Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into
as of July 31, 2017 by and among Invitae Corporation, a Delaware corporation
(the “Company”), and the Investors identified on Exhibit A attached hereto (each
an “Investor” and collectively the “Investors”).

RECITALS

A. The Company and the Investors are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by the
provisions of Section 4(a)(2) of the 1933 Act (as defined below) and Rule 506 of
Regulation D (“Regulation D”) promulgated by the SEC (as defined below)
thereunder;

B. The Investors wish to purchase from the Company, and the Company wishes to
sell and issue to the Investors, upon the terms and subject to the conditions
stated in this Agreement, an aggregate of 5,188,235 shares (the “Shares”) of the
Company’s Common Stock, $0.0001 par value per share (the “Common Stock”) at a
purchase price of $8.50 per share;

C. The Company is also offering to certain Investors the opportunity, in lieu of
purchasing Shares, to purchase an aggregate of 3,458,823 shares (the “Preferred
Shares”) of the Company’s Series A Convertible Preferred Stock, $0.0001 par
value per share, having the relative rights, preferences, limitations and powers
set forth in the Certificate of Designation in the form attached hereto as
Exhibit B (the “Certificate of Designation”) and convertible into shares of
Common Stock (the “Conversion Shares”) at a conversion price equal to $8.50,
subject to adjustment as provided therein at a purchase price of $8.50 per
share; and

D. Contemporaneously with the sale of the Securities, the parties hereto will
execute and deliver a Registration Rights Agreement, in the form attached hereto
as Exhibit C (the “Registration Rights Agreement”), pursuant to which the
Company will agree to provide certain registration rights in respect of the
Shares and the Conversion Shares under the 1933 Act, and the rules and
regulations promulgated thereunder, and applicable state securities laws.

In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. Definitions. In addition to those terms defined above and elsewhere in this
Agreement, for the purposes of this Agreement, the following terms shall have
the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or
is under common Control with, such Person.

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

“Closing” has the meaning set forth in Section 3.1.

“Closing Date” has the meaning set forth in Section 3.1.

“Common Stock Equivalents” means any securities of the Company which would
entitle the holder thereof to acquire at any time Common Stock, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.

“Company Covered Person” means, with respect to the Company as an “issuer” for
purposes of Rule 506 promulgated under the 1933 Act, any Person listed in the
first paragraph of Rule 506(d)(1).

 

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“Company Intellectual Property” has the meaning set forth in Section 4.13.

“Company’s Knowledge” means the actual knowledge of the executive officers (as
defined in Rule 405 under the 1933 Act) of the Company.

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

“Disclosure Schedule” has the meaning set forth in Section 4.

“Environmental Laws” has the meaning set forth in Section 4.14.

“GAAP” has the meaning set forth in Section 4.16.

“Losses” has the meaning set forth in Section 8.2.

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, financial condition or business of the
Company and its subsidiaries taken as a whole, (ii) the legality or
enforceability of any of the Transaction Documents or (iii) the ability of the
Company to perform its obligations under the Transaction Documents, except that
for purposes of Section 6.1(j) of this Agreement, in no event shall a change in
the market price of the Common Stock alone constitute a “Material Adverse
Effect”; provided that the foregoing exception shall not apply to the underlying
causes giving rise to or contributing to such change or prevent any of such
underlying causes from being taken into account in determining whether a
Material Adverse Effect has occurred.

“Material Contract” means any contract, instrument or other agreement to which
the Company is a party or by which it is bound that has been filed or was
required to have been filed as an exhibit to the SEC Filings pursuant to
Item 601(b)(4) or Item 601(b)(10) of Regulation S-K.

“NYSE” means The New York Stock Exchange.

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

“Placement Agents” means Cowen and Company, LLC and Leerink Partners LLC.

“Press Release” has the meaning set forth in Section 9.7.

“Principal Trading Market” means the Trading Market on which the Common Stock is
primarily listed on and quoted for trading, which, as of the date of this
Agreement and the Closing Date, shall be the NYSE.

“Registration Rights Agreement” has the meaning set forth in the recitals to
this Agreement.

“Regulation D” has the meaning set forth in the recitals to this Agreement.

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

“SEC Filings” has the meaning set forth in Section 4.

“Securities” means the Shares, the Preferred Shares and the Conversion Shares.

“Shares” has the meaning set forth in the recitals to this Agreement.

 

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“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the 1934 Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and
traded on its Principal Trading Market (other than the OTC Bulletin Board), or
(ii) if the Common Stock is not listed on a Trading Market (other than the OTC
Bulletin Board), a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on any Trading Market, a day on which the Common
Stock is quoted in the over-the-counter market as reported in the “pink sheets”
by OTC Markets Group Inc. (or any similar organization or agency succeeding to
its functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.

“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT,
the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital
Market or the OTC Bulletin Board on which the Common Stock is listed or quoted
for trading on the date in question.

“Transfer Agent” has the meaning set forth in Section 7.5(a).

“Transaction Documents” means this Agreement, the Registration Rights Agreement
and the Certificate of Designation.

“SEC” means the U.S. Securities and Exchange Commission.

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

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

2. Purchase and Sale of the Securities. On the Closing Date, upon the terms and
subject to the conditions set forth herein, the Company will issue and sell, and
the Investors will purchase, severally and not jointly, for a price per share of
$8.50, the number of Shares and Preferred Shares in the respective amounts set
forth opposite the name of such Investor as indicated on Exhibit A attached
hereto.

3. Closing.

3.1 Upon the satisfaction of the conditions set forth in Section 6, the
completion of the purchase and sale of the Shares and the Preferred Shares (the
“Closing”) shall occur remotely via exchange of documents and signatures at a
time (the “Closing Date”) to be agreed to by the Company and the Investors but
in no event later than the third Business Day after the date hereof, and of
which the Investors will be notified in advance by the Placement Agents.

3.2 On the Closing Date, each Investor shall deliver or cause to be delivered to
the Company, via wire transfer of immediately available funds pursuant to the
wire instructions delivered to such Investor by the Company on or prior to the
Closing Date, an amount equal to the aggregate purchase price to be paid by the
Investor for the Shares and the Preferred Shares to be acquired by it as set
forth opposite the name of such Investor under the heading “Aggregate Purchase
Price” on Exhibit A attached hereto.

3.3 At or before the Closing, the Company shall deliver or cause to be delivered
to each Investor a number of Shares and Preferred Shares, registered in the name
of the Investor (or its nominee in accordance with its delivery instructions),
equal to the number of Shares and Preferred Shares set forth opposite the name
of such Investor on Exhibit A attached hereto. The Shares and Preferred Shares
shall be delivered via a book-entry record through the Company’s transfer agent
on a “delivery versus payment” basis.

 

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4. Representations and Warranties of the Company. References in this Agreement
to the “Company” refer to Invitae Corporation and its wholly owned subsidiaries,
except as otherwise indicated herein or as the context otherwise requires. The
Company hereby represents and warrants to the Investors that, except (i) as
contemplated by the Transaction Documents, (ii) as set forth in Schedule 4
hereto (the “Disclosure Schedule”) or (iii) as described in the Company’s
filings with the SEC pursuant to the 1934 Act (the “SEC Filings”) (excluding any
disclosures set forth under the headings “Risk Factors,” or disclosure of risks
set forth in any “forward-looking statements” disclaimer, or disclosures in any
other statements that are similarly cautionary or predictive in nature; it being
understood that any factual information contained within such headings,
disclosure or statements shall not be excluded), which qualify these
representations and warranties in their entirety, as follows.

4.1 Organization, Good Standing and Qualification. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now conducted and to own or lease its
properties. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property makes such qualification or
leasing necessary unless the failure to so qualify has not had and would not
reasonably be expected to have a Material Adverse Effect. Invitae Canada Inc.,
Patient Crossroads, Inc., and Ommdom Inc. are the only subsidiaries of the
Company and each is wholly-owned by the Company. Each of the Company’s
subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite power and
authority to carry on its business as now conducted and to own or lease its
properties. Each of the Company’s subsidiaries is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property makes such
qualification or leasing necessary unless the failure to so qualify has not had
and would not reasonably be expected to have a Material Adverse Effect. All of
the issued and outstanding capital stock of the Company’s subsidiaries has been
duly authorized and validly issued, is fully paid and nonassessable and is owned
by the Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance or adverse claim.

4.2 Authorization. The Company has the requisite corporate power and authority
and, except for filing the Certificate of Designation with the Secretary of
State of the State of Delaware, has taken all requisite corporate action
necessary for, and no further action on the part of the Company, its officers,
directors and stockholders is necessary for, (i) the authorization, execution
and delivery of the Transaction Documents, (ii) the authorization of the
performance of all obligations of the Company hereunder or thereunder, and
(iii) the authorization, issuance (or reservation for issuance with respect to
the Conversion Shares) and delivery of the Shares and the Preferred Shares. The
Transaction Documents constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability, relating to or affecting creditors’
rights generally and to general equitable principles.

4.3 Capitalization. The Company is authorized under its Certificate of
Incorporation to issue 400,000,000 shares of Common Stock and 20,000,000 shares
of preferred stock. The Company’s disclosure of its issued and outstanding
capital stock in its most recent SEC Filing containing such disclosure was
accurate in all material respects as of the date indicated in such SEC
Filing. All of the issued and outstanding shares of the Company’s capital stock
have been duly authorized and validly issued and are fully paid and
nonassessable; none of such shares were issued in violation of any pre-emptive
rights; and such shares were issued in compliance in all material respects with
applicable state and federal securities law and any rights of third parties. No
Person is entitled to pre-emptive or similar statutory or contractual rights
with respect to the issuance by the Company of any securities of the Company,
including, without limitation, the Securities. There are no outstanding
warrants, options, convertible securities or other rights, agreements or
arrangements of any character under which the Company is or may be obligated to
issue any equity securities of any kind, except as contemplated by this
Agreement. Except for the Registration Rights Agreement, there are no voting
agreements, buy-sell agreements, option or right of first purchase agreements or
other agreements of any kind among the Company and any of the securityholders of
the Company relating to the securities of the Company held by them. Except as
provided in the Registration Rights Agreement, and except as provided in that
certain Fifth Amended and Restated Investors’ Rights Agreement, dated as of
August 26, 2014, as amended, among the Company and certain investors signatory
thereto, no Person has the right to require the Company to register any
securities of the Company under the 1933 Act, whether on a demand basis or in
connection with the registration of securities of the Company for its own
account or for the account of any other Person.

 

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The issuance and sale of the Securities will not obligate the Company to issue
shares of Common Stock or other securities to any other Person (other than the
Investors) and will not result in the adjustment of the exercise, conversion,
exchange or reset price of any outstanding security.

The Company does not have outstanding stockholder purchase rights or “poison
pill” or any similar arrangement in effect giving any Person the right to
purchase any equity interest in the Company upon the occurrence of certain
events.

4.4 Valid Issuance. The Shares have been duly and validly authorized and, when
issued and paid for pursuant to this Agreement, will be validly issued, fully
paid and nonassessable, and shall be free and clear of all encumbrances and
restrictions (other than those created by the Investors), except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws. Upon the filing of the Certificate of Designation
with the Secretary of State of Delaware, the Preferred Shares will have been
duly and validly authorized and, when issued and paid for pursuant to this
Agreement, will be validly issued, fully paid and nonassessable, and shall be
free and clear of all encumbrances and restrictions (other than those created by
the Investors), except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws. Upon the due conversion of
the Preferred Shares, the Conversion Shares will be validly issued, fully paid
and non-assessable free and clear of all encumbrances and restrictions, except
for restrictions on transfer set forth in the Transaction Documents or imposed
by applicable securities laws and except for those created by the Investors. The
Company has reserved a sufficient number of shares of Common Stock for issuance
upon the conversion of the Preferred Shares.

4.5 Consents. Except for the filing of the Certificate of Designation with the
Secretary of State of Delaware, the execution, delivery and performance by the
Company of the Transaction Documents and the offer, issuance and sale of the
Securities require no consent of, action by or in respect of, or filing with,
any Person, governmental body, agency, or official other than (a) filings that
have been made pursuant to applicable state securities laws, (b) post-sale
filings pursuant to applicable state and federal securities laws, (c) filings
pursuant to the rules and regulations of NYSE and (d) filing of the registration
statement required to be filed by the Registration Rights Agreement, each of
which the Company has filed or undertakes to file within the applicable
time. Subject to the accuracy of the representations and warranties of each
Investor set forth in Section 5 hereof, the Company has taken all action
necessary to exempt (i) the issuance and sale of the Securities, (ii) the
issuance of the Conversion Shares upon due conversion of the Preferred Shares
and (iii) the other transactions contemplated by the Transaction Documents from
the provisions of any stockholder rights plan or other “poison pill”
arrangement, any anti-takeover, business combination or control share law or
statute binding on the Company or to which the Company or any of its assets and
properties is subject that is or could reasonably be expected to become
applicable to the Investors as a result of the transactions contemplated hereby,
including without limitation, the issuance of the Securities and the ownership,
disposition or voting of the Securities by the Investors or the exercise of any
right granted to the Investors pursuant to this Agreement or the other
Transaction Documents.

4.6 No Material Adverse Change. Since March 31, 2017, except as described in the
SEC Filings, there has not been:

(i) any change in the consolidated assets, liabilities, financial condition or
operating results of the Company from that reflected in the financial statements
included in the Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2017, except for changes in the ordinary course of business which have
not had and would not reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate;

(ii) any declaration or payment by the Company of any dividend, or any
authorization or payment by the Company of any distribution, on any of the
capital stock of the Company, or any redemption or repurchase by the Company of
any securities of the Company;

 

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(iii) any material damage, destruction or loss, whether or not covered by
insurance, to any assets or properties of the Company;

(iv) any waiver, not in the ordinary course of business, by the Company of a
material right or of a material debt owed to it;

(v) any satisfaction or discharge of any lien, claim or encumbrance or payment
of any obligation by the Company, except in the ordinary course of business and
which is not material to the assets, properties, financial condition, operating
results or business of the Company (as such business is presently conducted);

(vi) any change or amendment to the Company’s Restated Certificate of
Incorporation or Amended and Restated Bylaws, or material change to any material
contract or arrangement by which the Company is bound or to which any of its
assets or properties is subject;

(vii) any material labor difficulties or, to the Company’s Knowledge, labor
union organizing activities with respect to employees of the Company;

(viii) any material transaction entered into by the Company other than in the
ordinary course of business;

(ix) the loss of the services of any key employee, or material change in the
composition or duties of the senior management of the Company; or

(x) any other event or condition of any character that has had or would
reasonably be expected to have a Material Adverse Effect.

4.7 SEC Filings. The Company has filed all reports, schedules, forms, statements
and other documents required to be filed by the Company under the 1934 Act,
including pursuant to Section 13(a) or 15(d) thereof, for the one year preceding
the date hereof (or such shorter period as the Company was required by law or
regulation to file such material). At the time of filing thereof, such filings
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC thereunder and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.

4.8 No Conflict, Breach, Violation or Default. The execution, delivery and
performance of the Transaction Documents by the Company and the issuance and
sale of the Securities in accordance with the provisions thereof will not,
except for such violations, conflicts or defaults as would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect,
(i) conflict with or result in a breach or violation of (a) any of the terms and
provisions of, or constitute a default under, the Company’s Restated Certificate
of Incorporation or the Company’s Amended and Restated Bylaws, both as in effect
on the date hereof (true and complete copies of which have been made available
to the Investors through the Electronic Data Gathering, Analysis, and Retrieval
system (the “EDGAR system”)), or (b) assuming the accuracy of the
representations and warranties in Section 5, any applicable statute, rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company or its subsidiaries, or any of
their assets or properties, or (ii) conflict with, or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, result in the creation of any lien, encumbrance or other adverse claim
upon any of the properties or assets of the Company or its subsidiaries or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any Material Contract

4.9 Tax Matters. The Company and its subsidiaries have timely prepared and filed
all tax returns required to have been filed by them with all appropriate
governmental agencies and timely paid all taxes shown thereon or otherwise owed
by them. The charges, accruals and reserves on the books of the Company in
respect of taxes for all fiscal periods are adequate in all material respects,
and there are no material unpaid assessments against the Company nor, to the
Company’s Knowledge, any basis for the assessment of any additional

 

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taxes, penalties or interest for any fiscal period or audits by any federal,
state or local taxing authority except for any assessment which is not material
to the Company. All taxes and other assessments and levies that the Company is
required to withhold or to collect for payment have been duly withheld and
collected and paid to the proper governmental entity or third party when
due. There are no tax liens or claims pending or, to the Company’s Knowledge,
threatened against the Company or any of its assets or property. There are no
outstanding tax sharing agreements or other such arrangements between the
Company and any other corporation or entity.

4.10 Title to Properties. The Company and each of its subsidiaries has good and
marketable title to all real properties and all other properties and assets
owned by them, in each case free from liens, encumbrances and defects, except
such as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect; and the Company and each of its subsidiaries
hold any leased real or personal property under valid and enforceable leases
with no exceptions, except such as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

4.11 Certificates, Authorities and Permits. The Company possesses adequate
certificates, authorities or permits issued by appropriate governmental agencies
or bodies necessary to conduct the business now operated by it, except where
failure to so possess would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect. The Company has not received
any written notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that would reasonably be expected to
have a Material Adverse Effect, individually or in the aggregate, on the
Company.

4.12 Labor Matters.

(a) The Company is not party to or bound by any collective bargaining agreements
or other agreements with labor organizations. To the Company’s Knowledge, the
Company has not violated in any material respect any laws, regulations, orders
or contract terms affecting the collective bargaining rights of employees or
labor organizations, or any laws, regulations or orders affecting employment
discrimination, equal opportunity employment, or employees’ health, safety,
welfare, wages and hours.

(b) No material labor dispute with the employees of the Company, or with the
employees of any principal supplier, manufacturer, customer or contractor of the
Company, exists or, to the Company’s Knowledge, is threatened or imminent.

4.13 Intellectual Property. The Company owns, possesses, licenses or has other
rights to use, the patents and patent applications, copyrights, trademarks,
service marks, trade names, service names and trade secrets described in the SEC
Filings as necessary or material for use in connection with its business and
which the failure to so have would have or reasonably be expected to result in a
Material Adverse Effect (collectively, the “Company Intellectual
Property”). There is no pending or, to the Company’s Knowledge, threatened
action, suit, proceeding or claim by any Person that the Company’s business as
now conducted infringes or otherwise violates any patent, trademark, copyright,
trade secret or other proprietary rights of another. To the Company’s Knowledge,
there is no existing infringement by another Person of any of the Company
Intellectual Property that would have or would reasonably be expected to have a
Material Adverse Effect. The Company has taken reasonable security measures to
protect the secrecy, confidentiality and value of all of the Company
Intellectual Property, except where failure to do so would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

4.14 Environmental Matters. The Company is not in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, “Environmental Laws”), has not released any hazardous substances
regulated by Environmental Law onto any real property that it owns or operates,
and has not received any written notice or claim it is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, which violation,
release, notice, claim, or liability would reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect, and to the Company’s
Knowledge, there is no pending or threatened investigation that would reasonably
be expected to lead to such a claim.

 

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4.15 Legal Proceedings. There are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or
its subsidiaries is or may reasonably be expected to become a party or to which
any property of the Company or its subsidiaries is or may reasonably be expected
to become the subject that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.

4.16 Financial Statements. The financial statements included in each SEC Filing
comply in all material respects with applicable accounting requirements and the
rules and regulations of the SEC with respect thereto as in effect at the time
of filing (or to the extent corrected by a subsequent restatement) and present
fairly, in all material respects, the consolidated financial position of the
Company as of the dates presented and its consolidated results of operations and
cash flows for the periods presented, subject in the case of unaudited financial
statements to normal, year-end audit adjustments, and such consolidated
financial statements have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”) (except as may be disclosed therein or in the
notes thereto, and except that the unaudited financial statements may not
contain all footnotes required by GAAP, and, in the case of quarterly financial
statements, except as permitted by Form 10-Q under the 1934 Act). Except as set
forth in the financial statements of the Company included in the SEC Filings
filed prior to the date hereof, the Company has not incurred any liabilities,
contingent or otherwise, except those incurred in the ordinary course of
business, consistent (as to amount and nature) with past practices since the
date of such financial statements, none of which, individually or in the
aggregate, have had or would reasonably be expected to have a Material Adverse
Effect.

4.17 Insurance Coverage. The Company maintains in full force and effect
insurance coverage that is customary for comparably situated companies for the
business being conducted and properties owned or leased by the Company, and the
Company reasonably believes such insurance coverage to be adequate against all
liabilities, claims and risks against which it is customary for comparably
situated companies to insure.

4.18 Compliance with NYSE Continued Listing Requirements. The Company is in
compliance with applicable NYSE continued listing requirements. There are no
proceedings pending or, to the Company’s Knowledge, threatened against the
Company relating to the continued listing of the Common Stock on NYSE and the
Company has not received any notice of, nor to the Company’s Knowledge is there
any reasonable basis for, the delisting of the Common Stock from NYSE.

4.19 Brokers and Finders. Other than the Placement Agents, no Person will have,
as a result of the transactions contemplated by the Transaction Documents, any
valid right, interest or claim against or upon the Company or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company. No Investor shall
have any obligation with respect to any fees, or with respect to any claims made
by or on behalf of other Persons for fees, in each case of the type contemplated
by this Section 4.19 that may be due in connection with the transactions
contemplated by this Agreement or the Transaction Documents.

4.20 No Directed Selling Efforts or General Solicitation. Neither the Company
nor any Person acting on its behalf has conducted any general solicitation or
general advertising (as those terms are used in Regulation D) in connection with
the offer or sale of any of the Securities.

4.21 No Integrated Offering. Neither the Company nor its subsidiaries nor any
Person acting on their behalf has, directly or indirectly, made any offers or
sales of any Company security or solicited any offers to buy any Company
security, under circumstances that would adversely affect reliance by the
Company on Section 4(a)(2) for the exemption from registration for the
transactions contemplated hereby or would require registration of the Securities
under the 1933 Act.

4.22 Private Placement. Assuming the accuracy of the representations and
warranties of the Investors set forth in Section 5, the offer and sale of the
Securities to the Investors as contemplated hereby is exempt from the
registration requirements of the 1933 Act. The issuance and sale of the
Securities does not contravene the rules and regulations of NYSE.

 

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4.23 Questionable Payments. Neither the Company nor its subsidiaries nor, to the
Company’s Knowledge, any of their current or former directors, officers,
employees, agents or other Persons acting on behalf of the Company or its
subsidiaries, has on behalf of the Company or its subsidiaries in connection
with its business: (a) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(b) made any direct or indirect unlawful payments to any governmental officials
or employees from corporate funds; (c) established or maintained any unlawful or
unrecorded fund of corporate monies or other assets which is in violation of
law; (d) made any false or fictitious entries on the books and records of the
Company; or (e) made any unlawful bribe, rebate, payoff, influence payment,
kickback or other unlawful payment of any nature.

4.24 Transactions with Affiliates. None of the executive officers or directors
of the Company and, to the Company’s Knowledge, none of the employees of the
Company is presently a party to any transaction with the Company (other than as
holders of equity awards, and for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Company’s Knowledge, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

4.25 Internal Controls. The Company has established and maintains disclosure
controls and procedures (as defined in Rules 13a-15 and 15d-15 under the 1934
Act), which are designed to ensure that material information relating to the
Company, including its subsidiaries, is made known to the Company’s principal
executive officer and its principal financial officer by others within those
entities. Since the end of the Company’s most recent audited fiscal year, there
have been no significant deficiencies or material weaknesses in the Company’s
internal control over financial reporting (whether or not remediated) and no
change in the Company’s internal control over financial reporting that has
materially affected, or would reasonably be expected to materially affect, the
Company’s internal control over financial reporting. The Company is not aware of
any change in its internal controls over financial reporting that has occurred
during its most recent fiscal quarter that has materially affected, or would
reasonably be expected to materially affect, the Company’s internal control over
financial reporting.

4.26 Disclosures. Neither the Company nor any Person acting on its behalf has
provided the Investors or their agents or counsel with any information with
respect to the transactions contemplated hereby that constitutes or would
reasonably be expected to constitute material, non-public information concerning
the Company or its subsidiaries, other than with respect to the transactions
contemplated hereby and as described on the Disclosure Schedule, which will be
disclosed in the Press Release (as defined below). The SEC Filings and the slide
presentation presented to the Investors by the Company in connection with the
offer and sale of the Shares, when considered together, do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading. The Company understands and confirms
that the Investors will rely on the foregoing representations in effecting
transactions in securities of the Company.

4.27 Required Filings. Except for the transactions contemplated by this
Agreement, including the acquisition of the Securities contemplated hereby, no
event or circumstance has occurred or information exists with respect to the
Company or its business, properties, operations or financial condition, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed (assuming for this purpose that the SEC Filings are being incorporated
by reference into an effective registration statement filed by the Company under
the 1933 Act).

4.28 Investment Company. The Company is not required to be registered as, and is
not an Affiliate of, and immediately following the Closing will not be required
to register as, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

4.29 Manipulation of Price. The Company has not, and, to the Company’s
Knowledge, no Person acting on its behalf has taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of any
of the Securities.

 

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4.30 Anti-Bribery and Anti-Money Laundering Laws. Each of the Company, its
subsidiaries and any of their respective officers, directors, supervisors,
managers, agents, or employees, are and have at all times been in compliance
with and its participation in the offering will not violate: (A) anti-bribery
laws, including but not limited to, any applicable law, rule, or regulation of
any locality, including but not limited to any law, rule, or regulation
promulgated to implement the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, signed December 17,
1997, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the
U.K. Bribery Act 2010, or any other law, rule or regulation of similar purposes
and scope or (B) anti-money laundering laws, including but not limited to,
applicable federal, state, international, foreign or other laws, regulations or
government guidance regarding anti-money laundering, including, without
limitation, Title 18 U.S. Code section 1956 and 1957, the Patriot Act, the Bank
Secrecy Act, and international anti-money laundering principles or procedures by
an intergovernmental group or organization, such as the Financial Action Task
Force on Money Laundering, of which the United States is a member and with which
designation the United States representative to the group or organization
continues to concur, all as amended, and any executive order, directive, or
regulation pursuant to the authority of any of the foregoing, or any orders or
licenses issued thereunder.

4.31 Compliance. The Company is not (i) in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company under), nor has the
Company received written notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) in violation of any judgment, decree or order of any court, arbitrator or
governmental body specifically naming the Company or (iii) in violation of any
statute, rule, ordinance or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as would not have
or reasonably be expected to result in a Material Adverse Effect.

4.32 No Bad Actors. No “bad actor” disqualifying event described in
Rule 506(d)(1)(i)-(viii) of the 1933 Act (a “Disqualification Event”) is
applicable to the Company or, to the Company’s knowledge, any Company Covered
Person, except (i) for a Disqualification Event as to which
Rule 506(d)(2)(ii—iv) or (d)(3) is applicable and (ii) no such representation is
made with respect to the Placement Agents, or any of their respective general
partners, managing members, directors, executive officers or other officers.

5. Representations and Warranties of the Investors. Each of the Investors hereby
severally, and not jointly, represents and warrants to the Company that:

5.1 Organization and Existence. Such Investor is a validly existing corporation,
limited partnership or limited liability company and has all requisite
corporate, partnership or limited liability company power and authority to enter
into and consummate the transactions contemplated by the Transaction Documents
and to carry out its obligations hereunder and thereunder, and to invest in the
Securities pursuant to this Agreement.

5.2 Authorization. The execution, delivery and performance by such Investor of
the Transaction Documents to which such Investor is a party have been duly
authorized and each has been duly executed and when delivered will constitute
the valid and legally binding obligation of such Investor, enforceable against
such Investor in accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability, relating to or affecting creditors’ rights generally and
to general equitable principles.

5.3 Purchase Entirely for Own Account. The Securities to be received by such
Investor hereunder will be acquired for such Investor’s own account, not as
nominee or agent, and not with a view to the resale or distribution of any part
thereof in violation of the 1933 Act, and such Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same in
violation of the 1933 Act without prejudice, however, to such Investor’s right
at all times to sell or otherwise dispose of all or any part of such Securities
in compliance with applicable federal and state securities laws. Nothing
contained herein shall be deemed a representation or warranty by such Investor
to hold the Securities for any period of time. Such Investor is not a
broker-dealer registered with the SEC under the 1934 Act or an entity engaged in
a business that would require it to be so registered.

 

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5.4 Investment Experience. Such Investor acknowledges that it can bear the
economic risk and complete loss of its investment in the Securities and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment contemplated hereby.

5.5 Disclosure of Information. Such Investor has had an opportunity to receive,
review and understand all information related to the Company requested by it and
to ask questions of and receive answers from the Company regarding the Company,
its business and the terms and conditions of the offering of the Securities, and
has conducted and completed its own independent due diligence. Such Investor
acknowledges that copies of the SEC Filings are available on the EDGAR
system. Based on the information such Investor has deemed appropriate, and
without reliance upon any Placement Agent, it has independently made its own
analysis and decision to enter into the Transaction Documents. Such Investor is
relying exclusively on its own sources of information, investment analysis and
due diligence (including professional advice it deems appropriate) with respect
to the execution, delivery and performance of the Transaction Documents, the
Securities and the business, condition (financial and otherwise), management,
operations, properties and prospects of the Company, including but not limited
to all business, legal, regulatory, accounting, credit and tax matters. Neither
such inquiries nor any other due diligence investigation conducted by such
Investor shall modify, limit or otherwise affect such Investor’s right to rely
on the Company’s representations and warranties contained in this Agreement.

5.6 Restricted Securities. Such Investor understands that the Securities are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the 1933 Act only in
certain limited circumstances.

5.7 Legends. It is understood that, except as provided below, certificates
evidencing the Securities may bear the following or any similar legend:

(a) “The securities represented hereby have not been registered with the
Securities and Exchange Commission or the securities commission of any state in
reliance upon an exemption from registration under the Securities Act of 1933,
as amended, and, accordingly, may not be transferred unless (i) such securities
have been registered for sale pursuant to the Securities Act of 1933, as
amended, (ii) such securities may be sold pursuant to Rule 144, or (iii) the
Company has received an opinion of counsel reasonably satisfactory to it that
such transfer may lawfully be made without registration under the Securities Act
of 1933, as amended.”

(b) If required by the authorities of any state in connection with the issuance
of sale of the Securities, the legend required by such state authority.

5.8 Accredited Investor. Such Investor is an (a) “accredited investor” within
the meaning of Rule 501(a) (1), (2), (3) or (7) under the 1933 Act and (b) an
“Institutional Account” as defined in FINRA Rule 4512(c) . Such Investor has
executed and delivered to the Company a questionnaire in substantially the form
attached hereto as Exhibit D (the “Investor Questionnaire”), which such Investor
represents and warrants is true, correct and complete. Such Investor is a
sophisticated institutional investor with sufficient knowledge and experience in
investing in private equity transactions to properly evaluate the risks and
merits of its purchase of the Securities.

5.9 Placement Agents. Such Investor hereby acknowledges and agrees that (a) each
of the Placement Agents is acting solely as placement agent in connection with
the execution, delivery and performance of the Transaction Documents and is not
acting as an underwriter or in any other capacity and is not and shall not be
construed as a fiduciary for such Investor, the Company or any other person or
entity in connection with the execution, delivery and performance of the
Transaction Documents, (b) no Placement Agent has made or will make any
representation or warranty, whether express or implied, of any kind or
character, or has provided any advice or recommendation in connection with the
execution, delivery and performance of the Transaction Documents, (c) no
Placement Agent will have any responsibility with respect to (i) any
representations, warranties or agreements made by any person or entity under or
in connection with the execution, delivery and performance of the Transaction
Documents, or the execution, legality, validity or enforceability (with respect
to any person) thereof, or (ii) the business, affairs, financial condition,
operations, properties or prospects of, or any other matter concerning the
Company, and (d) no Placement Agent will have any liability or obligation
(including without limitation, for or with

 

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respect to any losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, costs, expenses or disbursements incurred by such Investor,
the Company or any other person or entity), whether in contract, tort or
otherwise, to such Investor, or to any person claiming through it, in respect of
the execution, delivery and performance of the Transaction Documents.

5.10 No General Solicitation. Such Investor did not learn of the investment in
the Securities as a result of any general solicitation or general advertising.

5.11 Brokers and Finders. No Person will have, as a result of the transactions
contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company or an Investor for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of such Investor.

5.12 Short Sales and Confidentiality. Other than consummating the transactions
contemplated hereunder, such Investor has not, nor has any Person acting on
behalf of or pursuant to any understanding with such Investor, directly or
indirectly executed any purchases or sales, including Short Sales, of the
securities of the Company or of any other entity on the basis of confidential
information provided by the Company or a Placement Agent to such Investor
transaction (including the existence and terms of this transaction and other
non-public information), (the “Confidential Information”) during the period
commencing as of the time that such Investor was first contacted by the Company,
a Placement Agent or any other Person regarding the transactions contemplated
hereby and ending immediately prior to the date hereof. Notwithstanding the
foregoing, in the case of an Investor that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Investor’s
assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such
Investor’s assets, the representation set forth above shall only apply with
respect to the portion of assets managed by the portfolio manager that made the
investment decision to purchase the Securities covered by this Agreement. Other
than to other Persons party to this Agreement, such Investor has maintained and
will continue to maintain the confidentiality of the Confidential Information,
and such Investor agrees that it will not use any Confidential Information in
violation of applicable securities laws.

5.13 No Government Recommendation or Approval. Such Investor understands that no
United States federal or state agency, or similar agency of any other country,
has reviewed, approved, passed upon, or made any recommendation or endorsement
of the Company or the purchase of the Securities.

5.14 No Intent to Effect a Change of Control. Such Investor has no present
intent to effect a “change of control” of the Company as such term is understood
under the rules promulgated pursuant to Section 13(d) of the 1934 Act.

5.15 No Rule 506 Disqualifying Activities. Such Investor has not taken any of
the actions set forth in, and is not subject to, the disqualification provisions
of Rule 506 (d)(1) of the 1933 Act.

5.16 Residency. Such Investor’s office in which its investment decision with
respect to the Securities was made is located at the address immediately below
such Investor’s name on its signature page hereto.

5.17 No Conflicts. The execution, delivery and performance by such Investor of
the Transaction Documents and the consummation by such Investor of the
transactions contemplated hereby and thereby will not (i) result in a violation
of the organizational documents of such Investor or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Investor is a party, or (iii) result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and
state securities laws) applicable to such Investor, except in the case of
clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations
which would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the ability of such Investor to perform its
obligations hereunder.

 

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6. Conditions to Closing.

6.1 Conditions to the Investors’ Obligations. The obligation of each Investor to
purchase Shares and Preferred Shares at the Closing is subject to the
fulfillment to such Investor’s satisfaction, on or prior to the Closing Date, of
the following conditions, any of which may be waived by such Investor (as to
itself only):

(a) The representations and warranties made by the Company in Section 4 hereof
shall be true and correct in all material respects as of the date hereof and as
of the Closing Date, as though made on and as of such date, except to the extent
any such representation or warranty expressly speaks as of an earlier date, in
which case such representation or warranty shall be true and correct in all
material respects as of such earlier date. The Company shall have performed in
all material respects all obligations and covenants herein required to be
performed by it on or prior to the Closing Date.

(b) The Company shall have obtained any and all consents, permits, approvals,
registrations and waivers necessary for consummation of the purchase and sale of
the Securities and the consummation of the other transactions contemplated by
the Transaction Documents, all of which shall be in full force and effect.

(c) The Company shall have executed and delivered the Registration Rights
Agreement.

(d) The Company shall have filed with NYSE a Supplemental Listing Application
for the listing of the Shares and the Conversion Shares, and NYSE shall have
raised no objection to the consummation of the transactions contemplated by the
Transaction Documents.

(e) The Certificate of Designation shall have been filed with the Secretary of
State of Delaware and shall have become effective, and the Company shall have
provided a filed copy thereof to any Investor purchasing Preferred Shares.

(f) No judgment, writ, order, injunction, award or decree of or by any court, or
judge, justice or magistrate, including any bankruptcy court or judge, or any
order of or by any governmental authority, shall have been issued, and no action
or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated hereby
or in the other Transaction Documents.

(g) The Company shall have delivered a Certificate, executed on behalf of the
Company by its Chief Executive Officer or its Chief Financial Officer, dated as
of the Closing Date, certifying to the fulfillment of the conditions specified
in subsections (a), (b), (d), (e), (f), (j) and (k) of this Section 6.1.

(h) The Company shall have delivered a Certificate, executed on behalf of the
Company by its Secretary, dated as of the Closing Date, certifying the
resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the other Transaction Documents
and the issuance of the Securities, certifying the current versions of the
Certificate of Incorporation and Bylaws of the Company and certifying as to the
signatures and authority of persons signing the Transaction Documents and
related documents on behalf of the Company.

(i) The Investors shall have received an opinion from Pillsbury Winthrop Shaw
Pittman LLP, the Company’s counsel, dated as of the Closing Date, in form and
substance reasonably acceptable to the Investors and addressing such legal
matters as the Investors may reasonably request.

(j) There shall have been no Material Adverse Effect with respect to the Company
since the date hereof.

(k) No stop order or suspension of trading shall have been imposed by NYSE, the
SEC or any other governmental or regulatory body with respect to public trading
in the Common Stock.

 

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6.2 Conditions to Obligations of the Company. The Company’s obligation to sell
and issue Securities at the Closing is subject to the fulfillment to the
satisfaction of the Company on or prior to the Closing Date of the following
conditions, any of which may be waived by the Company:

(a) The representations and warranties made by the Investors in Section 5 hereof
shall be true and correct as of the date hereof and on the Closing Date with the
same force and effect as if they had been made on and as of said date. The
Investors shall have performed in all material respects all obligations and
covenants herein required to be performed by them on or prior to the Closing
Date.

(b) The Investors shall have executed and delivered the Registration Rights
Agreement and each Investor Questionnaire.

(c) Any Investor purchasing Securities at the Closing shall have paid in full
its purchase price to the Company.

6.3 Termination of Obligations to Effect Closing; Effects.

(a) The obligations of the Company, on the one hand, and the Investors, on the
other hand, to effect the Closing shall terminate as follows:

(i) Upon the mutual written consent of the Company and Investors that agreed to
purchase a majority of the Securities to be issued and sold pursuant to this
Agreement;

(ii) By the Company if any of the conditions set forth in Section 6.2 shall have
become incapable of fulfillment, and shall not have been waived by the Company;

(iii) By an Investor (with respect to itself only) if any of the conditions set
forth in Section 6.1 shall have become incapable of fulfillment, and shall not
have been waived by the Investor; or

(iv) By either the Company or any Investor (with respect to itself only) if the
Closing has not occurred on or prior to August 15, 2017;

provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party’s seeking to
terminate its obligation to effect the Closing.

(b) In the event of termination by the Company or any Investor of its
obligations to effect the Closing pursuant to this Section 6.3, written notice
thereof shall be given to the other Investors by the Company and the other
Investors shall have the right to terminate their obligations to effect the
Closing upon written notice to the Company and the other Investors. Nothing in
this Section 6.3 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement or the other
Transaction Documents or to impair the right of any party to compel specific
performance by any other party of its obligations under this Agreement or the
other Transaction Documents.

7. Covenants and Agreements of the Company.

7.1 Reservation of Common Stock. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock, solely for
the purpose of providing for the conversion of the Preferred Shares, such number
of shares of Common Stock as shall from time to time equal the number of shares
sufficient to permit the conversion of the Preferred Shares issued pursuant to
this Agreement in accordance with their respective terms.

 

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7.2 No Conflicting Agreements. The Company will not take any action, enter into
any agreement or make any commitment that would conflict or interfere in any
material respect with the Company’s obligations to the Investors under the
Transaction Documents.

7.3 NYSE Listing. The Company will use commercially reasonable efforts to
continue the listing and trading of its Common Stock on NYSE and, in accordance
therewith, will use commercially reasonable efforts to comply in all material
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of such market or exchange, as applicable.

7.4 Termination of Covenants. The provisions of Sections 7.2 and 7.3 shall
terminate and be of no further force and effect on the date on which the
Company’s obligations under the Registration Rights Agreement to register or
maintain the effectiveness of any registration covering the Registrable
Securities (as such term is defined in the Registration Rights Agreement) shall
terminate.

7.5 Removal of Legends.

(a) In connection with any sale, assignment, transfer or other disposition of
the Shares by an Investor pursuant to Rule 144 or pursuant to any other
exemption under the 1933 Act such that the purchaser acquires freely tradable
shares and upon compliance by the Investor with the requirements of this
Agreement, if requested by the Investor, the Company shall cause the transfer
agent for the Common Stock (the “Transfer Agent”) to remove any restrictive
legends related to the book entry account holding such Shares and make a new,
unlegended entry for such book entry Shares sold or disposed of without
restrictive legends, provided that the Company has received from the Investor
customary representations and other documentation reasonably acceptable to the
Company in connection therewith. Subject to receipt from the Investor by the
Company and the Transfer Agent of customary representations and other
documentation reasonably acceptable to the Company and the Transfer Agent in
connection therewith, upon the earliest of such time as the Shares (i) have been
sold or transferred pursuant to an effective registration statement, (ii) have
been sold pursuant to Rule 144, or (iii) are eligible for resale under
Rule 144(b)(1) or any successor provision (such earliest date, the “Effective
Date”), the Company shall (A) deliver to the Transfer Agent irrevocable
instructions that the Transfer Agent shall make a new, unlegended entry for such
book entry Shares, and (B) cause its counsel to deliver to the Transfer Agent
one or more opinions to the effect that the removal of such legends in such
circumstances may be effected under the 1933 Act if required by the Transfer
Agent to effect the removal of the legend in accordance with the provisions of
this Agreement. The Company agrees that following the Effective Date or at such
time as such legend is no longer required under this Section 7.5, it will,
within three Trading Days of the delivery by an Investor to the Company or the
Transfer Agent of a certificate representing shares issued with a restrictive
legend and receipt from the Investor by the Company and the Transfer Agent of
customary representations and other documentation reasonably acceptable to the
Company and the Transfer Agent in connection therewith, deliver or cause to be
delivered to such Investor a certificate representing such Shares that is free
from all restrictive and other legends. Shares subject to legend removal
hereunder may be transmitted by the Transfer Agent to the Investor by crediting
the account of the Investor’s prime broker with the DTC System as directed by
such Investor. The Company shall be responsible for the fees of its Transfer
Agent and all DTC fees associated with such issuance.

(b) Each Investor, severally and not jointly with the other Investors, agrees
with the Company (i) that such Investor will sell any Shares pursuant to either
the registration requirements of the 1933 Act, including any applicable
prospectus delivery requirements, or an exemption therefrom, (ii) that if Shares
are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein and (iii) that if, after the
effective date of the registration statement covering the resale of the Shares,
such registration statement is not then effective and the Company has provided
notice to such Investor to that effect, such Investor will sell Shares only in
compliance with an exemption from the registration requirements of the 1933 Act.

7.6 Subsequent Equity Sales.

(a) From the date hereof until ninety (90) days after the Closing Date, without
the consent of the Required Investors, the Company shall not (A) issue shares of
Common Stock or Common Stock Equivalents or (B) file with the SEC a registration
statement under the 1933 Act relating to any shares of Common Stock or Common
Stock Equivalents, except pursuant to the terms of agreements to which the
Company is currently

 

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a party or as described in the Disclosure Schedule. Notwithstanding the
foregoing, the provisions of this Section 7.6(a) shall not apply to (i) the
issuance of the Securities hereunder, (ii) the issuance of Common Stock or
Common Stock Equivalents upon the conversion or exercise of any securities of
the Company outstanding or issuable on the date hereof or outstanding or
issuable pursuant to clause (iii) or (v) below, (iii) the issuance of any Common
Stock or Common Stock Equivalents pursuant to any Company stock-based
compensation plans, (iv) the filing of a registration statement on Form S-8
under the 1933 Act to register the offer and sale of securities under any
employee benefit or equity incentive plans of the Company, or (v) the issuance
of any Common Stock or Common Stock Equivalents in connection with a transaction
described in the Disclosure Schedule.

(b) The Company shall not, and shall use its commercially reasonable efforts to
ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the 1933 Act) that will be integrated with the offer or sale of the
Securities in a manner that would require the registration under the 1933 Act of
the sale of the Securities to the Investors, or that will be integrated with the
offer or sale of the Securities for purposes of the rules and regulations of any
trading market such that it would require stockholder approval prior to the
closing of such other transaction unless stockholder approval is obtained before
the closing of such subsequent transaction.

7.7 Short Sales and Confidentiality After the Date Hereof. Each Investor
covenants that neither it nor any Affiliates acting on its behalf or pursuant to
any understanding with it will execute any Short Sales during the period from
the date hereof until the earlier of such time as (i) the transactions
contemplated by this Agreement are first publicly announced or (ii) this
Agreement is terminated in full. Each Investor covenants that until such time as
the transactions contemplated by this Agreement are publicly disclosed by the
Company, such Investor will maintain the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of
this transaction). Each Investor understands and acknowledges that the SEC
currently takes the position that coverage of Short Sales of shares of the
Common Stock “against the box” prior to effectiveness of a resale registration
statement with securities included in such registration statement would be a
violation of Section 5 of the 1933 Act, as set forth in Item 239.10 of the
Securities Act Rules Compliance and Disclosure Interpretations compiled by the
Office of Chief Counsel, Division of Corporation Finance.

8. Survival and Indemnification.

8.1 Survival. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing of the transactions
contemplated by this Agreement for the applicable statute of limitations.

8.2 Indemnification. The Company agrees to indemnify and hold harmless each
Investor and its Affiliates, and their respective directors, officers, trustees,
members, managers, employees, investment advisers and agents, from and against
any and all losses, claims, damages, liabilities and expenses (including without
limitation reasonable and documented attorney fees and disbursements and other
documented out-of-pocket expenses reasonably incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) (collectively, “Losses”) to
which such Person may become subject as a result of any breach of
representation, warranty, covenant or agreement made by or to be performed on
the part of the Company under the Transaction Documents, and will reimburse any
such Person for all such amounts as they are incurred by such Person solely to
the extent such amounts have been finally judicially determined not to have
resulted from such Person’s fraud or willful misconduct.

8.3 Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed in writing to pay such fees or expenses, (b) the indemnifying party
shall have failed to assume the defense of such claim and employ counsel
reasonably satisfactory to such person or (c) in the reasonable judgment of any
such person, based upon written advice of its counsel, a conflict of interest
exists between such person and the indemnifying party with respect to such
claims (in which case, if the person notifies the indemnifying party in writing
that such person elects

 

16

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to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such person); and provided, further, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No indemnifying party
will, except with the consent of the indemnified party, 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 from all liability in respect of such claim or litigation. No
indemnified party will, except with the consent of the indemnifying party,
consent to entry of any judgment or enter into any settlement.

9. Miscellaneous.

9.1 Successors and Assigns. This Agreement may not be assigned by a party hereto
without the prior written consent of the Company or each of the Investors, as
applicable, provided, however, that an Investor may assign its rights and
delegate its duties hereunder in whole or in part to an Affiliate or to a third
party acquiring some or all of its Securities in a transaction complying with
applicable securities laws without the prior written consent of the Company or
the other Investors, provided such assignee agrees in writing to be bound by the
provisions hereof that apply to Investors. The provisions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Without limiting the generality of the
foregoing, in the event that the Company is a party to a merger, consolidation,
share exchange or similar business combination transaction in which the Common
Stock is converted into the equity securities of another Person, from and after
the effective time of such transaction, such Person shall, by virtue of such
transaction, be deemed to have assumed the obligations of the Company hereunder,
the term “Company” shall be deemed to refer to such Person and the term
“Securities” shall be deemed to refer to the securities received by the
Investors in connection with such transaction. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective permitted successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.

9.2 Counterparts; Faxes; E-mail. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed via facsimile or e-mail, which shall be deemed an original.

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

9.4 Notices. Unless otherwise provided, any notice required or permitted under
this Agreement shall be given in writing and shall be deemed effectively given
as hereinafter described (i) if given by personal delivery, then such notice
shall be deemed given upon such delivery, (ii) if given by facsimile or e-mail,
then such notice shall be deemed given upon receipt of confirmation of complete
facsimile transmittal or confirmation of receipt of an e-mail transmission,
(iii) if given by mail, then such notice shall be deemed given upon the earlier
of (A) receipt of such notice by the recipient or (B) three days after such
notice is deposited in first class mail, postage prepaid, and (iv) if given by
an internationally recognized overnight air courier, then such notice shall be
deemed given one Business Day after delivery to such carrier. All notices shall
be addressed to the party to be notified at the address as follows, or at such
other address as such party may designate by ten days’ advance written notice to
the other party:

If to the Company:

Invitae Corporation

1400 16th Street

San Francisco, California 94103

Attention: General Counsel

email:

 

17

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With a copy to:

Pillsbury Winthrop Shaw Pittman LLP

12255 El Camino Real , Suite 300

San Diego, California 92130

Attention: Mike Hird

Fax:

If to the Investors:

To the addresses set forth on the signature pages hereto.

9.5 Expenses. Except as set forth elsewhere in the Transaction Documents, the
parties hereto shall pay their own costs and expenses in connection herewith
regardless of whether the transactions contemplated hereby are consummated; it
being understood that each of the Company and each Investor has relied on the
advice of its own respective counsel.

9.6 Amendments and Waivers. Prior to Closing, 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 a duly authorized representative of such
party. Following the Closing, any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Required Investors. Notwithstanding the
foregoing, this Agreement may not be amended and the observance of any term of
this Agreement may not be waived with respect to any Investor without the
written consent of such Investor unless such amendment or waiver applies to all
Investors in the same fashion. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon (i) prior to Closing, each Investor
that signed such amendment or waiver and (ii) following the Closing, each holder
of any Securities purchased under this Agreement at the time outstanding, and in
each case, each future holder of all such Securities and the Company.

9.7 Publicity. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the Investors
without the prior consent of the Company (which consent shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the applicable rules or regulations of any securities exchange or
securities market, in which case the Investors shall allow the Company
reasonable time to comment on such release or announcement in advance of such
issuance. Notwithstanding the foregoing, each Investor may identify the Company
and the value of such Investor’s security holdings in the Company in accordance
with applicable investment reporting and disclosure regulations without prior
notice to or consent from the Company. The Company shall not include the name of
any Investor in any press release or public announcement (which, for the
avoidance of doubt, shall not include any SEC Filing) without the prior written
consent of such Investor. By 8:30 a.m. (New York City time) on the Business Day
immediately following the date this Agreement is executed, the Company shall
issue one or more press releases (each, a “Press Release”) disclosing all
material terms of transactions contemplated by this Agreement and as included on
the Disclosure Schedule. No later than 5:30 p.m. (New York City time) on the
fourth Business Day following the date this Agreement is executed, the Company
will file a Current Report on Form 8-K (the “8-K Filing”) attaching the press
releases described in the foregoing sentence as well as copies of the
Transaction Documents. In addition, the Company will make such other filings and
notices in the manner and time required by the SEC or NYSE. The Company shall
not, and shall cause each of its officers, directors, employees and agents, not
to, provide any Investor with any such material, nonpublic information regarding
the Company from and after the filing of the Press Release without the express
prior written consent of such Investor.

9.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.

 

18

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9.9 Benefit of the Agreement. Each of the Placement Agents is an intended third
party beneficiary of the representations and warranties of each Investor set
forth in Section 5 of this Agreement.

9.10 Entire Agreement. This Agreement, including the signature pages, Exhibits,
and the other Transaction Documents constitute the entire agreement among the
parties hereof with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.

9.11 Further Assurances. The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.

9.12 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A
TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

9.13 Independent Nature of Investors’ Obligations and Rights. The obligations of
each Investor under any Transaction Document are several and not joint with the
obligations of any other Investor, and no Investor shall be responsible in any
way for the performance of the obligations of any other Investor under any
Transaction Document. The decision of each Investor to purchase Securities
pursuant to the Transaction Documents has been made by such Investor
independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute the Investors as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Documents. Each
Investor acknowledges that no other Investor has acted as agent for such
Investor in connection with making its investment hereunder and that no Investor
will be acting as agent of such Investor in connection with monitoring its
investment in the Securities or enforcing its rights under the Transaction
Documents. Each Investor shall be entitled to independently protect and enforce
its rights, including, without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Investor to be joined as an additional party in any
proceeding for such purpose. The Company acknowledges that each of the Investors
has been provided with the same Transaction Documents for the purpose of closing
a transaction with multiple Investors and not because it was required or
requested to do so by any Investor.

[remainder of page intentionally left blank]

 

19

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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their
duly authorized officers to execute this Agreement as of the date first above
written.

 

COMPANY:     INVITAE CORPORATION     By:  

/s/ Shelly D. Guyer

      Name: Shelly D. Guyer       Title: Chief Financial Officer

 

20

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INVESTOR:    667, L.P.    By: Baker Bros. Advisors LP, Management Company and
Investment Advisor to 667, L.P., pursuant to authority granted to it by Baker
Biotech Capital, L.P., general partner to 667, L.P., and not as the general
partner      

/s/ Scott L. Lessing

   By:    Scott L. Lessing, President INVESTOR:    Baker Brothers Life Sciences,
L.P.    By: Baker Bros. Advisors LP, Management Company and Investment Advisor
to BAKER BROTHERS LIFE SCIENCES, L.P., pursuant to authority granted to it by
Baker Brothers Life Sciences Capital, L.P., general partner to BAKER BROTHERS
LIFE SCIENCES, L.P., and not as the general partner      

/s/ Scott L. Lessing

   By:    Scott L. Lessing, President

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

INVESTOR:    Redmile Capital Offshore Fund, Ltd.    By:   

/s/ Jeremy Green

      Name: Jeremy Green       Title: Managing Member of the Investment Manager

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

INVESTOR:    Redmile Capital Fund, LP    By:   

/s/ Jeremy Green

      Name: Jeremy Green       Title: Managing Member of the General Partner and
the Investment Manager

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

INVESTOR:    Redmile Long Only Master Fund, LP    By:   

/s/ Jeremy Green

      Name: Jeremy Green       Title: Managing Member of the General Partner and
the Investment Manager

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

INVESTOR:    P Redmile Ltd.    By:   

/s/ Jeremy Green

      Name: Jeremy Green       Title: As Managing Member of Redmile Group, LLC -
Investment Adviser to P Redmile Ltd.

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

INVESTOR:    Redmile Capital Offshore Fund (ERISA), Ltd.    By:   

/s/ Jeremy Green

      Name: Jeremy Green       Title: Managing Member of the Investment Manager

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

INVESTOR:    Redmile Special Opportunities Fund, Ltd.    By:   

/s/ Jeremy Green

      Name: Jeremy Green       Title: Managing Member of the Investment Manager

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

INVESTOR:    Perceptive Life Sciences Master Fund LTD    By:   

/s/ James H. Mannix

      Name: James H. Mannix       Title: C.O.O.

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

INVESTOR:    Deerfield Partners, L.P.   

By: Deerfield Mgmt, L.P.

General Partner

  

By: J.E. Flynn Capital, LLC

General Partner

   By:   

/s/ David J. Clark

      Name: David J. Clark       Title: Authorized Signatory    Deerfield
International Master Fund, L.P.   

By: Deerfield Mgmt, L.P.

General Partner

  

By: J.E. Flynn Capital, LLC

General Partner

   By:   

/s/ David J. Clark

      Name: David J. Clark       Title: Authorized Signatory

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

INVESTOR:    Acuta Capital Fund, LP    By:   

/s/ Manfred Yu

      By: Manfred Yu       Name/Title: Chief Operating Officer of Acuta Capital
Partners, LLC, its general partner

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

INVESTOR:    Acuta Opportunity Fund, LP    By:   

/s/ Manfred Yu

      By: Manfred Yu       Name/Title: Chief Operating Officer of Acuta Capital
Partners, LLC, its general partner

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

INVESTOR:    OrbiMed Private Investments V, LP    By:    OrbiMed Capital GP V
LLC,       its General Partner       By: OrbiMed Advisors LLC,           its
Managing Member      

/s/ Carl Gordon

      By: Carl Gordon       Name/Title: Member

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

INVESTOR:   Broadfin Healthcare Master Fund, Ltd.     

/s/ Kevin Kotler

     By:      Name/Title: Kevin Kotler / Director

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

INVESTOR:    Stonepine Capital, L.P.    By:   

/s/ Timothy P. Lynch

      By: Managing Member, Stonepine Capital Management LLC (General Partner)   
   Name: Timothy P. Lynch

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

INVESTOR:    Prelude Opportunity Fund, LP    By:   

/s/ Cisco J. del Valle

      By: Cisco J. del Valle       Name/Title: Managing Member of General
Partner

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

INVESTOR:    Asymmetry Global Healthcare Fund, L.P.    By:   

/s/ Chris Zellner

      By:       Name/Title: Chris Zellner / COO

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

INVESTOR:    Asymmetry Global Healthcare (Master) Fund, LP    By:   

/s/ Chris Zellner

      By:       Name/Title: Chris Zellner / COO

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

INVESTOR:    Rock Springs Capital Master Fund LP    by Rock Springs general
partner LLC    By:   

/s/ Graham McPhail

      Name: Graham McPhail       Title: Managing Member       Date: 7/31/2017

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

INVESTOR:    Monashee Capital Master Fund LP    By:   

/s/ Jeff Muller

      By: Jeff Muller, CCO       Name/Title:

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

INVESTOR:    Victory RS Science Technology Fund, a series of Victory Portfolios
   By:   

/s/ Christopher K. Dyer

      By: Christopher K. Dyer       Name/Title: President

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

EXHIBIT A

Schedule of Investors

 

Investor Name   

Number of

Shares to

be
Purchased

    

Number of 

Preferred Shares

to

be Purchased

    

Aggregate 

Purchase

Price 

 

Baker Brothers Life Sciences, L.P.

        3,109,063      $ 26,427,035.50  

667, L.P.

        349,760        2,972,960.00  

Redmile Capital Offshore Fund, Ltd.

     556,900           4,733,650.00  

Redmile Capital Fund, LP

     320,900           2,727,650.00  

Redmile Long Only Master Fund, LP

     283,200           2,407,200.00  

P Redmile Ltd.

     64,900           551,650.00  

Redmile Capital Offshore Fund (ERISA), Ltd.

     47,600           404,600.00  

Redmile Special Opportunities Fund, Ltd.

     26,500           225,250.00  

Perceptive Life Sciences Master Fund LTD

     1,180,000           10,030,000.00  

Deerfield Partners, L.P.

     531,000           4,513,500.00  

Deerfield International Master Fund, L.P.

     369,000           3,136,500.00  

Acuta Capital Fund, LP

     355,500           3,021,750.00  

Acuta Opportunity Fund, LP

     94,500           803,250.00  

OrbiMed Private Investments V, LP

     350,000           2,975,000.00  

Broadfin Healthcare Master Fund, Ltd.

     235,500           2,001,750.00  

Stonepine Capital, L.P.

     235,500           2,001,750.00  

Prelude Opportunity Fund, LP

     111,638           948,923.00  

Asymmetry Global Healthcare Fund, L.P.

     100,573           854,870.50  

Asymmetry Global Healthcare (Master) Fund, LP

     7,789           66,206.50  

Rock Springs Capital Master Fund LP

     105,885           900,022.50  

Monashee Capital Master Fund LP

     105,675           898,237.50  

Victory RS Science Technology Fund, a series of Victory Portfolios

     105,675           898,237.50     

 

 

    

 

 

    

 

 

 

TOTAL

     5,188,235        3,458,823        73,499,993.00  

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

EXHIBIT B

Certificate of Designation

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

EXHIBIT C

Registration Rights Agreement

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

EXHIBIT D

INVESTOR QUESTIONNAIRE

 

To: Invitae Corporation

This Investor Questionnaire (“Questionnaire”) must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, $0.0001 par value per share (the “Securities”), of Invitae
Corporation, a Delaware corporation (the “Corporation”). The Securities are
being offered and sold by the Corporation without registration under the
Securities Act of 1933, as amended (the “Act”), and the securities laws of
certain states, in reliance on the exemption contained in Section 4(a)(2) of the
Act and in reliance on similar exemptions under applicable state laws. The
Corporation must determine that a potential investor meets certain suitability
requirements before offering or selling Securities to such investor. The purpose
of this Questionnaire is to assure the Corporation that each investor will meet
the applicable suitability requirements. The information supplied by you will be
used in determining whether you meet such criteria, and reliance upon the
private offering exemptions from registration is based in part on the
information herein supplied.

This Questionnaire does not constitute an offer to sell or a solicitation of an
offer to buy any security. Your answers will be kept strictly confidential.
However, by signing this Questionnaire, you will be authorizing the Corporation
to provide a completed copy of this Questionnaire to such parties as the
Corporation deems appropriate in order to ensure that the offer and sale of the
Securities will not result in a violation of the Act or the securities laws of
any state and that you otherwise satisfy the suitability standards applicable to
purchasers of the Securities. All potential investors must answer all applicable
questions and complete, date and sign this Questionnaire. Please print or type
your responses and attach additional sheets of paper if necessary to complete
your answers to any item.

 

PART A.    BACKGROUND INFORMATION

 

Name of Beneficial Owner of the Securities:  

 

 

Business Address:   

 

                           (Number and Street)

 

(City)    (State)    (Zip Code)

 

Telephone Number: (        )  

 

 

If a corporation, partnership, limited liability company, trust or other entity:
Type of entity:  

 

 

State of formation:  

 

     

Approximate Date of formation:

 

 

Were you formed for the purpose of investing in the Securities being offered?

Yes ____                No ____

If an individual:

 

Residence Address:  

 

                                  (Number and Street)

 

(City)    (State)    (Zip Code)

 

Telephone Number: (        )  

 

 

Age:                                            
Citizenship:                                         Where registered to
vote:                        

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

Set forth in the space provided below the state(s), if any, in the United States
in which you maintained your residence during the past two years and the dates
during which you resided in each state:

Are you a director or executive officer of the Corporation?

Yes ____                No ____

 

Social Security or Taxpayer Identification No.  

 

 

PART B.    ACCREDITED INVESTOR QUESTIONNAIRE

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

 

__   (1)    A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity; __   (2)    A broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934; __   (3)    An insurance
company as defined in Section 2(a)(13) of the Securities Act; __   (4)    An
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act; __  
(5)    A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958; __   (6)    A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000; __   (7)    An employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors; __   (8)    A private business
development company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940; __   (9)    An organization described in Section 501(c)(3) of the
Internal Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Securities,
with total assets in excess of $5,000,000; __ (10)    A trust, with total assets
in excess of $5,000,000, not formed for the specific purpose of acquiring the
Securities, whose purchase is directed by a sophisticated person who has such
knowledge and experience in financial and business matters that such person is
capable of evaluating the merits and risks of investing in the Company;

 

2

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__ (11)    A natural person whose individual net worth, or joint net worth with
that person’s spouse, at the time of his purchase exceeds $1,000,000; __ (12)   
A natural person who had an individual income in excess of $200,000 in each of
the two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year; __ (13)    An executive officer or
director of the Company; __ (14)    An entity in which all of the equity owners
qualify under any of the above subparagraphs. If the undersigned belongs to this
investor category only, list the equity owners of the undersigned, and the
investor category which each such equity owner satisfies.

 

PART C.    STOCK REGISTRATION INFORMATION

 

   Please provide the following information:   
                                     1.    The exact name in which the
Securities are to be registered (this is the name that will appear on the
Corporation’s stock transfer records). You may use a nominee name if
appropriate:                                         2.    The relationship
between the Investor of the Securities and the Registered Holder listed in
response to Item 1 above:                                         3.    The
mailing address, telephone and telecopy number and email address of the
Registered Holder listed in response to Item 1 above:   
                                                                               
                                                
                                                                               
4.    The Tax Identification Number of the Registered Holder listed in response
to Item 1 above:                                        

 

3

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A. FOR EXECUTION BY AN INDIVIDUAL:

 

                               By  

 

  Date      

  Print Name:  

 

 

 

B. FOR EXECUTION BY AN ENTITY:

 

  Entity Name:  

 

                                         By  

 

  Date      

  Print Name:  

 

    Title:  

 

 

 

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

 

  Entity Name:  

 

                                         By  

 

  Date      

  Print Name:  

 

    Title:  

 

 

 

  Entity Name:  

 

                                         By  

 

  Date      

  Print Name:  

 

    Title:  

 

 

 

4