the
prior written consent of the Company (which consent shall not be unreasonably
withheld).

(b) Indemnification by Holder of Registrable Securities. In connection with any
Registration Statement in which a holder of Registrable Securities is
participating, each such holder of Registrable Securities shall indemnify, to
the fullest extent permitted by law, severally and not jointly with any other
participating holder of Registrable Securities, the Company, its officers,
directors and managing members and each Person who controls the Company (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act) against all Losses arising out of or based on any untrue statement of a
material fact contained in such Registration Statement, Prospectus, offering
circular, any amendments or supplements thereto, “issuer free writing
prospectus” (as such term is defined in Rule 433 of the Securities Act) or other
document, or any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and to
reimburse the Company or such officers, directors, managing members and control
persons for any reasonable and documented out-of-pocket legal or any other
expenses actually incurred in connection with investigating or defending any
such Loss or action, subject to the immediately following proviso, settling any
such Loss or action, in each case to the extent, but only to the extent, that
such untrue statement or omission is made in such Registration Statement,
Prospectus, offering circular, any amendments or supplements thereto, “issuer
free writing prospectus” (as such term is defined in Rule 433 of the Securities
Act) or other document in reliance upon and in conformity with written
information regarding such holder of Registrable Securities furnished to the
Company by such holder of Registrable Securities or its

 

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authorized representatives expressly for inclusion therein; provided, however,
that the foregoing obligations shall not apply to amounts paid in settlement of
any such Losses (or actions in respect thereof) if such settlement is effected
without the consent of such holder (which consent shall not be unreasonably
withheld); and provided, further, that the liability of such holder of
Registrable Securities shall be limited to the net proceeds received by such
selling holder from the sale of Registrable Securities covered by such
Registration Statement.

(c) Conduct of Indemnification Proceedings. If any Person shall be entitled to
indemnification hereunder (each, an “Indemnified Party”), such Indemnified Party
shall give prompt notice to the party from which such indemnity is sought (each,
an “Indemnifying Party”) of any claim or of the commencement of any Proceeding
with respect to which such Indemnified Party seeks indemnification or
contribution pursuant hereto; provided, however, that the delay or failure to so
notify the Indemnifying Party shall not relieve the Indemnifying Party from any
obligation or liability except to the extent that the Indemnifying Party has
been materially prejudiced by such delay or failure. The Indemnifying Party
shall have the right, exercisable by giving written notice to an Indemnified
Party promptly after the receipt of written notice from such Indemnified Party
of such claim or Proceeding, to, unless in the Indemnified Party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, assume, at the Indemnifying Party’s
expense, the defense of any such claim or Proceeding, with counsel reasonably
satisfactory to such Indemnified Party; provided, however, that an Indemnified
Party shall have the right to employ separate counsel in any such claim or
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless:
(i) the Indemnifying Party agrees to pay such fees and expenses; or (ii) the
Indemnifying Party fails promptly to assume, or in the event of a conflict of
interest cannot assume, the defense of such claim or Proceeding or fails to
employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding, in which case the Indemnified Party shall have the right to employ
separate counsel and to assume the defense of such claim or proceeding at the
Indemnifying Party’s expense; provided, further, however, that the Indemnifying
Party shall not, in connection with any one such claim or Proceeding or separate
but substantially similar or related claims or Proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one firm of attorneys (together
with appropriate local counsel) at any time for all of the Indemnified Parties.
Whether or not such defense is assumed by the Indemnifying Party, such
Indemnifying Party will not be subject to any liability for any settlement made
without its consent (but such consent will not be unreasonably withheld). The
Indemnifying Party shall not consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release, in form and
substance reasonably satisfactory to the Indemnified Party, from all liability
in respect of such claim or litigation for which such Indemnified Party would be
entitled to indemnification hereunder. All fees and expenses of the Indemnified
Party (including reasonable fees and expenses to the extent incurred in
connection with investigating or preparing to defend such proceeding in a manner
not inconsistent with this Section 8) shall be paid to the Indemnified Party, as
incurred, promptly upon receipt of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification under this
Section 8).

 

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(d) Contribution. If the indemnification provided for in this Section 8 is
unavailable to an Indemnified Party in respect of any Losses (other than in
accordance with its terms), then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party, on
the one hand, and such Indemnified Party, on the other hand, in connection with
the actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party, on the one hand, and Indemnified Party, on the other hand, shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made (or omitted) by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 8(d), an Indemnifying Party that
is a selling holder of Registrable Securities shall not be required to
contribute any amount in excess of the amount by which the total net proceeds
received by such holder from the sale of the Registrable Securities giving rise
to such contribution obligation and sold by such holder exceeds the amount of
any damages that such holder has otherwise been required to pay by reason of the
applicable action, statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The obligations of the holders of Registrable
Securities to contribute pursuant to this Section are several and not joint.

(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.

Section 9. Rule 144. The Company shall use reasonable best efforts to: (i) file
the reports required to be filed by it under the Securities Act and the Exchange
Act in a timely manner, to the extent required from time to time to enable all
holders to sell Registrable Securities without registration under the Securities
Act within the limitations of the exemption provided by Rule 144; and (ii) so
long as any Registrable Securities are issued and outstanding, furnish holders
thereof upon request (A) a written statement by the Company as to its compliance
with the reporting requirements of Rule 144 and of the Exchange Act and (B) a
copy of the most recent annual or quarterly report of the Company (except to the
extent the same is available on EDGAR).

Section 10. Underwritten Registrations. In connection with any underwritten
offering, the investment banker or investment bankers and managers shall be
selected by the Shareholders holding the majority of Registrable Securities
included in any Demand Registration, including any Shelf Offering, initiated by
such Shareholders, subject to the reasonable satisfaction of the Company.

 

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Section 11. Miscellaneous.

(a) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may be given by,
but only with, the written consent of the Shareholders holding a majority of the
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other holders of Registrable Securities may
be given by holders of at least a majority of the Registrable Securities being
sold by such holders pursuant to such Registration Statement.

(b) Notices. All notices required to be given hereunder shall be in writing and
shall be deemed to be duly given if personally delivered, telecopied and
confirmed, emailed and confirmed or mailed by registered or certified mail,
return receipt requested, or recognized overnight delivery service with proof of
receipt maintained, at the following address (or any other address that any such
party may designate by written notice to the other parties): If to the Company,
to the address of its principal executive offices, addressed to the attention of
its General Counsel (email: GenCouns@Catalent.com). If to any Shareholder, at
such Shareholder’s address as set forth on the records of the Company or such
other address as such Shareholder notifies the Company in writing. Any such
notice shall, if delivered personally, be deemed received upon delivery; shall,
if delivered by telecopy or email, be deemed received on the first Business Day
following confirmation; shall, if delivered by overnight delivery service, be
deemed received the first Business Day after being sent; and shall, if delivered
by mail, be deemed received upon the earlier of actual receipt thereof or five
(5) Business Days after the date of deposit in the United States mail.

(c) Successors and Assigns; Shareholder Status. This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns of each
of the parties, including subsequent holders of Registrable Securities acquired,
directly or indirectly, from the Shareholders in compliance with any
restrictions on transfer or assignment; provided, however, that (x) the Company
may not assign this Agreement (in whole or in part) without the prior written
consent of the holders of a majority of the Registrable Securities and (y) such
successor or assign shall not be entitled to such rights unless the successor or
assign shall have executed and delivered to the Company an Addendum Agreement
substantially in the form of Exhibit A hereto promptly following the acquisition
of such Registrable Securities (including the provision of an address, which the
Company may use as the Shareholder’s notice address for purposes of
Section 11(b) unless such address is changed in accordance with such Section by
notice); provided, further, that a Shareholder may only assign its rights and
obligations under this Agreement upon written notice to the Company (i) if such
assignment is in connection with (A) a transfer or sale of all or substantially
all of the Registrable Securities held by such Shareholder or (B) a transfer or
sale of at least 25.0% of the shares of Registrable Securities sold to the
Shareholder on the Closing Date on an “as converted basis” or (ii) to any of its
partners, members, equityholders or Affiliates or one or more private equity
funds sponsored or managed by an Affiliate.

(d) Counterparts. This Agreement may be executed in two or more counterparts and
delivered by facsimile, pdf or other electronic transmission with the same
effect as if all signatory parties had signed and delivered the same original
document, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

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(e) Headings; Construction. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Unless the context requires
otherwise: (i) pronouns in the masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa; (ii) the term “including” shall
be construed to be expansive rather than limiting in nature and to mean
“including, without limitation,”; (iii) references to sections and paragraphs
refer to sections and paragraphs of this Agreement; (iv) the words “this
Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar
import refer to this Agreement as a whole, including Exhibit A hereto, and not
to any particular subdivision unless expressly so limited; (v) unless otherwise
specified, the term “days” shall mean calendar days; (vi) a “percentage” (or a
“majority”) of the Registrable Securities (or, where applicable, any class of
securities) shall be determined based on the number of shares of such
securities; and (vii) unless otherwise provided, the currency for all dollar
figures included in this Agreement shall be the US Dollar.

(f) Governing Law. This Agreement (and any claim or controversy arising out of
or relating to this Agreement) shall be governed by and construed in accordance
with, the laws of the State of New York.

(g) 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 reasonable best 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.

(h) Entire Agreement. This Agreement, that certain Confidentiality Agreement,
dated as of January 2, 2019, by and between Catalent Pharma Solutions, LLC and
Leonard Green & Partners, L.P., that certain Stockholders’ Agreement, dated as
of the date hereof, by and between the Company and the Purchaser (the
“Stockholders’ Agreement”) and the Investment Agreement are intended by the
parties as a final expression of their agreement, and are intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein, with respect to the
registration rights granted by the Company with respect to Registrable
Securities. This Agreement, together with the Investment Agreement and the
Stockholders’ Agreement, supersedes all prior agreements and understandings
between the parties with respect to such subject matter. Notwithstanding the
foregoing, this Agreement shall not supersede the transfer restrictions in the
Stockholders’ Agreement.

 

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(i) Securities Held by the Company or its Subsidiaries. Whenever the consent or
approval of holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its
subsidiaries shall not be counted in determining whether such consent or
approval was given by the holders of such required percentage.

(j) Specific Performance; Further Assurances. The parties hereto recognize and
agree that money damages may be insufficient to compensate the holders of any
Registrable Securities for breaches by the Company of the terms hereof and,
consequently, that the equitable remedy of specific performance of the terms
hereof will be available in the event of any such breach. The parties hereto
agree that in the event the registrations and sales of Registrable Securities
are effected pursuant to the laws of any jurisdiction outside of the United
States, such parties shall use their respective reasonable best efforts to give
effect as closely as possible to the rights and obligations set forth in this
Agreement, taking into account customary practices of such foreign jurisdiction,
including executing such documents and taking such further actions as may be
reasonably necessary in order to carry out the foregoing.

(k) Term; Other Agreements. This Agreement shall terminate with respect to a
Shareholder on the date on which such Shareholder ceases to hold Registrable
Securities; provided that such Shareholder’s rights and obligations pursuant to
Section 8, as well as the Company’s obligations to pay expenses pursuant to
Section 7, shall survive with respect to any Registration Statement in which any
Registrable Securities of such Shareholders were included. From and after the
date of this Agreement, the Company shall not, without the consent of the
Shareholders holding a majority of the Registrable Securities, enter into any
agreement with any Person, including any holder or prospective holder of any
securities of the Company, giving any registration rights (i) the terms of which
are more favorable than, senior to or conflict with, the registration rights
granted to the Shareholders hereunder or (ii) permitting such Person to exercise
a demand registration right during the period expiring on the second anniversary
of the date hereof; provided that the Company may enter into an agreement
granting such rights if such agreement provides the Shareholders with piggyback
rights consistent with those granted to the Shareholders pursuant to Section 4,
and, if such agreement contains any underwriter cutbacks consistent with
Section 4(b), then the Shareholders shall participate with such other holders on
a pro rata basis; and provided, further, that the Company may enter into an
agreement granting such demand rights in connection with the issuance of
securities of the Company pursuant to (i) a bona fide material acquisition,
disposition or other similar transaction involving the Company or any of its
Subsidiaries, (ii) an exchange of indebtedness of the Company into equity and
(iii) a proposed resale of convertible securities of the Company by any holder
thereof, in each case, to the extent that the entering into of such an agreement
is customary in a transaction of the type contemplated.

(l) Consent to Jurisdiction; Waiver of Jury Trial. The parties hereto hereby
irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the courts of the State of New York located in New York County and the
federal courts of the United States of America located in New York County, and
the appropriate appellate courts therefrom for any actions, suits or proceedings
arising out of or relating to this Agreement and the transactions contemplated
hereby; provided, however, that any judgment in any such suit, action or
proceeding may be enforced in any court with jurisdiction over the subject
matter. The parties hereto hereby irrevocably and unconditionally consent to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such action, suit or proceeding and irrevocably waive, to the

 

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fullest extent permitted by law, any objection that they may now or hereafter
have to the laying of the venue of any such action, suit or proceeding in any
such court or that any such action, suit or proceeding which is brought in any
such court has been brought in an inconvenient forum. Process in any such
action, suit or proceeding may be served on any party anywhere in the world,
whether within or without the jurisdiction of any such court.

Each of the parties hereto hereby consents to process being served by any party
to this Agreement in any suit, action, or proceeding of the nature specified in
the paragraph above by the mailing of a copy thereof in the manner specified by
the provisions of Section 11(b).

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
AGREEMENT.

(m) Interpretation. Wherever required by the context of this Agreement, the
singular shall include the plural and vice versa, and the masculine gender shall
include the feminine and neuter genders and vice versa, and references to any
agreement, document or instrument shall be deemed to refer to such agreement,
document or instrument as amended, supplemented or modified from time to time.
All article, section, paragraph or clause references not attributed to a
particular document shall be references to such parts of this Agreement, and all
exhibit, annex, letter and schedule references not attributed to a particular
document shall be references to such exhibits, annexes, letters and schedules to
this Agreement. In addition, the following terms are ascribed the following
meanings:

(i) the word “or” is not exclusive;

(ii) the words “including,” “includes,” “included” and “include” are deemed to
be followed by the words “without limitation”;

(iii) the terms “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision;

(iv) the term “Business Day” shall mean a day that is a Monday, Tuesday,
Wednesday, Thursday or Friday and is not a day on which banking institutions in
New York, New York, generally are authorized or obligated by law to close; and

(v) references to sections of, or rules under, the Securities Act shall be
deemed to include substitute, replacement or successor sections or rules adopted
by the SEC from time to time.

 

23

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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed as of the date first above written.

 

CATALENT, INC.

By:

 

 

 

Name:

 

Title:

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

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

GREEN EQUITY INVESTORS VII, L.P.

By: GEI Capital VII, LLC, its General Partner

By:

 

                     

Name:

Title:

GREEN EQUITY INVESTORS SIDE VII, L.P.

By: GEI Capital VII, LLC, its General Partner

By:

 

            

Name:

Title:

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

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EXHIBIT A

ADDENDUM AGREEMENT

This Addendum Agreement (this “Addendum Agreement”) is made this [•] day of [•],
20[•], by and between [•], a [•] (the “New Shareholder”) and Catalent, Inc., a
Delaware corporation (the “Company”), pursuant to a Registration Rights
Agreement dated as of [•], 2019 (the “Agreement”), by and among the Company,
Green Equity Investors VII, L.P., a Delaware limited partnership, and Green
Equity Investors Side VII, L.P., a Delaware limited partnership. Capitalized
terms used herein but not otherwise defined herein shall have the meanings
ascribed to them in the Agreement.

W I T N E S S E T H:

WHEREAS, the Company has agreed to provide registration rights with respect to
the Registrable Securities on the terms and subject to the conditions set forth
in the Agreement; and

WHEREAS, the New Shareholder has acquired the number and type of Registrable
Securities specified below directly or indirectly from a Shareholder in
accordance with the Agreement and all applicable law;

WHEREAS, the Company and the Shareholders have required in the Agreement that
all Persons desiring registration rights pursuant to the Agreement must enter
into an Addendum Agreement binding the New Shareholder to the Agreement to the
same extent as if it were an original party thereto; and

WHEREAS, the New Shareholder has caused this Addendum Agreement to be executed
by a duly authorized individual.

NOW, THEREFORE, in consideration of the premises recited above and intending to
be bound, the New Shareholder acknowledges that it has received and read the
Agreement and that the New Shareholder shall be bound by, and shall have the
benefit of, all of the terms and conditions set out in the Agreement to the same
extent as if it were an original party to the Agreement (or as otherwise
provided therein) and shall be deemed to be a Shareholder thereunder. The
Company may rely on the foregoing acknowledgement without further inquiry and is
relieved of any liability for such reliance.

 

[Name of New Shareholder]

By:

 

                     

Name:

Title:

Registrable Securities:

Type:                                                  

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

Number:

 

 

Notice Address:

 

 

 

Attn:

 

 

Facsimile:

 

 

Email:

 

 

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SCHEDULE C

Form of Stockholders’ Agreement

[See Attached]

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

SCHEDULE C

 

 

 

STOCKHOLDERS’ AGREEMENT

by and among

CATALENT, INC.,

GREEN EQUITY INVESTORS VII, L.P.

and

GREEN EQUITY INVESTORS SIDE VII, L.P.

Dated as of [•], 2019

 

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I GOVERNANCE

     1  

1.1

 

Board of Directors

     1  

1.2

 

Voting

     5  

ARTICLE II OTHER COVENANTS

     5  

2.1

 

Information Rights

     5  

2.2

 

Standstill

     6  

2.3

 

Transfer Restrictions

     8  

ARTICLE III REPRESENTATIONS AND WARRANTIES

     10  

3.1

 

Representations and Warranties of the Stockholders

     10  

3.2

 

Representations and Warranties of the Company

     10  

ARTICLE IV DEFINITIONS

     11  

4.1

 

Defined Terms

     11  

4.2

 

Terms Generally

     15  

ARTICLE V MISCELLANEOUS

     15  

5.1

 

Term

     15  

5.2

 

Amendments and Waivers

     15  

5.3

 

Successors and Assigns

     16  

5.4

 

Confidentiality

     16  

5.5

 

Severability

     17  

5.6

 

Counterparts

     17  

5.7

 

Entire Agreement

     17  

5.8

 

Governing Law; Jurisdiction

     17  

5.9

 

WAIVER OF JURY TRIAL

     18  

5.10

 

Specific Performance

     18  

5.11

 

No Third-Party Beneficiaries

     18  

5.12

 

Notices

     18  

5.13

 

Corporate Opportunities

     19  

 

i

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STOCKHOLDERS’ AGREEMENT, dated as of [•], 2019 (as may be amended from time to
time, this “Agreement”), by and among Catalent, Inc., a Delaware corporation
(the “Company”), and each of Green Equity Investors VII, L.P., a Delaware
limited partnership (“Fund VII”), and Green Equity Investors Side VII, L.P., a
Delaware limited partnership (“Fund Side VII” and, together with Fund VII, the
“Initial Stockholder”). The obligations of the Initial Stockholder set forth in
this Agreement shall be several and not joint among Fund VII and Fund Side VII
and apportioned in percentages of 45.83720% and 54.16280%, respectively.

W I T N E S S E T H:

WHEREAS, the Company and the Initial Stockholder have entered into an Equity
Commitment and Investment Agreement, dated as of April 14, 2019 (as may be
amended from time to time, the “Investment Agreement”), pursuant to which, among
other things, the Company is issuing to the Initial Stockholder shares of Series
A Preferred Stock;

WHEREAS, simultaneously with the execution and delivery of this Agreement by the
parties, the Company and the Initial Stockholder have entered into a
Registration Rights Agreement, dated as of [•], 2019 (as may be amended from
time to time, the “Registration Rights Agreement”), pursuant to which, among
other things, the Company grants the Initial Stockholder certain registration
and other rights with respect to the shares of Series A Preferred Stock and the
shares of Common Stock issued upon any conversion or redemption of shares of
Series A Preferred Stock; and

WHEREAS, each of the parties wishes to set forth in this Agreement certain terms
and conditions regarding ownership of the Securities;

NOW, THEREFORE, in consideration of circumstances recited above and the mutual
covenants, representations, warranties and agreements contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:

ARTICLE I

GOVERNANCE

1.1 Board of Directors.

(a) Effective as of the Closing, the board of directors of the Company (the
“Board”) will (i) increase the size of the Board to eleven (11) members and the
Board shall appoint Peter Zippelius to the Board to serve for a term expiring at
the next annual general meeting of the Company’s stockholders following his
appointment and until his successor is duly elected and qualified, or, if
earlier, his death, resignation, retirement or removal from office, and
(ii) acknowledge and affirm that John Baumer shall, for so long as the Majority
Approved Holders have the right to designate a non-voting observer to the Board
pursuant to Section 1.1(e), be a non-voting observer to the Board entitled to
the rights and subject to the obligations set forth in this Agreement until his
successor is duly appointed or, if earlier, his death or relinquishment of such
position.

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(b) For so long as the Approved Holders beneficially own (i) shares of Series A
Preferred Stock with an aggregate Stated Value of at least $250,000,000, or
(ii) either (A) shares of Common Stock having an aggregate value of at least
$250,000,000, calculated by valuing each share of Common Stock at the 30-Day
VWAP of one share of Common Stock as of the measurement date (the “Common Stock
Valuation”), or (B) any combination of shares of Series A Preferred Stock or
shares of Common Stock having an aggregate value of at least $250,000,000,
calculated by valuing each share of Series A Preferred Stock at the Stated Value
of such share of Series A Preferred Stock and each share of Common Stock at the
Common Stock Valuation, the Majority Approved Holders shall have the right to
designate one (1) designee to be nominated by the Company for election
(including in accordance with Section (C) of Article VI of the Company’s
Certificate of Designation of Series A Convertible Preferred Stock (the “Series
A Certificate”), if applicable), to the Board; provided that such designee is
(A) a partner of Leonard Green & Partners, L.P. and reasonably acceptable to the
Company, which approval shall not be unreasonably withheld, or (B) acceptable to
the Company in its sole discretion. At any time that none of the thresholds set
forth in this Section 1.1(b) is satisfied, the designee shall, and the Majority
Approved Holders shall cause such designee to, promptly offer to resign from the
Board (and any committee of the Board of which such designee is then a member)
in a writing submitted to the Nominating and Corporate Governance Committee of
the Board (or any successor committee, however denominated).

(c) For so long as the Majority Approved Holders have the right to designate a
director for nomination pursuant to Section 1.1(b), the Board shall include such
designee in the slate of nominees to be elected or appointed to the Board at the
next annual or special meeting of stockholders of the Company at which directors
are to be elected or appointed and each subsequent such meeting, except such
meetings for the purpose of filling vacancies or newly created directorships
(other than a vacancy to be filled by a designee selected by the Majority
Approved Holders) (including pursuant to Section (C) of Article VI of the Series
A Certificate, if applicable), in each case, subject to (i) such designee’s
satisfaction of all applicable requirements regarding service as a director of
the Company under (A) NYSE rules (or the rules of the principal market on which
shares of Common Stock are then listed) regarding service as a director, and
(B) Applicable Law, (ii) such designee having not been involved in any of the
events enumerated under Items 2(d) or 2(e) of Schedule 13D pursuant to
Regulation 13D-G under the Exchange Act or Item 401(f) of Regulation S-K under
the Securities Act, and (iii) such designee’s satisfaction of all such other
criteria and qualifications for service as a director applicable to all
directors of the Company as in effect on the date thereof; provided, however,
that in no event shall any such designee’s relationship with the Approved
Holders or their Affiliates (or any other actual or potential lack of
independence resulting therefrom), in and of itself, be considered to disqualify
such designee from being a nominee or member of the Board pursuant to this
Section 1.1.

(d) For so long as the Majority Approved Holders have the right to designate a
director for nomination pursuant to Section 1.1(b):

(i) the Company or the Board shall (A) to the extent necessary cause the Board
to have a vacancy to permit such Person to be added as a member of the Board,
(B) nominate such Person for election to the Board in accordance with
Section 1.1(c), and (C) to the extent that a vote of the Company’s stockholders
shall be required, recommend that the Company’s stockholders vote in favor of
the Person designated for nomination by the Majority Approved

 

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Holders pursuant to Section 1.1(b). In the event of the death, resignation,
retirement, disqualification, disability or removal of any Person designated by
the Majority Approved Holders as a member of the Board, subject to the
continuing satisfaction of the applicable thresholds set forth in
Section 1.1(b), the Majority Approved Holders may designate a Person satisfying
the criteria and qualifications set forth in Section 1.1(c) to replace such
Person, and the Company shall cause such newly designated Person to fill such
resulting vacancy. So long as any Person designated by the Majority Approved
Holders as a member of the Board is eligible to be so designated in accordance
with this Section 1.1, the Company shall not take any action to remove such
Person as a director without cause without the prior written consent of the
Majority Approved Holders;

(ii) the Majority Approved Holders’ designee for the Board shall have the rights
and obligations of a director of the Company, including the right to (A) attend
all meetings of the Board and all meetings of any committee(s) of the Board, if
any, on which such designee then serves, (B) receive advance notice of each
meeting, including such meeting’s time and place, at the same time and in the
same manner as such notice is provided to the other members of the Board, and
(C) receive copies of all materials, including notices, minutes, consents and
regularly compiled financial and operating data distributed to the other members
of the Board at the same time such materials are distributed to the other
members of the Board;

(iii) the Majority Approved Holders’ designee for the Board shall be bound by
all confidentiality, conflicts of interests, trading, disclosure and other
governance requirements of a director on the Board, as determined by the Board
from time to time;

(iv) the Company shall not, without the prior written approval of the Majority
Approved Holders, (A) increase the size of the Board in excess of thirteen (13),
or (B) decrease the size of the Board if such decrease would require the
resignation of the Majority Approved Holders’ designee from the Board;

(v) the Majority Approved Holders’ designee for the Board shall be entitled to
compensation consistent with the compensation received by other independent
directors of the Board, including any fee or equity award, and reimbursement for
reasonable, out-of-pocket and documented expenses incurred in attending meetings
of the Board and its committees; and

(vi) the Company shall provide the Majority Approved Holders’ designee for the
Board with the same rights to indemnification and advancement and the same
director and officer insurance that it provides to the other members of the
Board.

(e) In addition to the rights conferred on the Majority Approved Holders
pursuant to Sections 1.1(b) - 1.1(d), for so long as the Approved Holders
beneficially own (i) shares of Series A Preferred Stock with an aggregate Stated
Value of at least $500,000,000, or (ii) either (A) shares of Common Stock having
an aggregate value of at least $500,000,000, calculated by valuing each share of
Common Stock at the Common Stock Valuation, or (B) any combination of shares of
Series A Preferred Stock or shares of Common Stock having an aggregate value of
at least $500,000,000, calculated by valuing each share of Series A Preferred
Stock at the Stated Value of such share of Series A Preferred Stock and each
share of Common Stock at the Common Stock Valuation, the Majority Approved
Holders shall have the right to designate one (1) non-

 

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voting observer to the Board, subject to (x) such observer’s satisfaction of all
applicable requirements regarding service as a director of the Company under
(1) NYSE rules (or the rules of the principal market on which the Common Stock
is then listed) regarding service as a director, and (2) Applicable Law,
(y) such observer having not been involved in any of the events enumerated under
Items 2(d) or 2(e) of Schedule 13D under the Exchange Act, or any successor
provision thereto, or Item 401(f) of Regulation S-K under the Securities Act, or
any successor provision thereto, and (z) such observer’s satisfaction of all
such other criteria and qualifications for service as an observer of the Board,
as determined by the Board from time to time reasonably and in good faith;
provided that such observer is (I) a partner of Leonard Green & Partners, L.P.
and reasonably acceptable to the Company, which approval shall not be
unreasonably withheld, or (II) otherwise acceptable to the Company in its sole
discretion. At any time that none of the thresholds set forth in this
Section 1.1(e) is satisfied, all rights of the Majority Approved Holders to
designate an observer to the Board and for any previously designated observer to
observe under this Agreement shall terminate without the requirement of further
action by the Company or any other Person.

(f) For so long as the Majority Approved Holders have the right to designate a
non-voting observer to the Board, such observer to the Board shall have the
right to (i) attend all meetings of the Board (but whose presence shall not be
counted towards the Board’s quorum) and all meetings of any committee(s) of the
Board, if any, on which the Person designated as a director by the Majority
Approved Holders pursuant to Section 1.1(b) then serves (but whose presence
shall not be counted towards any such committee(s)’ quorum), in each case, in a
non-voting observer capacity, (ii) receive advance notice of each meeting,
including such meeting’s time and place, at the same time and in the same manner
as such notice is provided to the members of the Board, and (iii) receive copies
of all materials, including notices, minutes, consents and regularly compiled
financial and operating data distributed to the members of the Board at the same
time as such materials are distributed to the Board; provided, however, (A) the
Company shall have the right to exclude such observer or withhold such
information to the extent such observer’s presence or receipt of such
information could reasonably be expected to result in the loss of
attorney-client privilege or any other privilege or a violation of antitrust,
export control or other Applicable Laws, breach of any confidentiality agreement
or any other adverse consequence to the Company, and (B) that such observer
shall not be entitled to attend the portion of any Board or committee meeting
that constitutes an executive session of the Board or any such committee thereof
that is limited solely to independent directors of the Board and the Company’s
independent auditors or legal counsel, as applicable. The Board observer shall
be bound by all confidentiality, conflicts of interests, trading and disclosure
and other governance requirements of a director on the Board, as determined by
the Board from time to time.

(g) If the Majority Approved Holders have the right to designate a director for
nomination pursuant to Section 1.1(b) and the Majority Approved Holders notify
the Company in writing that the Majority Approved Holders elect or agree not to
designate a director for nomination, then the Majority Approved Holders shall
have the right to instead designate a second non-voting observer to the Board
with the rights set forth in Sections 1.1(e) and 1.1(f).

 

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1.2 Voting. For so long as the Majority Approved Holders have the right to
designate a director for nomination pursuant to Section 1.1(b), at each meeting
of the stockholders of the Company and at every postponement or adjournment
thereof, each Stockholder shall take such action as may be required so that all
of the shares of Series A Preferred Stock or Common Stock beneficially owned,
directly or indirectly, by such Stockholder and entitled to vote at such meeting
of stockholders are voted (i) in favor of each director nominated or recommended
by the Board for election at any such meeting (provided that such nomination is
not inconsistent with Section 1.1(b)), and against the removal of any director
who has been elected following nomination or recommendation by the Board,
(ii) against any stockholder nomination for director that is not approved and
recommended by the Board for election at any such meeting, (iii) in favor of the
Company’s “say-on-pay” proposal and any proposal by the Company relating to
equity compensation that has been approved by the Board or the Compensation &
Leadership Committee of the Board (or any successor committee, however
denominated), (iv) in favor of the Company’s proposal for ratification of the
appointment of the Company’s independent registered public accounting firm, and
(v) in accordance with the recommendation of the Board with respect to any
proposed merger, business combination or similar transaction between the Company
and any other Person, but no Stockholder shall be under any obligation to vote
in the same manner as recommended by the Board or in any other manner, other
than in its sole discretion, with respect to any other matter. In furtherance of
the foregoing, for so long as the Majority Approved Holders have the right to
designate a director for nomination pursuant to Section 1.1(b), each Stockholder
shall take such action as may be required so that such Stockholder is present,
in person or by proxy, at each meeting of the stockholders of the Company and at
every postponement or adjournment thereof so that all of the shares of Series A
Preferred Stock or Common Stock beneficially owned, directly or indirectly, by
such Stockholder may be counted for the purposes of determining the presence of
a quorum and voted in accordance with the terms and conditions of this
Section 1.2.

ARTICLE II

OTHER COVENANTS

2.1 Information Rights.

(a) For so long as the Majority Approved Holders have the right to designate a
director for nomination pursuant to Section 1.1(b), and subject to the terms and
conditions of Section 5.4, the Company shall provide the Approved Holders with:

(i) quarterly financial statements as soon as reasonably practicable after they
become available but no later than forty-five (45) days after the end of each of
the first three quarters of each fiscal year of the Company; provided that this
requirement shall be deemed to have been satisfied if, on or prior to such date,
the Company files its quarterly report on Form 10-Q for the applicable fiscal
quarter with the SEC; and

(ii) audited (by a nationally recognized accounting firm) annual financial
statements as soon as reasonably practicable after they become available but no
later than ninety (90) days after the end of each fiscal year of the Company;
provided that this requirement shall be deemed to have been satisfied if, on or
prior to such date, the Company files its annual report on Form 10-K for the
applicable fiscal year with the SEC,

 

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in each case, prepared in accordance with GAAP as in effect from time to time,
which such financial statements shall include the consolidated balance sheets of
the Company and its Subsidiaries and the related consolidated statements of
operations, income, changes in shareholders’ equity and cash flows. Subject to
reasonable restrictions imposed by the Company to comply with antitrust, export
control and other Applicable Laws, the Company shall permit the Approved Holders
or any authorized representatives designated by the Approved Holders (other than
any Permitted Initial Stockholder LP or authorized representative thereof)
reasonable access to visit and inspect any of the properties of the Company or
any of its Subsidiaries, including its and their books of accounting and other
records, and to discuss its and their affairs, finances and accounts with its
and their officers, all upon reasonable notice and at such reasonable times and
as often as the Approved Holders may reasonably request. Any investigation
pursuant to this Section 2.2 shall be conducted during normal business hours and
in such manner as not to interfere unreasonably with the conduct of the Company
and its Subsidiaries.

(b) For so long as the Majority Approved Holders have the right to designate a
director for nomination pursuant to Section 1.1(b), subject to the terms and
conditions of Section 5.4, the Company shall provide to the Approved Holders
copies of all material written information that is provided to the Board at
substantially the same time at which such information is first delivered or
otherwise made available in writing to the Board; provided, however, that the
Company shall not be required to provide any such information to the extent the
terms and conditions of Section 2.1(c) apply.

(c) Notwithstanding anything to the contrary in this Agreement, neither the
Company nor any of its Subsidiaries shall have any obligation to disclose any
information, other than the financial statements required by Section 2.1(a), to
the extent that (i) such disclosure is prohibited by Applicable Law, or
(ii) such disclosure would reasonably be expected to cause a violation of any
agreement to which the Company or any of its Subsidiaries is a party or would
cause a risk of loss of privilege to the Company or any of its Subsidiaries
(provided that the Company shall use reasonable best efforts to make appropriate
substitute arrangements under circumstances where the restrictions in any of the
foregoing clauses (i) – (ii) of this Section 2.1(c) apply).

2.2 Standstill.

(a) Until the later of (x) the three (3) year anniversary of the Closing, and
(y) the date on which the Majority Approved Holders are no longer entitled to
designate any director for nomination pursuant to Section 1.1 (or have
irrevocably waived their right), each Stockholder agrees that, without the prior
approval of the Board, such Stockholder will not (in its own capacity or with or
through any other Person), directly or indirectly:

(i) acquire, offer or propose to acquire, solicit an offer to sell or agree to
acquire, directly or indirectly, alone or in concert with others, by purchase or
otherwise, any direct or indirect “beneficial ownership” (as defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act) of any securities of the Company or
its Subsidiaries, including shares of Common Stock, any securities convertible
or exchangeable into shares of Common Stock or direct or indirect rights,
warrants or options to acquire, or securities convertible into or exchangeable
for, any voting securities of the Company or any of its Subsidiaries, excluding
any shares of Common Stock or other securities acquired (A) pursuant to a
conversion or redemption of any shares of Series A Preferred Stock, bonus issue,
dividend or distribution by the Company or otherwise acquired pursuant to the
Transaction Documents (as defined in the Investment Agreement), or (B) by a
Person from the Company in connection with such Person’s service as a director
or Board observer;

 

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(ii) except as otherwise expressly provided in this Agreement, make, or in any
way knowingly encourage or participate in, directly or indirectly, alone or in
concert with others, any “solicitation” of “proxies” to vote (as such terms are
used in the proxy rules of the SEC promulgated pursuant to Section 14 of the
Exchange Act), any securities of the Company or any of its Subsidiaries (whether
or not any such vote relates to the election or removal of directors) whether
subject to or exempt from the federal proxy rules, seek to advise or influence
in any manner whatsoever any Person with respect to the voting of any securities
of the Company or any of its Subsidiaries or seek to propose to influence,
advise, change or control the management, board of directors (or similar
governing body), policies, affairs or strategy of the Company or any of its
Subsidiaries by way of any public communication or other communications to their
respective equityholders intended for such purpose;

(iii) except as otherwise expressly provided in this Agreement or as required in
connection with the consummation of the transactions contemplated by the
Investment Agreement, form, join or in any way participate or act in a “group”
(as such term is used in Section 13(d)(3) of the Exchange Act) with respect to
any voting securities of the Company or any of its Subsidiaries;

(iv) acquire, offer to acquire or agree to acquire, directly or indirectly,
alone or in concert with others, by purchase, exchange or otherwise, (A) any of
the assets (tangible or intangible) of the Company or any of its Subsidiaries,
or (B) any direct or indirect right, warrant or option to acquire any asset of
the Company or any of its Subsidiaries, except in the event any such asset as is
then being offered for sale by the Company or any of its Subsidiaries;

(v) arrange, or in any way participate, directly or indirectly, in any financing
for the purchase of any securities or assets of the Company or any of its
Subsidiaries or any securities convertible into or exchangeable or exercisable
for any securities or assets of the Company or any of its Subsidiaries, except
for such securities or assets as are then being offered for sale by the Company
or any of its Subsidiaries;

(vi) act, alone or in concert with others, to make any public announcement or
seek to propose (in each case, with or without any condition) to the Company,
any of its Subsidiaries or any of their respective equityholders any
amalgamation, merger, business combination, tender or exchange offer,
restructuring, recapitalization, liquidation of or other similar transaction to
or with the Company or any such Subsidiary (or in respect of any securities of
the Company or any of its Subsidiaries) or otherwise seek, alone or in concert
with others, to control, change or influence the management, board of directors
or policies of the Company or any such Subsidiary or nominate any Person as a
director who is not nominated by the then-incumbent Board, or propose any matter
to be voted upon by the stockholders of the Company;

 

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(vii) make any request or proposal to amend, waive or terminate any provision of
this Section 2.2(a); provided that this clause shall not prohibit a Stockholder
from making a confidential request or proposal to the Chief Executive Officer or
Chair of the Board seeking any amendment or waiver of any provision of this
Section 2.2, which the Company may accept or reject in its sole discretion, so
long as any such request is made in a manner that does not require public
disclosure thereof; or

(viii) take any action that might result in the Company having to make a public
announcement regarding any of the matters referred to in clauses (i) - (vii) of
this Section 2.2(a), or announce any intention to do, or enter into any
arrangement, understanding or discussion with any one or more other Persons to
do, any of the actions restricted or prohibited under clauses (i)—(vii) of this
Section 2.2(a).

(b) Nothing in Section 2.2(a) will limit the Stockholders’ ability to vote
(subject to Section 1.2 above), Transfer (subject to Section 2.3 below), convert
(subject to Section (C) of Article VII of the Series A Certificate) or otherwise
exercise the rights of its shares of Common Stock or shares of Series A
Preferred Stock or the ability of the Stockholders’ director designee elected to
the Board pursuant to Section 1.1 to vote or otherwise exercise its legal duties
or otherwise act in its capacity as a member of the Board.

2.3 Transfer Restrictions.

(a) Until the earlier of (x) eighteen (18) months following the Closing, and
(y) the occurrence of a transaction resulting in a Change of Control (as defined
in the Series A Certificate) of the Company, no Stockholder shall Transfer any
share of Series A Preferred Stock or any share of Common Stock issued upon
conversion of any share of Series A Preferred Stock except as otherwise
permitted pursuant to the terms and conditions of this Agreement, including
Section 2.3(b).

(b) Notwithstanding anything to the contrary in Section 2.3(a), each Stockholder
shall be permitted to Transfer any portion or all of its shares of Series A
Preferred Stock or shares of Common Stock issued upon conversion of any share of
Series A Preferred Stock at any time under the following circumstances:

(i) Transfers to any Permitted Transferee, but only if (A) such Permitted
Transferee agrees in writing for the benefit of the Company (in form and
substance reasonably satisfactory to the Company and with a copy thereof to be
furnished to the Company) to be bound by the terms of this Agreement, which
writing shall be deemed acceptable to the Company if in the form of a joinder
substantially in the form attached hereto as Exhibit A (a “Joinder”); and
(B) such Permitted Transferee and the applicable Transferor Stockholder agree in
writing for the benefit of the Company that such Permitted Transferee shall
Transfer its shares of Series A Preferred Stock or shares of Common Stock issued
upon conversion of any share of Series A Preferred Stock back to such Transferor
Stockholder at or before such time as such Permitted Transferee ceases to
qualify hereunder as a Permitted Transferee of such Transferor Stockholder,
which writing shall be deemed acceptable to the Company if in the form
substantially in the form attached hereto as Exhibit B;

 

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(ii) Transfers pursuant to an amalgamation, merger, tender offer or exchange
offer or other business combination, acquisition of assets or similar
transaction entered into by the Company or any transaction resulting in a Change
of Control of the Company; or

(iii) Transfers that have been approved in writing by the Board prior to such
Transfer.

(c) Notwithstanding anything to the contrary in Sections 2.3(a) and (b), for as
long as any shares of Series A Preferred Stock issued pursuant to the Investment
Agreement are issued and outstanding, without the prior written consent of the
Company in its sole discretion, no Stockholder may Transfer any share of Series
A Preferred Stock or share of Common Stock issued or issuable upon conversion or
redemption of any share of Series A Preferred Stock to (i) any Company
Competitor, (ii) any Person that has filed (individually or jointly with others
in a “group” (as such term is used in Section 13(d)(3) of the Exchange Act)) a
report on Schedule 13D or Schedule 13G pursuant to Regulation 13D-G under the
Exchange Act with respect to its ownership of shares of capital stock of the
Company if (A) such Person has a current obligation to file (individually or
jointly with others in a group) a report on Schedule 13D or Schedule 13G, and
(B) the last such report on Schedule 13D or Schedule 13G (or amendment thereto)
filed (individually or jointly with others in a group) by such Person states
that such Person beneficially owns more than five percent (5%) of the issued and
outstanding capital stock of the Company (any such Person that has filed or has
a current obligation to file a report on Schedule 13G, a “Schedule 13G Filer”),
(iii) any Person that such Stockholder knows or reasonably should know (1) is or
has been an investor in the Company, and (2) in the three years prior to the
date of any such proposed Transfer has stated an intention to or has actually
attempted to (pursuant to proxy solicitation, tender or exchange offer or other
means) obtain a seat on the Board, or (iv) any Person that such Stockholder
knows (after reasonably inquiry of such Person) would be required to file
(individually or jointly with others in a group) a report on Schedule 13D or
Schedule 13G with respect to its ownership of shares of the Company as a result
of such Transfer (any such Person, a “Prohibited Transferee”); provided that the
restrictions set forth in the foregoing clauses (ii) and (iv) shall terminate
and be of no further force or effect upon the first date that there is no longer
any share of Series A Preferred Stock outstanding; provided, further, that,
notwithstanding anything to the contrary in the foregoing, this Section 2.3(c)
shall not apply to restrict a Transfer pursuant to a registered public offering
(other than a direct placement) or Rule 144 under the Securities Act (provided
that any such Transfer pursuant to Rule 144 either is not a direct placement or
satisfies the requirements of paragraph (f) of such rule), so long as, in the
case of a Transfer to which either of the foregoing clauses (ii)(A) or (ii)(B)
of this Section 2.3(c) would otherwise apply, such Transfer is not knowingly
(without any obligation of investigation) made by any Stockholder to a
Prohibited Transferee (other than a Schedule 13G Filer, except for any Schedule
13G Filer who is a Company Competitor).

(d) Notwithstanding anything to the contrary in this Agreement or otherwise,
“Transfer” shall not include, and this Section 2.3 shall not prohibit, any
encumbrance or pledge of any share of Series A Preferred Stock or Common Stock
issued upon conversion of any share of the Series A Preferred Stock, or any
exercise of remedies with respect to any of the foregoing, pursuant to (i) one
or more credit facilities of the Initial Stockholder or any of its Affiliates,
so long as (A) the Initial Stockholder shall provide prompt written notice to
the Company (pursuant to Section 5.12) if any event of default pursuant to any
such credit facility occurs which results in any lender thereunder becoming
entitled (with the provision of notice, lapse of time, or both) to foreclose on
such collateral, (B) any such credit facility provides that the Company will be
entitled to redeem any share of Series A Preferred Stock or share of Common
Stock issued upon conversion

 

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of any share of Series A Preferred Stock, within twenty (20) Business Days
following notice to the Company of such foreclosure, for the redemption price
set forth in Section (A) of Article VIII of the Series A Certificate, and
(C) any such credit facility provides that any lender thereunder will not be
entitled to exercise any right pursuant to Sections 1.1 or 2.1, including in the
event of any such foreclosure or (ii) any back leverage financing, so long as
any such financing provides that any lender thereunder will not be entitled to
exercise any right pursuant to Sections 1.1 or 2.1, including in the event of
any foreclosure.

(e) Any attempted Transfer in violation of this Section 2.3 shall be null and
void ab initio and the Company shall not be required to give any effect thereto.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Stockholders. The Initial Stockholder,
as of the date hereof, and each other Stockholder, as of the date such
Stockholder becomes a party to this Agreement pursuant to the execution of a
Joinder, hereby represent and warrant to the Company as follows:

(a) Such Stockholder has been duly formed, is validly existing and is in good
standing under the laws of its jurisdiction of organization. Such Stockholder
has all requisite power and authority to execute and deliver this Agreement (or
to deliver a Joinder and join this Agreement, as applicable) and to perform its
obligations under this Agreement.

(b) The execution and delivery by such Stockholder of this Agreement (or the
execution and delivery of a Joinder and the joining of this Agreement, as
applicable) and the performance by such Stockholder of its obligations under
this Agreement do not and will not conflict with, violate any provision of or
require the consent or approval of any Person under (i) Applicable Law, (ii) the
organizational documents of such Stockholder, or (iii) any Contract to which
such Stockholder is a party or to which any of its assets is subject, except, in
case of clauses (i) and (iii), as would not be reasonably expected to have a
material adverse effect on such Stockholder’s performance of its obligations
hereunder.

(c) The execution and delivery by such Stockholder of this Agreement (or the
execution and delivery of a Joinder and the joining in this Agreement, as
applicable) and the performance by such Stockholder of its obligations under
this Agreement have been duly authorized by all necessary corporate (or similar)
action on the part of such Stockholder. Assuming the due authorization,
execution and delivery of this Agreement by the Company, this Agreement
constitutes a legal, valid and binding obligation of such Stockholder,
enforceable against such Stockholder in accordance with its terms, subject to
bankruptcy, insolvency and other laws of general applicability relating to or
affecting creditors’ rights and to general principles of equity.

3.2 Representations and Warranties of the Company. The Company hereby represents
and warrants to the Initial Stockholder as of the date hereof as follows:

 

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(a) The Company is a duly incorporated and validly existing corporation in good
standing under the laws of the state of Delaware. The Company has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement.

(b) The execution and delivery by the Company of this Agreement and the
performance of the obligations of the Company under this Agreement do not and
will not conflict with, violate any provision of or require any consent or
approval of any Person under (i) Applicable Law, (ii) the organizational
documents of the Company, or (iii) any Contract to which the Company is a party
or to which any asset of the Company and its Subsidiaries is subject, except, in
case of clauses (i) and (iii), as would not be reasonably expected to have a
material adverse effect on the Company and its Subsidiaries’ ability to operate
in the ordinary course of business consistent with past practice.

(c) The execution, delivery and performance of this Agreement by the Company
have been duly authorized by all necessary corporate action on the part of the
Company. Assuming the due authorization, execution and delivery of this
Agreement by the Initial Stockholder, this Agreement constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency and other laws of
general applicability relating to or affecting creditors’ rights and to general
principles of equity.

ARTICLE IV

DEFINITIONS

4.1 Defined Terms. Capitalized terms when used in this Agreement have the
following meanings:

“30-Day VWAP” has the meaning set forth in the Series A Certificate.

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
“controlling,” “controlled by” and “under common control with” have correlative
meanings. Notwithstanding anything to the contrary in this definition, none of
the Stockholders or their respective Affiliates shall be deemed to be an
Affiliate of the Company or any of its Subsidiaries.

“Agreement” has the meaning set forth in the Preamble.

“Applicable Law” means any law, statute, constitution, principle of common law,
ordinance, regulation and Order of any Governmental Entity.

 

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“Approved Holders” means the Initial Stockholder and any Permitted Transferees
of the Initial Stockholder or any other direct or indirect Permitted Transferee
of the Initial Stockholder.

“Board” has the meaning set forth in Section 1.1(a).

“Business Day” means a day that is a Monday, Tuesday, Wednesday, Thursday or
Friday and is not a day on which banking institutions in New York, New York,
generally are authorized or obligated by Applicable Law to close.

“Closing” has the meaning set forth in the Investment Agreement.

“Common Stock” means the common stock, par value $0.01 per share of the Company.

“Common Stock Valuation” has the meaning set forth in Section 1.1(b).

“Company” has the meaning set forth in the Preamble.

“Company Competitor” means, as of any date of determination, any Person that
competes with the Company with respect to (i) delivery technologies or
development solutions for drugs, biologics or consumer and animal health
products, (ii) manufacturing, packaging, labeling, storage, distribution or
inventory management of customer-required patient kits for clinical trials of
drugs or biologics, or (iii) any other business in development by the Company or
any of its Subsidiaries or in which the Company or any of its Subsidiaries may
then be engaged, including the formulation, development, manufacture or sale of
viral vectors or related bioanalytical testing, in each case in a manner
material to the Company or any of the Company’s reporting segments.

“Confidential Information” means any and all confidential, non-public or
proprietary information or data pertaining to the Company or any of its
Subsidiaries, or the respective businesses and operations thereof, furnished or
made available by or on behalf of the Company or any of its Subsidiaries to any
Stockholder or any of its Representatives purporting to act on its behalf;
provided that “Confidential Information” shall not include information that
(i) is at the time of disclosure to such Stockholder or Representative, already
in such Stockholder’s or Representative’s possession (provided, however, that
such information is not, to the knowledge of such Stockholder following
reasonable inquiry subject to an obligation of confidentiality owed to the
Company, any Subsidiary of the Company or any other Person), (ii) is or becomes
generally available to the public other than as a result of a disclosure by such
Stockholder or any of its Affiliates or Representatives in violation of this
Agreement or any applicable confidentiality or non-disclosure agreement,
(iii) becomes available to such Stockholder on a non-confidential basis from a
source other than the Company, any of its Subsidiaries or any of their
respective Representatives (provided, however, that such source is not known by
such Stockholder following reasonable inquiry to be bound by an obligation of
confidentiality owed to the Company, any Subsidiary of the Company or any other
Person), or (iv) is developed by such Stockholder without using all or any
portion of Confidential Information or violating any of the obligations of such
Stockholder under this Agreement.

 

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“Confidentiality Agreement” means that certain Confidentiality Agreement, dated
as of January 2, 2019, by and between Catalent Pharma Solutions, LLC and Leonard
Green & Partners, L.P.

“Contract” means any contract, agreement, note, bond, indenture, guarantee,
subcontract, lease or undertaking.

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

“Fund VII” has the meaning set forth in the Preamble.

“Fund Side VII” has the meaning set forth in the Preamble.

“Governmental Entity” means any court, administrative or regulatory agency or
commission or other governmental or arbitral body or authority or
instrumentality, including any state-controlled or -owned corporation or
enterprise, in each case whether federal, state, local or foreign, and any
applicable industry self-regulatory organization.

“Initial Stockholder” has the meaning set forth in the Preamble.

“Investment Agreement” has the meaning set forth in the Recitals.

“Majority Approved Holders” means, as of any date, any one or more of the
Approved Holders holding in the aggregate a majority of the shares of Common
Stock then held, on a fully-diluted and as converted basis, by all Approved
Holders.

“Other Investments” has the meaning set forth in Section 5.13.

“Permitted Initial Stockholder LP” means any limited partner of, or Affiliate of
a limited partner of, Fund VII or Fund Side VII or any of their parallel or
feeder funds that is not a Prohibited Transferee.

“Permitted Transferee” means, with respect to any Person, (i) any successor
entity of such Person, (ii) if such Person is an investment fund, vehicle or
similar entity, any other investment fund, vehicle or similar entity controlled
by a Related GP Entity and managed by a Related IM Entity for so long as such
fund or investment vehicle remains controlled by a Related GP Entity and managed
by a Related IM Entity, (iii) a wholly owned Subsidiary of such Person and
(iv) with the consent of the Company, such consent not to be unreasonably
withheld, any Permitted Initial Stockholder LP. Notwithstanding anything to the
contrary in the foregoing, “Permitted Transferee” shall not include any
portfolio company or investment of any fund or investment vehicle controlled by
a Related GP Entity and managed by a Related IM Entity.

“Person” means any natural person, corporation, partnership, limited liability
company, firm, association, trust, government, governmental agency or other
entity, whether acting in an individual, fiduciary or other capacity.

 

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“Prohibited Transferee” has the meaning set forth in Section 2.3(c).

“Purchaser Group” has the meaning set forth in Section 5.13.

“Registration Rights Agreement” has the meaning set forth in the Recitals.

“Related IM Entity” means any Person (i) that, pursuant to contract, manages or
directs the investment decision-making of an affiliated pooled investment fund
or vehicle sponsored by Leonard Green & Partners, L.P., and (ii) whose
outstanding equity interests are at least seventy-five percent (75%) owned by
current or former (as of the date of determination) Leonard Green & Partners,
L.P. personnel or their estate planning vehicles.

“Related GP Entity” means any Person (i) that acts as the general partner or
managing member (or in a similar capacity) of an affiliated pooled investment
fund or vehicle sponsored by Leonard Green & Partners, L.P., and (ii) whose
outstanding equity interests are at least seventy-five percent (75%) owned by
current or former (as of the date of determination) Leonard Green & Partners,
L.P. personnel or their estate planning vehicles or an Affiliate of Leonard
Green & Partners, L.P.

“Renounced Business Opportunity” has the meaning set forth in Section 5.13.

“Representative” means, with respect to any Person, any director, officer,
employee, general partner, member, manager, advisor (including any financial
advisor, legal counsel, accountant or consultant), agent or other representative
of such Person.

“Schedule 13G Filer” has the meaning set forth in Section 2.3(c).

“Securities” means the shares of Series A Preferred Stock issued pursuant to the
Investment Agreement on the date hereof or the shares of Common Stock issued in
connection with the conversion or redemption of all or any portion of the shares
of Series A Preferred Stock (without duplication).

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

“Series A Certificate” has the meaning set forth in Section 1.1(b).

“Series A Preferred Stock” means the preferred stock, par value $0.01 per share,
designated as “Series A Convertible Preferred Stock”, of the Company issued on
the date hereof pursuant to the Investment Agreement.

“Stated Value” has the meaning set forth in the Series A Certificate.

“Stockholders” means the Initial Stockholder and any Person (i)(x) who acquires
shares of Series A Preferred Stock (or to whom shares of Series A Preferred
Stock is transferred), whether from an existing Stockholder, the Company or
otherwise or (y) to whom any right, interest or obligation hereunder is assigned
pursuant to and in accordance with Section 5.3, and (ii) in the case of both
clauses (i)(x) and (i)(y), who executes a written joinder substantially in the
form attached hereto as Exhibit A.

 

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“Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture, limited liability company or other entity (i) of which such
Person or a subsidiary of such Person is a general partner, or (ii) of which a
majority of the voting securities or other voting interests, or a majority of
the securities or other interests of which having by their terms ordinary voting
power to elect a majority of the board of directors or Persons performing
similar functions with respect to such Person, is directly or indirectly owned
by such Person and/or one or more subsidiaries thereof.

“Transfer” by any Person means, directly or indirectly, sell, transfer, assign,
pledge (subject to Section 2.3(d)), encumber (subject to Section 2.3(d)),
hypothecate or similarly dispose of, either voluntarily or involuntarily, or
enter into any contract, option or other arrangement or understanding with
respect to the sale, transfer, assignment, pledge (subject to Section 2.3(d)),
encumbrance (subject to Section 2.3(d)), hypothecation or similar disposition
of, any securities owned by such Person or of any interest (including any voting
interest) in any securities owned by such Person. Correlative terms, including
the terms “Transferor”, “Transferee” and “Transferred”, shall have correlative
meanings.

4.2 Terms Generally. The words “hereby,” “herein,” “hereof,” “hereunder” and
words of similar import refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which such word appears. All references
herein to “Articles” and “Sections” shall be deemed references to Articles and
Sections of this Agreement unless the context shall otherwise require. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” References to “$” or “dollars” means United States
dollars. The definitions given for terms in this ARTICLE IV and elsewhere in
this Agreement shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. References herein to any
agreement or letter shall be deemed references to such agreement or letter as it
may be amended, restated or otherwise revised from time to time.

ARTICLE V

MISCELLANEOUS

5.1 Term. This Agreement will be effective as of the Closing and, except as
otherwise set forth herein, will continue in effect thereafter until the mutual
written agreement of the Company and the Majority Approved Holders to terminate
this Agreement.

5.2 Amendments and Waivers. Except as otherwise provided herein, the provisions
of this Agreement may be amended or waived only upon the prior written consent
of the Company and the Majority Approved Holders. No failure or delay by any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any right or remedy provided by Applicable Law.

 

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5.3 Successors and Assigns. Except as otherwise expressly provided in this
Section 5.3, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties (whether an
initial party or made party through a Joinder or otherwise), in whole or in part
(whether by operation of law or otherwise), without the prior written consent of
the Company and the Majority Approved Holders. Notwithstanding anything to the
contrary in the foregoing, (a) subject to the terms and conditions of this
Agreement, a Stockholder may assign all or any portion of its rights and
interests under this Agreement to any Person (i) to which such Stockholder
properly assigns or transfers Securities in accordance with Section 2.3, and
(ii) that executes a Joinder, and (b) this Agreement may be assigned by
operation of law by the Company. This Agreement will be binding upon, inure to
the benefit of, and be enforceable by the parties and their respective permitted
successors and assigns. Any attempted assignment in violation of this
Section 5.3 shall be null and void ab initio.

5.4 Confidentiality. The parties recognize that, in connection with the
performance of this Agreement, the Company may provide the Stockholders with
access to, or otherwise furnish or make available to the Stockholders certain
Confidential Information. Each Stockholder shall keep all Confidential
Information strictly confidential and not disclose any Confidential Information
to any other Person, except as may be requested or legally compelled (in either
case pursuant to the terms of a valid and effective subpoena or order issued by
a Governmental Entity or pursuant to a civil investigative demand or similar
judicial or legal process); provided, however, that each Stockholder may
disclose such Confidential Information to (i) its Representatives who need to
know such Confidential Information for purposes of evaluating or monitoring such
Stockholder’s investment in the Company and who agree to be bound by the terms
of this Section 5.4 or otherwise have a professional duty of confidentiality
with respect to information received from such Stockholder, it being
acknowledged and agreed by each Stockholder that such Stockholder shall be
liable for any breach of this Section 5.4 by any of its Representatives,
(ii) proposed Permitted Transferees in connection with a proposed Transfer of
shares of Series A Preferred Stock or shares of Common Stock (it being
understood and agreed by each Stockholder that (A) prior to any such disclosure,
the Stockholder shall inform the prospective Permitted Transferee of the
confidential nature of the information, and (B) such Stockholder shall be liable
for any breach of this Section 5.4 by such prospective Permitted Transferee), or
(iii) any Permitted Initial Stockholder LP that is bound by a customary written
confidentiality obligation that contains reasonable restrictions on the use and
disclosure of the Company’s non-public information; provided that, for purposes
of this clause (iii), (x) such Confidential Information is limited to financial
and other information regarding the Company or its Subsidiaries that is
contractually required or customarily provided to existing or prospective
investors in the Initial Stockholder, and (y) such Stockholder shall be
responsible for any breach of this Section 5.4 by such Person. Furthermore, no
Stockholder shall, and each Stockholder shall cause its Representatives not to,
use any Confidential Information for any purpose whatsoever other than to
evaluate, monitor, manage or ascribe a value to its investment in the Company or
enforce its rights under this Agreement, it being acknowledged and agreed by
each Stockholder that such Stockholder shall be liable for any breach of this
Section 5.4 by any of its Representatives. In furtherance of the foregoing, each
Stockholder shall take precautions that are reasonable, necessary and
appropriate to guard the confidentiality of the Confidential Information and
shall treat such Confidential Information with at least the same degree of care
which it applies to its own confidential and proprietary information. In the
event that any Stockholder (or any Affiliate or Representative

 

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thereof) is requested or required to disclose any Confidential Information
pursuant to this Section 5.4, it shall provide prompt written notice to the
Company of the proposed disclosure prior to such disclosure and shall cooperate
with the Company in good faith, at the Company’s cost and expense, in any effort
the Company undertakes in order to obtain a protective order or other similar
remedy. In the event that such protective order or other remedy either is not
obtained or does not completely block such disclosure, or that the Company
waives compliance with this provision, such Stockholder will furnish only that
portion of such Confidential Information that such Stockholder is advised by
legal counsel is legally required and will exercise its commercially reasonable
efforts to obtain an order or other reliable assurance that confidential
treatment will be accorded such information. Each Stockholder hereby
acknowledges and agrees that all Confidential Information is and shall at all
times remain the sole and exclusive property of the Company or its Subsidiaries,
as applicable. For the avoidance of doubt, the terms of this Section 5.4 shall
survive the termination of this Agreement.

5.5 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under Applicable Law,
but, if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any Applicable Law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or the effectiveness or validity of any such provision in
any other jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.

5.6 Counterparts. This Agreement may be executed in two (2) or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that each party need not
sign the same counterpart.

5.7 Entire Agreement. This Agreement (including the documents and the
instruments referred to in this Agreement), together with the Confidentiality
Agreement, the Investment Agreement, the Series A Certificate, and the
Registration Rights Agreement, constitutes the entire agreement among the
parties or to which they are subject and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter of the transactions contemplated hereby and thereby.

5.8 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware
(excluding those choice-of-law principles of such State that would permit the
application of the laws of a jurisdiction other than such State), without regard
to any applicable conflicts-of-law principles. Any suit, action or proceeding
brought by any party to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought exclusively in the Chancery Court of the State of
Delaware or, to the extent such court shall not have jurisdiction over the
subject matter, in any state or federal court sitting in New Castle County,
Delaware, and each of the parties submits to the exclusive jurisdiction of any
such court in any suit, action or proceeding seeking to enforce any provision
of, or based on any matter arising out of, or in connection with, this Agreement
or the transactions contemplated hereby; provided, however, that any judgment in
any such suit, action or proceeding may be enforced in any court with
jurisdiction over the subject matter. Each party irrevocably waives, to the
fullest extent

 

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permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Process in any such action, suit or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party in any manner provided for notice
in Section 5.12 shall be deemed effective service of process on such party.

5.9 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

5.10 Specific Performance. The parties agree that irreparable damage may occur
if any provision of this Agreement is not performed in accordance with the terms
hereof and that the parties shall be entitled to seek an injunction or
injunctions or other equitable relief to prevent breaches of this Agreement or
to enforce specifically the performance of the terms and provisions hereof in
any court set forth in Section 5.8, in addition to any other remedy to which
they are entitled at law or in equity.

5.11 No Third-Party Beneficiaries. Nothing in this Agreement shall confer any
right upon any Person other than the parties and each such party’s respective
heirs, successors and permitted assigns, all of whom shall be express
third-party beneficiaries of this Agreement.

5.12 Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally or by
facsimile or electronic communication, upon confirmation of receipt, (b) on the
first Business Day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the third Business Day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice.

If to the Company, to:

Catalent, Inc.

14 Schoolhouse Road

Somerset, New Jersey 08873

Attn:                 General Counsel – Steven L. Fasman

E-mail:              GenCouns@catalent.com

Fax:                 (732) 537-6490

with copies (which shall not constitute notice) to:

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attn:                 Steven Epstein; Matthew Soran

E-mail:             steven.epstein@friedfrank.com;

                          matthew.soran@friedfrank.com

Fax:                 (212) 859-4000

 

-18-

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If to the Initial Stockholder, to:

c/o Leonard Green & Partners, L.P.

11111 Santa Monica Blvd., #2000

Los Angeles, CA 90025

Attn:                 Peter Zippelius

E-mail:             pzippelius@leonardgreen.com

Facsimile:        (310) 954-0404

with a copy (which shall not constitute notice) to:

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022-4834

Attn:                 Howard A. Sobel

                          Jason H. Silvera

                          Greg Rodgers

E-mail:             howard.sobel@lw.com

                          jason.silvera@lw.com

                          greg.rodgers@lw.com

Fax:                  (212) 751-4864

5.13 Corporate Opportunities. Notwithstanding anything to the contrary in this
Agreement but subject to the terms and conditions of Section 2.2 and the proviso
set forth in the penultimate sentence of this Section 5.13, the Company, on
behalf of itself and its Subsidiaries, to the fullest extent permitted by
Applicable Law, (a) acknowledges and affirms that the Initial Stockholder and
its Affiliates, employees, directors, partners and members, including any
director or observer designated pursuant to Section 1.1 (the “Purchaser Group”):
(i) have participated (directly or indirectly) and will continue to participate
(directly or indirectly) in private equity, venture capital and other direct
investments in corporations, joint ventures, limited liability companies and
other entities (“Other Investments”), including Other Investments engaged in
various aspects of businesses similar to those engaged in by the Company and its
Subsidiaries (and related services businesses) that may, are or will be
competitive with the Company’s or any of its Subsidiaries’ businesses or that
could be suitable for the Company’s or any of its Subsidiaries’ interests,
(ii) have interests in, participate with, aid and maintain seats on the board of
directors or similar governing bodies of, Other Investments, (iii) may develop
or become aware of business opportunities for Other Investments; and (iv) may or
will, as a result of or arising from the matters referenced in this
Section 5.13, the nature of the Purchaser Group’s businesses and other factors,
have conflicts of interest or potential conflicts of interest, (b) hereby
renounces and disclaims any interest or expectancy in any business opportunity
(including any Other Investments or any other

 

-19-

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opportunities that may arise in connection with the circumstances described in
the foregoing clauses (a)(i) – (a)(iv) (each, a “Renounced Business
Opportunity”)), and (c) acknowledges and affirms that no member of Purchaser
Group, including any director or observer designated pursuant to Section 1.1,
shall have any obligation to communicate or offer any Renounced Business
Opportunity to the Company or any of its Subsidiaries, and any member of
Purchaser Group may pursue a Renounced Business Opportunity. Notwithstanding
anything to the contrary in the foregoing, the Company does not renounce its
interest in any corporate opportunity if such corporate opportunity was
expressly offered to a member of the Board or observer of the Board designated
pursuant to Section 1.1 solely in his or her capacity as a member of the Board
or an observer of the Board; provided that such opportunity has not been
separately presented to the Initial Stockholder or its Affiliates or is not
otherwise being independently pursued by the Initial Stockholder or its
Affiliates (in each case, whether before or after such opportunity is presented
to such director), other than as a result of a breach of the confidentiality
obligations of such member of the Board or observer of the Board owed to the
Company pursuant to (A) Section 5.4, or (B) Applicable Law. Notwithstanding
anything to the contrary in the foregoing, the Company shall not be prohibited
from pursuing any Renounced Business Opportunity as a result of this
Section 5.13.

[Remainder of page intentionally left blank]

 

-20-

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IN WITNESS WHEREOF, the parties have duly executed this Agreement by their
authorized representatives as of the date first above written.

 

CATALENT, INC.

By:

 

                

Name:

Title:

[Signature Page to Stockholders’ Agreement]

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GREEN EQUITY INVESTORS VII, L.P.

By: GEI Capital VII, LLC, its General Partner

By:

 

                

Name:

Title:

GREEN EQUITY INVESTORS SIDE VII, L.P.

By: GEI Capital VII, LLC, its General Partner

By:

 

                

Name:

Title:

[Signature Page to Stockholders’ Agreement]

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EXHIBIT A

FORM OF JOINDER

Catalent, Inc.

14 Schoolhouse Road

Somerset, New Jersey 08873

Attention: General Counsel – Steven L. Fasman

Ladies and Gentlemen:

Reference is made to the Stockholders’ Agreement, dated as of [ • ], 2019 (as
such agreement may have been or may be amended from time to time) (the
“Agreement”), by and among Catalent, Inc., a Delaware corporation, each of Green
Equity Investors VII, L.P., a Delaware limited partnership and Green Equity
Investors Side VII, L.P., a Delaware limited partnership and any other party
identified on the signature page of any joinder substantially similar to this
joinder executed or otherwise permitted pursuant to Section 2.3(b)(i)(A) of the
Agreement and delivered in accordance with the Agreement. Capitalized terms used
but not otherwise defined herein have the meanings set forth in the Agreement.

The undersigned represents and warrants that it has acquired [[•] shares of
Series A Preferred Stock][shares of Common Stock] from [•] on the date hereof.
The undersigned agrees that, as of the date hereof, the undersigned shall become
a party to the Agreement and shall be fully bound by, and subject to, all of the
covenants, terms and conditions of the Agreement as a “Stockholder,” as though
an original party thereto. The undersigned represents and warrants that the
representations and warranties set forth in Section 3.1 of the Agreement are
true and correct as to the undersigned in all respects as of the date hereof.

THE UNDERSIGNED ACKNOWLEDGES AND ACCEPTS THE WAIVER OF JURY TRIAL PROVISIONS SET
FORTH IN SECTION 5.9 OF THE AGREEMENT.

This joinder and all claims or causes of action based upon, arising out of, or
related to this joinder (whether based on contract, equity, tort or any other
theory) shall be governed by and construed in accordance with the laws of the
State of Delaware (excluding choice-of-law principles of the laws of such State
that would permit the application of the laws of a jurisdiction other than such
State), without regard to any applicable conflicts-of-law principles.

*****

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

IN WITNESS WHEREOF, the undersigned has executed this Joinder as of the [    ]th
day of [                        ], [        ].

 

[                                             ]

By:

 

                

Name:

Title:

Notice Address:

 

 

 

Attn:

 

            

Facsimile:

 

                

Email:

 

                

[Joinder to Catalent, Inc. Stockholders’ Agreement]

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EXHIBIT B

FORM OF TRANSFER GUARANTEE AGREEMENT

Catalent, Inc.

14 Schoolhouse Road

Somerset, New Jersey 08873

Attention: General Counsel – Steven L. Fasman

Ladies and Gentlemen:

Reference is made to the Stockholders’ Agreement, dated as of [ • ], 2019 (as
such agreement may have been or may be amended from time to time) (the
“Agreement”), by and among Catalent, Inc., a Delaware corporation, each of Green
Equity Investors VII, L.P., a Delaware limited partnership and Green Equity
Investors Side VII, L.P., a Delaware limited partnership and any other party
identified on the signature page of any joinder executed pursuant to
Section 2.3(b)(i)(A) of the Agreement. Capitalized terms used but not otherwise
defined in this letter agreement (this “Transfer Guarantee Agreement”) have the
meanings set forth in the Agreement.

The undersigned [name of Permitted Transferee] (the “Permitted Transferee”)
represents and warrants that, on the date hereof, it has (a) acquired [[•]
shares of Series A Preferred Stock][shares of Common Stock] (the “Acquired
Shares”) from [name of Transferor] (the “Transferor Stockholder”), and
(b) executed a joinder to become a party to the Agreement and fully bound by,
and subject to, all of the covenants, terms and conditions of the Agreement as a
“Stockholder,” as though an original party thereto. Each of the Permitted
Transferee and the Transferor Stockholder severally (i) acknowledges that entry
into this Transfer Guarantee Agreement is a required precondition under the
Agreement for the Transfer of the Acquired Shares to the Permitted Transferee,
and (ii) represents and warrants that (A) it has full power and authority to
enter into this Transfer Guarantee Agreement, and (B) this Agreement, once
executed by both parties, will constitute a binding obligation in accordance
with its terms, subject to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors’ rights and to general
principles of equity.

In furtherance of the foregoing, each of the Permitted Transferee and the
Transferor Stockholder hereby covenants and agrees to comply with the terms and
conditions of Section 2.3(b)(i)(B) of the Agreement and that, if the Permitted
Transferee ceases to qualify under the Agreement as a Permitted Transferee of
the Transferor Stockholder at any time prior to the date that is eighteen
(18) months following the Closing, then at or before such time the (a) Permitted
Transferee shall Transfer the Acquired Shares to the Transferor Stockholder for
all purposes of the Agreement, and (b) the Transferor Stockholder shall accept
the Transfer of, and acquire, the Acquired Shares from the Permitted Transferee
for all purposes of the Agreement. The Company shall be an express third-party
beneficiary of the terms and conditions of this Transfer Guarantee

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Agreement, entitled to sue upon and enforce this Transfer Guarantee Agreement as
if the Company were a party hereto. The Permitted Transferee and the Transferor
Stockholder hereby acknowledge and agree that irreparable damage may occur if
any provision of this Transfer Guarantee Agreement or Section 2.3(b)(i)(B) of
the Agreement is not performed in accordance with the terms hereof and that the
parties (including the Company as an express third-party beneficiary) will be
entitled to seek an injunction or injunctions or other equitable relief to
prevent breaches of this Transfer Guarantee Agreement or Section 2.3(b)(i)(B) of
the Agreement or to enforce specifically the performance of the terms and
provisions hereof and thereof in any court described in the last paragraph
hereof, in addition to any other remedy to which they are entitled at law or in
equity.

This Transfer Guarantee Agreement and all claims or causes of action based upon,
arising out of, or related to this Transfer Guarantee Agreement (whether based
on contract, equity, tort or any other theory) shall be governed by and
construed in accordance with the laws of the State of Delaware (excluding
choice-of-law principles of the laws of such State that would permit the
application of the laws of a jurisdiction other than such State), without regard
to any applicable conflicts-of-law principles.

*****

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

IN WITNESS WHEREOF, the undersigned have executed this Transfer Guarantee
Agreement as of the [    ]th day of [                            ], [        ].

 

[Permitted Transferee]

By:

 

                

Name:

Title:

 

Acknowledged and Agreed:

[Transferor Stockholder]

By:

 

                

Name:

Title: