Exhibit 10.1

ASSISTANCE AGREEMENT BY AND BETWEEN
THE STATE OF CONNECTICUT

﻿

ACTING BY THE DEPARTMENT OF ECONOMIC AND COMMUNITY DEVELOPMENT

(An Equal Opportunity Employer)

AND

VERMILLION, INC.

 

RE: Vermillion Relocation Project  

This ASSISTANCE AGREEMENT (the “Agreement”) is made and entered into by and
between the STATE OF CONNECTICUT, (hereinafter the “State”), acting herein by
Catherine Smith, its Commissioner of Economic and Community Development,
(hereinafter the “Commissioner”), pursuant to Chapter 588l of the Connecticut
General Statutes and VERMILLION, INC. (hereinafter the “Applicant” or
“contractor”) acting herein by Valerie P. Palmieri, its duly authorized
President and CEO.

WITNESSETH:

WHEREAS, the governing body of the Applicant has submitted to the State a series
of documents including an acceptance letter in response to a Letter of Intent
submitted to it by the Commissioner dated August 4, 2015 as amended by letter
March 2, 2016 (the “Commissioner’s LOI”), an Application for Financial
Assistance, a resolution from the Applicant’s appropriate organizational body
authorizing the Applicant to submit said Application, a Project Financing Plan
and Budget, and exhibits, if any, and has caused to have submitted an Opinion of
Counsel and other documents (all, together with all other documents and
agreements executed by the Applicant in connection with this Agreement,
hereinafter the “Project Documents”) for a project entitled Vermillion
Relocation Project (hereinafter the “Project”) and has represented to the State
that it can rely upon the information within the Project Documents as being
accurate and complete;

WHEREAS, in reliance upon the information submitted by or caused to be submitted
by the Applicant, the State has approved funding for the Project; and

WHEREAS, the State and the Applicant desire to define the terms and conditions
upon which such financial assistance will be made available to the Applicant.

NOW THEREFORE, in consideration of the mutual promises of the parties hereto,
and of the mutual benefits to be gained by the performance thereof, the State
and the Applicant hereby agree as follows:

ARTICLE 1 - STATE OBLIGATIONS

1.1Financial Assistance.  The State hereby agrees, subject to the terms of this
Agreement and its Exhibits and in reliance upon the facts and representations
set forth in the Project Documents, to provide financial assistance to the
Applicant for the Project in the form of

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

 

a loan in an amount not to exceed FOUR MILLION AND NO /100 DOLLARS
($4,000,000.00) (the “Loan”), which Loan shall be evidenced by a promissory note
(hereinafter the “Funding”); provided, however, that the aggregate principal of
the Funding shall not exceed  fifty percent (50%) of the cost of the Project.
The Applicant acknowledges that $2,000,000.00 of the Loan has been approved by
the State of Connecticut Bond Commission (the “Commission”) but the additional
$2,000,000.00 is subject to the approval of Commission which has not yet
approved said additional $2,000,000.00 as of the date hereof.  Therefore, the
State’s obligation to fund $2,000,000.00 of the Loan amount is specifically
conditioned upon such approval by the Commission.

1.2 Disbursement of the Loan:

 A. The first $2,000,000.00 of the Loan shall be disbursed (i) upon the closing
of this financial assistance; (ii) whenever the Applicants shall have
established its operations in and taken occupancy of its Trumbull, Connecticut
location at 35 Nutmeg Drive; and (iii) upon the Applicant providing evidence on
its balance sheet showing at least $18,000,000.00 of additional capital
investment.

B.    Thereafter, $1,000,000.00 of the Loan shall be disbursed (i) after
Commission approval per Section 1.1 above, (ii) after the Applicant shall have
received approval from the Food and Drug Administration (FDA) for OVA 2 and
(iii) upon verification by the State of the creation of 40 full time jobs prior
to the Target date referred to in Section 2.17 infra.

C.   The last remaining $1,000,000.00 balance of the Loan shall be disbursed
after subsection B above is satisfied and the Applicant shall have achieved
gross consolidated revenue of $5,000,000.00 for any trailing twelve (12) month
period as reported in Applicants SEC filings.     

         1.3     Repayment of Loan.  The Loan shall be repayable by the
Applicant in accordance with the terms of the promissory note evidencing the
Loan (the “Note”).

ARTICLE 2 - APPLICANT WARRANTIES, COVENANTS, AND OBLIGATIONS

The Applicant represents, warrants and covenants as follows, and further
covenants that on and after the closing and for so long as this Agreement or any
clause thereof shall remain in effect:

2.1Form of Entity.  The Applicant is a Delaware corporation duly created and
validly existing, or properly registered to do business, under the laws of the
State of Delaware and State of Connecticut and each other jurisdiction where the
ownership of its property or the conduct of its business requires
qualification.  Further, that the Applicant will preserve and maintain its
existence as a corporation duly organized validly existing, and in good standing
under the laws of Texas, and will remain (or become) qualified to do business
and in good standing in the State of Connecticut and in each other jurisdiction
where the nature of its business or the ownership of its property makes such
qualification necessary.

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

 

2.2Ability to Conduct Business.  The Applicant has all franchises, permits,
licenses, and other similar authorizations necessary for the conduct of its
business as now being conducted by it, and it is not aware of any state of facts
that would make it impossible or impractical to obtain any similar authorization
necessary for the conduct of its business as planned to be conducted.  The
Applicant is not in violation, nor will the transactions contemplated by the
Agreement or the Project Documents to which it is a party, cause a violation of
the terms or provisions of any such franchise, permit, license, or similar
authorization.

2.3Authorization to Enter Into and Execute Project Documents.  The execution and
delivery of the Project Documents and this Assistance Agreement by the
Applicant, and the performance of its obligations thereunder, are within its
power, have been duly authorized by all necessary action on its part, and are
not in contravention of law nor in contravention of its organizational documents
or governing bylaws or of the provisions of any indenture, agreement, or
undertaking to which it, its principals or employees are parties or by which
they are bound.

2.4Other Authorization Unnecessary.  No consent, license, or approval from any
governmental authority is or will be necessary for the valid execution and
delivery by the Applicant of the Project Documents.  The Applicant agrees that
nothing in the Agreement relieves it from any obligation under law to obtain any
such license, consent, or approval.

2.5Agreement to Undertake Project.  The Applicant agrees to undertake and
complete the Project as described in the Commissioner’s LOI.

2.6Obstacles to Entering and Executing Project.

(A)Existing Suit or Other Actions.  There is no action, suit, proceeding or
investigation at law, in equity, or before any court, public board, arbitrator,
or body, pending or, to the Applicant’s knowledge, threatened against or
affecting it, which could or might adversely affect the Project, the State’s
security as described in section 2.16 below, any of the transactions
contemplated by the Project Documents or the validity of the Project Documents,
or the Applicant’s ability to discharge its obligations under the Project
Documents.

(B)Default of Existing Orders or Instruments.  The Applicant is not in default
beyond any applicable notice and grace periods with respect to any order of any
court, arbitrator, or governmental body which could or might adversely affect
the Project, the State’s security as described in section 2.16 below, or any of
the transactions contemplated by the Project Documents or the validity of the
Project Documents, or the Applicant’s ability to discharge its obligations under
the Project Documents.  In addition, the Applicant is not in default beyond any
applicable grace periods in the performance, observance or fulfillment of any of
the terms, obligations, covenants, conditions, or provisions contained in any
agreement or instrument to which the Applicant is a party or to which its
property is subject, which default, together with all such defaults, singularly
or in the aggregate, may have a materially adverse effect on the business,
assets, liabilities, financial condition, results of operations or business
prospects of the Applicant.

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

 

(C)Instance of Default.  No Instance of Default (as defined in section 4.1
hereof) has occurred or is continuing, and the Applicant has no knowledge of any
currently existing facts or circumstances which, with the passage of time or the
giving of notice, or both, would constitute an Instance of Default.

2.7Material Adverse Change. 

(A)Financial Condition.  There has been no material adverse change in the
financial condition of the Applicant or any Guarantor of this Agreement, if
applicable, since the date of application for the Funding that has not been
previously disclosed in writing to the Commissioner.

(B)Representations in Documents.  All financial statements, including, without
limitation, balance sheets and profit and loss statements, delivered to the
Commissioner are correct and complete, and fairly present the financial position
and results of operations of the Applicant at the times of and for the periods
reflected by such financial statements.  The financial statements and all other
written statements furnished by the Applicant in connection with the Funding do
not contain any untrue statement of material fact and do not omit any material
fact whose omission would make the statements contained therein or herein
misleading.

(C)Other Facts.  There is no fact which the Applicant has not disclosed to the
Commissioner in writing, which writing, if any, is attached hereto as Exhibit A,
which materially and adversely affects or, as far as the Applicant can
reasonably foresee, is reasonably likely to prove to affect materially and
adversely the business, operations, properties, prospects, profits, or condition
of the Applicant.  Further, the Applicant will notify the Commissioner, in
writing, promptly of any material adverse change in the financial condition or
business prospects of the Applicant or any Guarantor of this Agreement.

2.8Use of State Funding.  The Funding shall be used for the Project as set forth
in the Commissioner’s LOI and in accordance with the most recently approved
Project Financing Plan and Budget.  The Funding shall be used for that purpose
and for no other purpose.

(A)Additional Costs above Funding.  Any amount in excess of the amount of the
Funding that may be necessary to cover the cost of the Project as set forth in
the most recently approved Project Financing Plan and Budget shall be the
responsibility of the Applicant and shall not be covered by the Funding.  The
Applicant shall, as a minimum, provide the level and sources of funding as
indicated in the Project Documents, and shall expend those funds in accordance
with the Project Financing Plan and Budget.

(B)Budget. The Project Financing Plan and Budget most recently approved by the
Commissioner shall constitute the budget for the Project.  The Project Financing
Plan and Budget may be amended by request of the Applicant if such request is
approved in writing by the Commissioner.  Approval by the Commissioner of any
revised Project Financing Plan and Budget shall not constitute or imply a
revision of the amount of the Funding.

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

 

2.9Payment of Other Obligations.  The Applicant will pay and discharge promptly
when due and payable all taxes, assessments and governmental charges levied or
imposed upon it, its property, or any part thereof, or upon its income or
profits, or any part thereof, as well as all lawful claims for labor, materials
and supplies, which, if unpaid, might by law become a lien or charge upon its
property, provided that such charges need not be paid while being contested by
the Applicant in good faith and by appropriate legal proceedings so long as
adequate book reserves have been established with respect thereto and the
Applicant’s title to, and its right to use, its property is not materially and
adversely affected thereby.  The Applicant also agrees to pay all taxes or
duties levied or assessed upon said sum against the State, the obligation
evidenced hereby or the collateral securing the same and to pay all costs,
expenses, and attorneys’ reasonable fees incurred by the State in any proceeding
for the collection of the obligations evidenced hereby or in any action to
enforce the State’s rights in property granted under the Security Agreement upon
the happening of an Instance of Default as provided for in the Project Documents
or in protecting or sustaining the lien granted in connection with this
Agreement or in the Security Agreement or in any litigation or controversy
arising from or connected with the Project Documents.

2.10Compliance with Laws, Regulations, Rules, and Executive Orders.  In the
administration and execution of the Project, the Applicant shall comply with all
pertinent provisions of local, State and Federal law applicable to it and/or its
properties and/or its business, and maintain its property in good
repair.  Failure to do so shall constitute an Instance of Default by the
Applicant under this Agreement. The Applicant agrees to provide each labor union
or representative of workers with which such Applicant has a collective
bargaining agreement or other contract or understanding and each vendor with
which such Applicant has a contract or understanding, a notice to be provided by
the Commission on Human Rights and Opportunities advising the labor union or
workers’ representative of the Applicant’s commitments under this section, and
to post copies of such notice in conspicuous places available to be seen by
employees and applicants for employment.

Specifically, but not by way of limitation, the Applicant agrees to the
following:

(A)For the purposes of subsection (B) of this section 2.10, the following terms
are defined as follows:

1.“Commission” means the Commission on Human Rights and Opportunities;

2.“Contract” and “contract” means the Agreement and any extension or
modification of the Agreement;

3.“Contractor” and “contractor” include any successors or assigns of the
Contractor or contractor;

4.“Gender identity or expression” means a person’s gender-related identity,
appearance or behavior, whether or not that gender-related identity, appearance
or behavior is different from that traditionally associated with the person’s
physiology or assigned sex at birth, which gender-related identity can be shown
by providing evidence

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

 

including, but not limited to, medical history, care or treatment of the
gender-related identity, consistent and uniform assertion of the gender-related
identity or any other evidence that the gender-related identity is sincerely
held, part of a person’s core identity or not being asserted for an improper
purpose.

5.“Good faith” means that degree of diligence which a reasonable person would
exercise in the performance of legal duties and obligations;

6.“Good faith efforts” shall include, but not be limited to, those reasonable
initial efforts necessary to comply with statutory or regulatory requirements
and additional or substituted efforts when it is determined that such initial
efforts will not be sufficient to comply with such requirements;

7.“Intellectual disability” means a significant limitation in intellectual
functioning and deficits in adaptive behavior that originated during the
developmental period before eighteen years of age;

8.“Marital status” means being single, married as recognized by the State of
Connecticut, widowed, separated or divorced;

9.“Mental disability” means one or more mental disorders, as defined in the most
recent edition of the American Psychiatric Association’s “Diagnostic and
Statistical Manual of Mental Disorders”, or a record of or regarding a person as
having one or more such disorders;

10.“Minority business enterprise” means any small contractor or supplier of
materials fifty-one percent or more of the capital stock, if any, or assets of
which is owned by a person or persons:  (1) who are active in the daily affairs
of the enterprise, (2) who have the power to direct the management and policies
of the enterprise, and (3) who are members of a minority, as such term is
defined in subsection (a) of Connecticut General Statutes § 32-9n; and

11.“Public works contract” means any agreement between any individual, firm or
corporation and the State or any political subdivision of the State other than a
municipality for construction, rehabilitation, conversion, extension, demolition
or repair of a public building, highway or other changes or improvements in real
property, or which is financed in whole or in part by the State, including, but
not limited to, matching expenditures, grants, loans, insurance or guarantees.

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

 

For purposes of subsection (B) of this section 2.10, the terms “Contract” and
“contract” do not include a contract where each contractor is (a) a political
subdivision of the state, including, but not limited to, a municipality, (b) a
quasi-public agency, as defined in Conn. Gen. Stat. Section 1-120, (c) any other
state, including but not limited to any federally recognized Indian tribal
governments, as defined in Conn. Gen. Stat. Section 1-267, (d) the federal
government, (e) a foreign government, or (f) an agency of a subdivision, agency,
state or government described in the immediately preceding items (a), (b), (c),
(d) or (e).

(B)(1)  (a)The contractor agrees and warrants that in the performance of the
Contract such contractor will not discriminate or permit discrimination against
any person or group of persons on the grounds of race, color, religious creed,
age, marital status, national origin, ancestry, sex, gender identity or
expression, intellectual disability, mental disability or physical disability,
including, but not limited to, blindness, unless it is shown by such contractor
that such disability prevents performance of the work involved, in any manner
prohibited by the laws of the United States or of the State of Connecticut; and
the contractor further agrees to take affirmative action to insure that
applicants with job-related qualifications are employed and that employees are
treated when employed without regard to their race, color, religious creed, age,
marital status, national origin, ancestry, sex, gender identity or expression,
intellectual disability, mental disability or physical disability, including,
but not limited to, blindness, unless it is shown by the contractor that such
disability prevents performance of the work involved; (b) the contractor agrees,
in all solicitations or advertisements for employees placed by or on behalf of
the contractor, to state that it is an “affirmative action‑equal opportunity
employer” in accordance with regulations adopted by the Commission; (c) the
contractor agrees to provide each labor union or representative of workers with
which the contractor has a collective bargaining Agreement or other contract or
understanding and each vendor with which the contractor has a contract or
understanding, a notice to be provided by the Commission, advising the labor
union or workers’ representative of the contractor’s commitments under this
section and to post copies of the notice in conspicuous places available to
employees and applicants for employment; (d) the contractor agrees to comply
with each provision of this Section and Connecticut General Statutes §§ 46a-68e
and 46a-68f and with each regulation or relevant order issued by said Commission
pursuant to Connecticut General Statutes §§ 46a-56, 46a-68e and 46a-68f; and
(e) the contractor agrees to provide the Commission on Human Rights and
Opportunities with such information requested by the Commission, and permit
access to pertinent books, records and accounts, concerning the employment
practices and procedures of the contractor as relate to the provisions of this
Section and Connecticut General Statutes § 46a-56.  If the contract is a public
works contract, the contractor agrees and warrants that he will make good faith
efforts to employ minority business enterprises as subcontractors and suppliers
of materials on such public works projects.

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

 

(2)Determination of the contractor’s good faith efforts shall include, but shall
not be limited to, the following factors:  The contractor’s employment and
subcontracting policies, patterns and practices; affirmative advertising,
recruitment and training; technical assistance activities and such other
reasonable activities or efforts as the Commission may prescribe that are
designed to ensure the participation of minority business enterprises in public
works projects.

(3)The contractor shall develop and maintain adequate documentation, in a manner
prescribed by the Commission, of its good faith efforts.

(4)The contractor shall include the provisions of subsection (1) of this section
2.10(B) in every subcontract or purchase order entered into in order to fulfill
any obligation of a contract with the State and such provisions shall be binding
on a subcontractor, vendor or manufacturer unless exempted by regulations or
orders of the Commission.  The contractor shall take such action with respect to
any such subcontract or purchase order as the Commission may direct as a means
of enforcing such provisions including sanctions for noncompliance in accordance
with Connecticut General Statutes §46a-56; provided if such contractor becomes
involved in, or is threatened with, litigation with a subcontractor or vendor as
a result of such direction by the Commission, the contractor may request the
State of Connecticut to enter into any such litigation or negotiation prior
thereto to protect the interests of the State and the State may so enter.

(5)The contractor agrees to comply with the regulations referred to in this
Section as they exist on the date of this Contract and as they may be adopted or
amended from time to time during the term of this Contract and any amendments
thereto.

(6)(a) The contractor agrees and warrants that in the performance of the
Contract such contractor will not discriminate or permit discrimination against
any person or group of persons on the grounds of sexual orientation, in any
manner prohibited by the laws of the United States or the State of Connecticut,
and that employees are treated when employed without regard to their sexual
orientation; (b) the contractor agrees to provide each labor union or
representative of workers with which such contractor has a collective bargaining
Agreement or other contract or understanding and each vendor with which such
contractor has a contract or understanding, a notice to be provided by the
Commission advising the labor union or workers’ representative of the
contractor’s commitments under this section, and to post copies of the notice in
conspicuous places available to employees and applicants for employment; (c) the
contractor agrees to comply with each provision of this section and with each
regulation or relevant order issued by said Commission pursuant to Connecticut
General Statutes § 46a-56; and (d) the contractor agrees to

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

 

provide the Commission with such information requested by the Commission, and
permit access to pertinent books, records and accounts, concerning the
employment practices and procedures of the contractor which relate to the
provisions of this Section and Connecticut General Statutes § 46a-56.

(7)The contractor shall include the provisions of the foregoing subsection (6)
of this section 2.10(B) in every subcontract or purchase order entered into in
order to fulfill any obligation of a contract with the State and such provisions
shall be binding on a subcontractor, vendor or manufacturer unless exempted by
regulations or orders of the Commission.  The contractor shall take such action
with respect to any such subcontract or purchase order as the Commission may
direct as a means of enforcing such provisions including sanctions for
noncompliance in accordance with Connecticut General Statutes § 46a-56;
provided, if such contractor becomes involved in, or is threatened with,
litigation with a subcontractor or vendor as a result of such direction by the
Commission, the contractor may request the State of Connecticut to enter into
any such litigation or negotiation prior thereto to protect the interests of the
State and the State may so enter.

(C)Executive Order No. Three.  This Agreement is subject to the provisions of
Executive Order No. Three of Governor Thomas J. Meskill promulgated June 16,
1971 and, as such, this Agreement may be cancelled, terminated or suspended by
the State Labor Commissioner for violation or of noncompliance with said
Executive Order No. Three, or any State or Federal Law concerning
nondiscrimination, notwithstanding that the Labor Commissioner is not a party to
this Agreement.  The parties to this Agreement, as part of the consideration
hereof, agree that said Executive Order No. Three is incorporated herein by
reference and made a part hereof.  The parties agree to abide by said Executive
Order and agree that the State Labor Commissioner shall have continuing
jurisdiction in respect to Agreement performance in regard to nondiscrimination,
until the Agreement is completed or terminated prior to completion.  The
Applicant agrees as part consideration hereof, that this contract is subject to
the guidelines and rules issued by the State Labor Commissioner to implement
Executive Order No. Three and that it will not discriminate in its employment
practices or policies, will file all reports as required, and will fully
cooperate with the State and the State Labor Commissioner.

(D)Executive Order No. Sixteen.  This Agreement is subject to, and Applicant
hereby agrees to abide by Executive Order No. Sixteen of Governor John G.
Rowland promulgated August 4, 1999, and, as such, the Agreement may be
cancelled, terminated or suspended by the State for violation or noncompliance
with said Executive Order No. Sixteen.

(E)Executive Order No. Seventeen.   This Agreement is subject to the provisions
of Executive Order No. Seventeen of Governor Thomas J. Meskill promulgated
February 15, 1973, and, as such, this Agreement may be cancelled, terminated or
suspended by the Commissioner or the State Labor Commissioner for violation of
or noncompliance with said Executive Order No. Seventeen, notwithstanding that
the Labor Commissioner may not be a party to this Agreement.  The parties to
this Agreement, as part of the consideration hereof, agree

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

 

that the Executive Order No. Seventeen is incorporated herein by reference and
made a part hereof.  The parties agree to abide by said Executive Order and
agree that the contracting agency and the State Labor Commissioner shall have
joint and several continuing jurisdiction in respect to Agreement performance in
regard to listing all employment openings with the Connecticut Employment
Service.

(F)Environmental Laws.  The Applicant hereby agrees to indemnify and hold
harmless the State from and against any liabilities, losses, damages, costs, or
expenses, including attorney’s fees, arising out of or in connection with the
presence of hazardous waste on or in any of the Collateral, as more fully
described in section 2.16 below, or any lien or claim under Conn. Gen. Stat.
section 22a-452a, as amended, or other federal, state, or municipal statute,
regulation, rule, law, or proceeding relating to environmental matters, which
indemnity shall survive, realization on any of the Collateral, as more fully
described in section 2.16 below, payment in full of the Funding, and termination
and/or release of the Project Documents.

(G)Relocation.  The Applicant shall not relocate any material portion of its
Trumbull, CT operations to a location outside of the State prior to the date
that is ten (10) years after the Agreement Date or during the term of the Loan,
whichever is longer (the “Non-Relocation Period”).  If the Applicant relocates
any of such operations within the State during such period, it shall offer
employment at the new location to its employees from the original location if
such employment is available.  The Applicant shall provide written notification
to the Commissioner of any proposed relocation prior to any public announcement.

                        If the Applicant, or its successors or assigns,
relocates any of their applicable operations outside of Connecticut during the
non-relocation period, the full amount of the financial assistance received,
including any forgiveness provided, from the State, shall become immediately due
and payable, plus a one-time penalty charge of 5.0% on the original amount of
the financial assistance provided.

﻿

The applicant shall provide written notification to the Commissioner of DECD of
its proposed relocation prior to any public announcement.

﻿

(H)Taxes.  The Applicant has filed all federal, state, and municipal income and
other tax returns which are required to be filed, and has paid, or made
provision for the payment of, all taxes which have become due pursuant to said
returns, except such taxes, if any, which are being contested in good faith and
as to which adequate reserves have been provided.

(I)Campaign Contribution and Solicitation Prohibitions.  For all State contracts
as defined in C.G.S. sec. 9-612 having a value in a calendar year of $50,000 or
more or a combination or series of such agreements or contracts having a value
of $100,000 or more, the authorized signatory to this Agreement expressly
acknowledges receipt of the State Elections Enforcement Commission’s notice
advising state contractors of state campaign contribution and solicitation
prohibitions, and will inform its principals of the contents of the notice. This
notice is attached hereto as Exhibit C.

(J)General Indemnification.  In addition to the specific covenants in
subsection (F) of this section  2.10 above, the Applicant shall and hereby
agrees to indemnify, defend, and hold the State, and its agents, officials, and
employees, harmless from and against

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

 

any and all suits, damages, claims, causes of actions, demands, judgments,
penalties, costs, expenses, attorneys’ fees, and any and all injuries to persons
or property and all other matters arising out of or incurred in connection with
the performance by Applicant of the terms, conditions, and covenants of this
Agreement or in connection with the operation of the Project.

2.11Other Debt.  The Applicant will not, either directly or indirectly, except
in the course of its ordinary business and in a manner which will not have a
materially adverse impact on the Applicant’s ability to perform its obligations
pursuant to the Agreement and the Project Documents, guarantee, endorse, become
surety for, or otherwise be or become responsible for the obligations of any
other person, whether by agreement to purchase the indebtedness of any other
person, or agreement for the furnishing of funds to any other person, directly
or indirectly, through the purchase of goods, supplies, (or by way of stock
purchase, capital contribution, advance or loan) or for the purpose of paying or
discharging the indebtedness of any other person or otherwise, except for the
endorsement by the Applicant of negotiable instruments for collection in the
ordinary course of business without the written consent of the Commissioner.

2.12Conflict of Interest. The Applicant will adopt and enforce measures
appropriate to assure that no member of the Applicant’s governing bodies and
none of its officers or employees shall have or acquire voluntarily an interest
in any agreement or proposed agreement in connection with the undertaking or
carrying out of the Project.

2.13Notification of Instance of Default by Applicant.  The Applicant shall
notify the Commissioner promptly of the occurrence of any material default
hereunder or under any of the other Project Documents, or any other document,
instrument or agreement to which the Applicant or its properties are subject and
of the actions it intends to take in order to cure such default in a timely
manner.

2.14Business Continuation and Transfer of Control. (A) Except in connection with
a Capital Event as set forth below, the Applicant shall not, either voluntarily
or involuntarily, discontinue its business, be dissolved or otherwise suffer or
permit any termination of its status as a business entity as described in
Section 2.1 above, without the prior written consent of the Commissioner.  No
prior permission shall be required, however, in connection with a Capital Event
as set forth below.  No prior permission shall be required in connection with
the transfer, sale or assignment of all or a material portion of its properties
or assets to, or any merger or consolidation with, another entity (such
transfer, sale, assignment, merger or consolidation shall be referred to herein
as a “Transfer”) in the normal course of Applicant conducting its business,
which is not likely to have a material adverse impact upon Applicant’s financial
condition or its ability to perform under this Agreement, including, without
limitation, maintaining the required employment levels.  In such case, Applicant
will provide the State with notice of any such Transfer, and even if such
Transfer results in the assumption by the successor in interest entity of all
liabilities and obligations hereunder and under the other Project Documents as a
matter of law, the State shall have the right to require said successor entity
to enter into assumption documents in form and substance satisfactory to the
State.

﻿

(B)  The Applicant shall provide the State with notice of any sale, merger or
consolidation with another entity (each a “Capital Event”).  If a Capital Event
occurs, the Applicant shall provide the State with notice as to whether the
successor in interest to the Applicant shall succeed to all of the rights and
obligations of the Applicant provided for in this

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

 

Agreement and the other Project Documents.  If the successor entity does not
assume all liabilities and obligations under this Agreement and the other
Project Documents, then the State shall have the right to deem the Capital Event
to be a relocation of the Applicant to a location outside of Connecticut on the
date of such Capital Event and therefore subject to the default remedies
contained in this Agreement.  Even if the Capital Event results in the
assumption by the successor in interest entity of all liabilities and
obligations hereunder and under the other Project Documents as a matter of law,
the State shall have the right to require said successor entity to enter into
assumption documents in form and substance satisfactory to the State.

﻿

2.15Representations in Other Documents.  All statements contained in any
certificate, financial statement, legal opinion or other instrument delivered by
or on behalf of the Applicant or any Guarantor pursuant to or in connection with
this Agreement shall constitute representations and warranties made under this
Agreement.  All representations and warranties made under this Agreement shall
be made at and as of the date of this Agreement, and at and as of the date of
receipt of the Funding.  All representations and warranties made under this
Agreement shall survive the execution and delivery hereof and shall not be
deemed to have been waived by any investigation made or not made by the
State.  The Project Documents to which the Applicant is a party, when delivered,
will be legal, valid, and binding obligations of the Applicant, enforceable
against it in accordance with their respective terms.

﻿

2.16 Security.   The  Applicant shall provide to the State as security for the
Applicant’s obligations of repayment in respect of the Funding a first priority
blanket lien on all of the Applicant’s existing  Intellectual Property (as filed
in the U S Patent office) and a first priority lien on all machinery and
equipment purchased with the proceeds of the Funding having a value of at least
$700,000.00 and to be located in the Applicant’s Trumbull business premises,
pursuant to a security agreement executed of even date herewith (the “Security
Agreement”), (hereinafter the “Collateral”) .  The State agrees to subordinate
its first priority lien on the Intellectual Property to the lien of an
Institutional Lender (as hereinafter defined) of the Applicant after the
closing.   An Institutional lender shall mean any lender who does not have an
equity interest in the Applicant and/or who is not acquiring an equity interest
in the Applicant from a loan transaction to the Applicant. Upon the fulfillment
of all obligations contained herein or in any of the Project Documents or upon
the termination of the time period as required pursuant to section 2.10(G)
whichever occurs last, and provided that no default has occurred or is
continuing under the terms of this Agreement, any and all security interests
provided to the State with respect to the Funding will be released.

2.17Job Creation and Retention; Job Audit; Penalty; Forgiveness Credit.  

        (A)   The Applicant will create and retain forty (40) full-time
employment positions with an average annual salary of $85,000.00 in Connecticut
on or before March 1, 2018 (the “Target Date”, and shall maintain such positions
for twenty-four (24) consecutive months (the “Employment Obligation”).  A
full-time employment position is defined as a position that is paid for a
minimum of forty (40) hours per week.  The twenty-four (24) consecutive month
period ending on or before the Target Date that yields the highest annual
average positions will be used to determine compliance with the Employment
Obligation, provided that no portion of said twenty-four (24) consecutive months
may begin before the Agreement Date.

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

 

(B)No later than sixty (60) days following the twenty-four-month period
referenced in subsection (A) above, the Applicant shall furnish to the
Commissioner a job audit, performed by a certified public accountant (“CPA”) in
accordance with the DECD Audit Guide located at
http://www.ct.gov/ecd/cwp/view.asp?a=1096&q=249676 (the “Job Audit”).  If the
Applicant has met its Employment Obligation earlier than required, it may make a
written request for the Commissioner’s consent to have its Job Audit performed
as of such earlier date, which consent shall not be unreasonably withheld.  In
such event, the Commissioner shall determine the due date of the Job Audit
referred to herein. The Applicant’s employment numbers that are prior to the
application date for the Loan shall not be considered as part of the Job Audit.

(C)     If, as a result of the Job Audit, the Commissioner determines that the
Applicant has failed to meet its Employment Obligation, the Applicant shall
immediately repay a penalty of $100,000.00 per each full-time employment
position below the Employment Obligation, if the total amount of the Funding is
$4,000,000.00; $75,000.000 if the total amount of the Funding advanced is
$3,000,000.00; and $50,000.00 if the total amount of the Funding advanced is
$2,000,000.00.  The amount repaid will be applied first to any outstanding fees,
penalties or interest due, and then against the outstanding balance of the
Funding. The Commissioner’s determination that a job penalty shall be imposed
and the amount of the penalty shall be final.

﻿

(D)The Applicant may be eligible for a credit to be applied against the
outstanding principal balance of the Loan (the “Forgiveness Credit”) in
accordance with the following:

(i)   If as a result of a Job Audit, the Commissioner determines that the
Applicant has met its Employment Obligation and that the employment positions
created and retained are at an average annual salary of not less than
$80,750.00  (the “Threshold Salary”) (i.e. 95% or more of the “Baseline Salary”
of Eighty Five Thousand and 00/100 Dollars ($85,000.00)) the Applicant may
receive a credit in the amount of Two Million and 00/100 Dollars ($2,000,000.00)
which will be applied against the then outstanding principal balance of the
Loan.  Upon application of the Forgiveness Credit, the Commissioner shall
recalculate the monthly payments of principal and interest under the Note such
that such monthly payments shall amortize the then remaining principal balance
over the remaining term of the Note.

(ii)  Notwithstanding the foregoing, if, as a result of the Job Audit conducted
in accordance with this Section 2.17, the Commissioner determines that the
Applicant has met its Employment Obligation but that the average annual salary
of full-time employees created and retained is less than $80,750.00, any
Forgiveness Credit for which the Applicant would otherwise be eligible to
receive pursuant to Section 2.17(D)(i) above shall be reduced by a number equal
to the result of the following formula: (the difference between the Baseline
Salary and the actual average annual salary of new full-time employees) divided
by the Baseline Salary, and multiplied by the Forgiveness Credit the Applicant
is otherwise eligible to receive.  For Example, if the Applicant met its
Employment Obligation of 40 jobs created and retained for a period of
twenty-four (24) consecutive months and, based on the Job Audit, it is
determined that the Company had an actual annual salary of $75,000.00 per
eligible employee, then the following would be the calculation for the reduction
in the Forgiveness Credit:  ($85,000.00-

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

 

$75,000.00)/$85,000.00 multiplied by $2,000,000.00 = $235,294.00. Therefore, the
actual adjusted Forgiveness Credit would be $1,764,706 (i.e. $2,000,000.00 less
$235,294.00).

﻿

ARTICLE 3 - PROJECT ADMINISTRATION

3.1 Records.

(A)Generally.  The Applicant shall maintain records in a complete, businesslike
manner, including full, accurate and current minutes and records of the Project
in a form satisfactory to the Commissioner.  The Applicant will furnish to the
Commissioner or his designee, at such times as the Commissioner shall determine,
any document, data, and information relating to the Project in possession of the
Applicant which is requested by the Commissioner.  The Commissioner, or his
designee, shall, for the purpose of determining the proper disposition of the
Funding, have the right at any time during normal business hours to inspect the
minutes, records, books, files, documents, payrolls, employment contracts and
conditions, contracts, and any other papers or electronic records of the
Applicant, or to make inspection of any physical location of the Applicant.  The
Applicant shall aid and cooperate with any such inspection.

(B)Connecticut Department of Labor (“DOL”) Employment Data.  The Applicant
agrees that the State, acting through the Department of Economic and Community
Development (“DECD”) may obtain directly from the DOL and disclose, as part of
its reporting requirements to the Connecticut State Legislature and Auditors of
Public Accounts, information pertaining to Applicant’s employment levels.  The
Applicant shall execute such consents as the Commissioner and/or DOL may require
authorizing the Commissioner to obtain the Applicant’s employment records
directly from DOL.  The Applicant acknowledges and agrees that the information
so obtained and disclosed may include employer name, address, and number of
employees, by facility location, for the purpose of fulfilling DECD’s reporting
requirements in accordance with section 32-1m of the Connecticut General
Statutes, as may be amended or modified.  Further, the Applicant agrees that
this employment information may be utilized for purposes of performing
employment audits and research-related activities conducted by DECD.

The Applicant also agrees that it will complete any form provided by DECD that
is needed to assist in the completion of DECD’s annual consolidated report to
the General Assembly as required under section 32-1m of the Connecticut General
Statutes, as maybe amended or modified, if applicable.

﻿

3.2Payment to Applicant.  In order to permit the State to make payment to the
Applicant with respect of the Funding, the Applicant agrees as follows:

(A)Office of the State Comptroller Electronic Fund Transfer Automated Clearing
House (“ACH”)(EFT) Program.  Upon the execution of this Agreement, the Applicant
shall provide current, verifiable bank account information for accounts with
Applicant’s bank to the Office of the State Comptroller (“OSC”) by submitting a
completed Electronic Funds Transfer ACH (EFT) Election Form, available at
http://www.osc.ct.gov/apd/eftprogram/ index.html, and such additional
information as the OSC may require. 

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

 

(B)Requisition Form.  In order to bring about the transfer of moneys to the
account designated under subsection (A) above (the “Account”), the Applicant
shall requisition funds on forms provided by the Commissioner and in the manner
prescribed by this Agreement.  Payment to the Applicant will be made based upon
said requisition forms.

(C)Pre-agreement Costs.  Unless authorized by the Commissioner in writing, no
costs incurred prior to date of the application for the Funding are eligible for
payment from the Funding.

3.3Insurance.  Applicant shall maintain all required insurance in amounts, form,
substance and quality acceptable to the State, as described more fully in
Exhibit B, attached hereto and made a part hereof.  A certificate evidencing
such insurance shall be delivered to the Commissioner at the time of execution
of this Agreement, and annually thereafter for the duration of the Agreement.

3.4Personal Service Contracts.  All Project cost items of personal service,
except those to be performed by volunteers and those to be performed by
employees of the Applicant who will not receive extra compensation for such
service, shall be performed pursuant to a written contract, and the Applicant
shall, upon request, provide the Commissioner with copies of all such contracts.

3.5Inspections.  The Commissioner shall from time to time, in his discretion,
during regular business hours, have the right of making an inspection of the
Collateral, and the Applicant shall assist the Commissioner in said inspection
and shall make available such books and other records as the Commissioner may
reasonably request.

3.6Audit.  Each Applicant subject to a federal and/or state single audit must
have an audit of its accounts performed annually.  The audit shall be in
accordance with the DECD Audit Guide, located at
http://www.ct.gov/ecd/cwp/view.asp?a=1096&q=249676, and the requirements
established by federal law and state statute. All Applicants not subject to a
federal and/or state single audit shall be subject to a Project-specific audit
of its accounts within ninety (90) days of the completion of the Project or at
such times as required by the Commissioner.  Such audit shall be in accordance
with the DECD Audit Guide.  An independent public accountant as defined by
generally accepted government auditing standards (GAGAS) shall conduct the
audits. At the discretion and with the approval of the Commissioner, examiners
from the Department of Economic and Community Development may conduct
Project-specific audits.

3.7Repayment to State.  (a)  Any unspent Funding shall become immediately due
and payable by the Applicant to the State within ninety (90) days of the end
date of the most recently approved Project Financing Plan and Budget.  (b) In
the event that an audit referred to in section 3.6 above demonstrates that the
actual expenditures made by the Applicant in connection with the Project are
less than the maximum allowable amounts for disbursement by the State, as set
forth in section 1.1 above, any such excess disbursement made by the State in
respect of the Funding shall become immediately due and payable by the Applicant
to the State.

3.8Yearly Reports.  The Applicant shall furnish upon request to the State within
ninety (90) days of the end of each of the Applicant’s fiscal year(s), or
earlier as determined by the Commissioner for each year that this Agreement
remains in effect: (1) its balance sheet and

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

 

the related statement of earnings and retained earnings, including all
supporting schedules and comments, all of which shall be prepared by
a  certified public accountant of recognized standing using, at a minimum, the
standards for a “Review” as that term is used in the reporting standards of the
American Institute of Certified Public Accountants; and (2) such further
financial and other information that the Commissioner may at his discretion
require from time to time.

ARTICLE 4 - DEFAULT

4.1Instances of Default.  The occurrence of any of the following events shall
constitute a default under this Agreement (an “Instance of Default”):

(A)Breach of Agreement.  If the Applicant fails to perform any material act,
duty, obligation or other agreement contained herein or in any other Project
Document or fails to forebear from any unpermitted act, or if the Applicant
abandons or terminates the Project, or takes such steps that such an abandonment
or termination is imminent.

(B)Misrepresentation.  If any representation or warranty made by the Applicant
or caused to be made for the Applicant in any of the Project Documents prove at
any time to be incorrect in any material respect.

(C)Unpaid Judgments.  If a judgment or judgments for the payment of money shall
be rendered against Applicant and any such judgment shall remain unpaid,
unstayed on appeal, unbonded, undischarged or undismissed for a period of ninety
(90) consecutive days.

(D)Receivership or Bankruptcy.  If the Applicant shall: (i) apply for or consent
to the appointment of a receiver, trustee or liquidator of all or a substantial
part of any of its assets; (ii) be unable or admit in writing its inability to
pay its debts as they mature; (iii) file or permit the filing of any petition or
reorganization or the like under any insolvency or bankruptcy law, or the
adjudication of it as a bankrupt, or make an assignment for the benefit of
creditors or consent to any form of arrangement for the satisfaction, settlement
or delay of debt or the appointment of a receiver for all or any part of its
properties; or (iv) any action shall be taken by Applicant for the purpose of
effecting any of the foregoing.

(E)Change in Business Structure.   If the Applicant shall discontinue its
business, dissolve or liquidate, or be dissolved or liquidated, or cease to
legally exist, or merge or consolidate, or be merged or consolidated with or
into any corporation or other business entity without the written consent of the
Commissioner in violation of section 2.14 hereinabove.

(F)Condemnation or Seizure.  If any Federal, state or local governmental
instrumentality, body or agency shall condemn, seize or otherwise appropriate,
or take custody or control of all or any substantial portion of the properties
or assets of Applicant.

(G)Lack of Adequate Security.  If the State, at any time and in good faith,
deems itself to be insecure.  For the purposes of this Agreement, the State
shall be entitled to deem itself insecure when some event occurs, fails to occur
or is threatened or some objective condition exists or is threatened which
materially impairs the prospects of the Applicant’s business, which
significantly impairs the value of the Collateral to the State, or which
materially affects the financial condition or business operations of
Applicant.  Also included is the actual or

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

 

threatened waste, removal, or demolition of, or material alteration to, any
significant part of the Applicant’s property.

(H)Cancellation of Insurance.  Failure of the Applicant to keep in force all
insurance required by this Agreement.

(I)Job Creation.  Failure of the Applicant to meet its Employment Obligation and
to pay the penalties associated therewith as set forth in section 2.17
hereinabove. 

(J)Failure to Pay Debts.  Failure of the Applicant to pay its debts as such
debts become due if such failure could reasonably be anticipated to have a
material adverse effect on the operations of the Applicant or on the Applicant’s
ability to perform its obligations hereunder or under the other Project
Documents.  Failure to pay when due and payable the principal of or interest on
or any other material amount owed with respect to any indebtedness for borrowed
money upon which  the Applicant is obligated to make payment, or the maturity of
any such indebtedness shall have been accelerated in accordance with the
provisions of any agreement or instrument providing for the creation of or
concerning such indebtedness, or any event shall have occurred and be continuing
after any applicable cure period which would permit any holder or holders of
such indebtedness, any trustee or agency acting on behalf of such holder or
holders or any other person so to accelerate such maturity if such failure could
reasonably be anticipated to have a material adverse effect on the operations of
the Applicant or on the Applicant’s ability to perform its obligations hereunder
or under the other Project Documents.

(K)Violation of Terms in Other Project Documents.  The occurrence of a default
or violation under any of the Project Documents. 

4.2Events in Instances of Default.  

(A)Notice of Default. If the Applicant defaults or shall commit or allow any
breach of the Applicant’s covenants, agreements and other obligations under this
Agreement, material or otherwise, including, without limitation, an Instance of
Default hereunder, the Commissioner shall notify the Applicant of the default in
writing (“Notice of Default”).

(B)Opportunity to Cure.  Upon the occurrence of an Instance of Default, the
Commissioner may determine that permitting an opportunity to cure a default
could jeopardize the Project or security, or would not be in the best interests
of the State.  Under those circumstances, no opportunity to cure need be given
and the Commissioner may seek other remedies.  Without in any way limiting the
preceding right to act without providing the opportunity to cure, the
Commissioner may provide the Applicant thirty (30) days after the Notice of
Default, or such longer period of time as the Commissioner may determine and set
forth in writing, to cure or remedy the default or breach.  Said cure or remedy
will not be effective unless accepted, in writing, by the Commissioner.

(C)Remedies.  Upon the occurrence of an Instance of Default and after any
applicable grace period, the State, acting by the Commissioner, shall have, to
the full extent permitted by law, each and all of the following remedies in
addition to those provided for in other portions of this Agreement:

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

 

(1)To suspend all further payments by the State to the Applicant until such
default is cured to the satisfaction of the Commissioner;

(2)To proceed to enforce the performance or observance of any obligations,
agreements, or covenants of the Applicant or any Guarantor in this Agreement or
the Project Documents;

(3)To declare the entire amount of the Funding to be immediately due and payable
and to bring any and all actions at law or in equity as may be necessary to
enforce said obligation of repayment.  In such Instances of Default, the
Applicant hereby agrees to repay immediately the entire unpaid principal amount
of the Loan received  (including any Forgiveness Credit provided hereunder) with
any accrued and unpaid interest, and the entire amount of the Grant and
liquidated damages equal to five percent (5%) of the total amount of the Funding
received. 

(4)The right to a writ of mandamus, injunction or similar relief against the
Applicant or any or all of the members of the Applicant’s governing body, or
against the officers, agents or representatives of the Applicant, as may be
appropriate, because of such default or breach;

(5)The right to maintain any and all actions at law or suits in equity,
including receivership or other proper proceedings, to cure or remedy any
defaults or breaches of covenants under this Agreement;

(6)The State may collect a “late charge” not to exceed an amount equal to five
percent (5%) of any installment of interest or principal or both which is not
paid within fifteen (15) days of the date on which said payment is due.  Late
charges shall be separately charged to and collected from the Applicant and
shall be due upon demand by the State;

(7)The State may collect costs associated with collection efforts as outlined in
section 2.9 of this Agreement.

﻿

ARTICLE 5 - MISCELLANEOUS PROVISIONS

5.1Non-waiver.  If the State does not exercise, or delays in exercising, or
exercises in part any of the State’s rights and remedies set forth in this
Agreement for the curing or remedying of any default or breach of covenant or
condition, or any other right or remedy, in no event shall such non‑exercise,
delay or partial exercise be construed as a waiver of full action by the State
or a waiver of any subsequent default or breach of covenant or
condition.  Nothing in this Agreement may be construed as a waiver or limitation
by the Commissioner of the State’s sovereign immunity.

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

 

5.2Severance.  If any court determines any provision or provisions of this
Agreement to be invalid, the remainder of this Agreement shall not be thereby
affected.

5.3Agreement Date.   This Agreement shall become effective as of the date the
Commissioner or his designee affixes his signature hereto.

5.4Originals.  This Agreement shall be executed in three (3) counterparts, each
of which shall be deemed an original, but which together shall constitute one
and the same instrument.

5.5Multiple Applicants.  If there is more than one Applicant, the obligations
hereunder and under the Project Documents, shall be joint and several.

5.6Notices.  Any notice to the Applicant pursuant hereto or pursuant to any of
the Project Documents may be served in person or by mail.  Any such requirement
shall be deemed met by any written notice personally served at the principal
place of business of the Applicant, or at such other address as the Applicant
shall notify the Commissioner, or mailed by depositing it in any post office
station or letter box enclosed in a postage-paid envelope addressed to the
Applicant at 12117 Bee Caves Road, Building III, Suite 100, Austin, Texas 78738,
or at such other address as provided above.  Any notice to the State,
Department, or Commissioner shall be addressed to the Commissioner at 505 Hudson
Street, Hartford, CT 06106.  Any notice served upon the State, Department, or
Commissioner under this Agreement or any other Project Document shall be
effective only upon receipt by the Commissioner.

5.7Waivers by Applicant.   The Applicant and all others who may become liable
for all or any part of this obligation do hereby waive demand, presentment for
payment, protest, notice of protest and notice of non‑payment of this Agreement
and do hereby consent to any number of renewals or extensions of the time of
payment hereof and agree that any such renewals or extensions may be made
without notice to any of said parties and without affecting their liability
herein and further consent to the release of any part or parts or all of the
security for the payment hereof and to the release of any party or parties
liable hereon, all without affecting the liability of the other persons, firms
or corporations liable for the payment of this Agreement.

5.8Gender, Number and Captions.  The use of a personal pronoun shall refer to
all persons regardless of the proper grammatical term; the singular includes the
plural; and, captions for sections are included only for reference and do not
modify or effect the terms, conditions and provisions of any document, agreement
or instrument.

5.9Modification and Subordination.  This Agreement may not be modified or
amended in any manner except in a written agreement executed by all of the
parties hereto.  The State hereby acknowledges that the Applicant may enter into
l financings in the normal course of its business and in connection with the
same, Applicant may grant a security interest in the Intellectual Property. In
the event that a lender of the Applicant requires a consent or subordination
agreement from the State of its interests in such Intellectual Property, the
State agrees to furnish such consent or subordination agreement in a form
reasonably acceptable to the State. In the event that the Applicant seeks
modification in the form of a consent or a subordination to financing required
by the Applicant in its normal course of business, the

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

 

Applicant shall request such modification in writing to the Commissioner not
less than thirty (30) days prior to the date such modification or subordination
is required.  The Applicant shall promptly reimburse the State for expenses,
including reasonable attorneys’ fees, incurred in negotiating and entering into
such modification.

5.10Provision of Other Documents.  Upon the request of the Commissioner, the
Applicant shall execute and deliver or cause to be executed and delivered such
further documents and instruments and do such further acts and things as the
Commissioner may request in order to effectuate more fully the purposes of this
Project, to secure more fully the payment of the Funding in accordance with its
terms, and to vest more completely in and assure to the Commissioner its rights
under the Project Documents.  Without limiting the generality of the foregoing,
the Applicant will join with the Commissioner in executing such financing
statements, agreements, notices or other documents or instruments as the
Commissioner shall deem necessary or desirable to create, preserve, protect,
maintain or enforce its rights and interests in and its liens on the property of
the Applicant.  The Applicant shall pay the cost of filing and recording, or
refiling and re-recording, such documents and instruments in all public offices
in which such filing or recording, or refiling or re-recording, is deemed by the
Commissioner to be necessary or desirable.

5.11Assignment.  This Agreement and any of the documents related hereto and the
rights, duties, or obligations thereunder may not be assigned by the Applicant
without the written consent of the Commissioner.  Any assignment made without
the written consent of the Commissioner shall be void and of no force or effect.

5.12Survival of Representations, Warranties and Covenants.  For the purposes of
this Agreement, the term “Applicant” shall mean and include any successor or
assigns of Applicant including any representative of Applicant under the
provisions of any state or Federal law governing bankruptcy, insolvency,
receivership or reorganization.  All representations, warranties, and covenants
made by the Applicant in this Agreement or in any of the other Project Documents
or in any certificate or instruments delivered to the State in connection with
the Funding shall be considered to have been relied upon by the Commissioner and
shall survive until the expiration of the term of this Agreement in accordance
with section 5.19(A) hereof.  This Agreement and the other Project Documents
shall be binding upon and inure to the benefit of the successors and assigns of
each of the parties; provided, however, that nothing in this provision shall
imply that the Applicant has the right or authority to assign its rights, duties
or obligations hereunder or under any of the Project Documents without the
written consent of the Commissioner.

5.13Governing Documents.  In the event of any conflict between this Agreement
and any of the Project Documents, this Agreement shall be controlling.

5.14Third Parties.  This Agreement is between the State and the Applicant only
and shall not be relied upon by any third party. 

5.15Governing Laws.  The laws of the State of Connecticut shall govern this
Agreement and the Project Documents.

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

 

5.16Jurisdiction.  The Applicant agrees that the execution of the Agreement and
the other Project Documents, and the performance of its obligations hereunder
and thereunder, shall be deemed to have a Connecticut situs, and the Applicant
shall be subject to the personal jurisdiction of the courts of the State of
Connecticut with respect to any action the Commissioner, his successors or
assigns may commence hereunder or thereunder.  Accordingly, the Applicant hereby
specifically and irrevocably consents to the jurisdiction of the courts of the
State of Connecticut with respect to all matters concerning this Agreement or
any of the other Project Documents or the enforcement thereof in any action
initiated by the Commissioner or which the Commissioner voluntarily joins as a
party.

5.17Commercial Transaction and Waiver.  THE APPLICANT AGREES THAT THE
TRANSACTION OF WHICH THIS AGREEMENT IS A PART IS A COMMERCIAL TRANSACTION AND
WAIVES ANY RIGHT TO NOTICE, PRIOR HEARING, AND ANY OTHER RIGHTS IT MAY HAVE
UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES, AS MAY BE AMENDED, OR
OTHER APPLICABLE LAW WITH RESPECT TO ANY REMEDY WHICH THE STATE MAY DESIRE TO
USE, AND THE COMMISSIONER MAY INVOKE ANY PREJUDGMENT REMEDY AVAILABLE TO HIM,
INCLUDING, BUT NOT LIMITED TO, GARNISHMENT, ATTACHMENT, FOREIGN ATTACHMENT AND
REPLEVIN, WITH RESPECT TO ANY TANGIBLE OR INTANGIBLE PROPERTY (WHETHER REAL OR
PERSONAL) OF THE APPLICANT TO ENFORCE THE PROVISIONS OF THE PROJECT DOCUMENTS,
WITHOUT GIVING THE APPLICANT ANY NOTICE OR OPPORTUNITY FOR A HEARING. 

5.18Jury Trial Waiver.  THE APPLICANT HEREBY WAIVES TRIAL BY JURY IN ANY COURT
IN ANY SUIT, ACTION OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN
ANY WAY RELATED TO THE TRANSACTION OF WHICH THIS AGREEMENT IS A PART AND/OR THE
ENFORCEMENT OF ANY OF ITS RIGHTS AND REMEDIES.  THE APPLICANT ACKNOWLEDGES THAT
IT MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER CONSIDERATION OF THE
RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEY.

5.19Expiration or Termination of Agreement.    

            (A)       The term of this Agreement shall expire upon the later to
occur of the following events:  (i) the expiration of the Non-Relocation Period;
or (ii) repayment in full of the Loan in accordance with the terms hereof and in
all other Project Documents.

 (B)       Notwithstanding subsection (A) above, the Applicant may terminate
this Agreement prior to the expiration of the Non-Relocation Period so long as
it makes full repayment of the Funding, including any Forgiveness Credit
provided hereunder, less payments of principal paid in respect of the Loan, plus
liquidated damages equal to five percent (5.0%) of the total amount of the
Funding received, plus all costs and expenses related thereto.

(C)  Notwithstanding any such expiration or termination of this Agreement, all
indemnity rights set forth in Section 2.10(J) and elsewhere in this Agreement or
in any of the other Project Documents shall survive such expiration or
termination.

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

 

﻿

ARTICLE 6 - SPECIAL CONDITIONS:  NONE

﻿

[Remainder of Page Intentionally Left Blank]

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

 

﻿

﻿

IN WITNESS WHEREOF, the parties hereto make and enter into this Agreement.

﻿

VERMILLION, INC.

﻿

﻿

﻿

﻿

By:  /s/ Valerie B. Palmieri

Name: Valerie B. Palmieri

Title: President and CEO

Duly Authorized

﻿

Dated:  3/14/16 

﻿

﻿

﻿

﻿

STATE OF CONNECTICUT

DEPARTMENT OF ECONOMIC

AND COMMUNITY DEVELOPMENT

﻿

﻿

﻿

﻿

By:  /s/ Catherine H. Smith

Catherine H. Smith

Commissioner

Duly Authorized

﻿

Dated:  3/22/16 

﻿

﻿

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

 

EXHIBIT A

﻿

[Applicant’s Writings]

NONE

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

﻿

 

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

 

 

﻿

﻿

EXHIBIT B

INSURANCE REQUIREMENTS FOR NON-PROFIT AND FOR PROFIT ENTITIES

﻿

(A)  Applicant shall procure and maintain for the duration of the Agreement the
following types of insurance, in amounts no less than the stated limits, against
claims for injuries to persons or damages to property which may arise from or in
connection with the performance of the work hereunder; provided however, that if
this project is (i) financial assistance of less than $100,000, (ii) a planning
grant, or (iii) a predevelopment loan, only items 1 and 2 as set forth herein
shall apply:

﻿

﻿

1)Commercial General Liability:  $1,000,000 combined single limit per occurrence
for bodily injury, personal injury and property damage.  Coverage shall include
Premises and Operation, Independent Contractors, Product and Completed
Operations and Contractual Liability.  If a general aggregate is used, the
general aggregate limit shall apply separately to the Agreement or the general
aggregate limit shall be twice the occurrence limit.

﻿

2)Workers’ Compensation and Employer’s Liability:  Statutory coverage in
compliance with compensation laws of the State of Connecticut.  Coverage shall
include Employer’s Liability with a minimum limit of $100,000 each accident, and
$500,000 Disease – Policy limit, $100,000 each employee.

﻿

3)Automobile Liability: $1,000,000 combined single limit per accident for bodily
injury.  Coverage extends to owned, hired and non-owned automobiles.  If the
vendor/contractor does not own an automobile, but one is used in the execution
of the contract, then only hired and non-owned coverage is required.  If a
vehicle is not used in the execution of the contract then automobile coverage is
not required.

﻿

4)Directors and Officers Liability:  $1,000,000 per occurrence limit of
liability; provided, however, that Directors and Officers Liability insurance
shall not be required for limited liability corporations or limited
partnerships.

﻿

5)Comprehensive Crime Insurance:  $100,000 limit for each of the following
coverages:  Employee Dishonesty (Form O), Forgery/Alteration (Form B), and Money
and Securities coverage for Theft, Burglary, Robbery, Disappearance and
Destruction.

﻿

6)Builders Risk:  (Construction Phase) With respect to any work involving the
construction of real property during the construction project, if DECD is taking
a collateral position in the property, the Applicant shall maintain Builder’s
Risk insurance providing coverage for the entire work at the project
site.  Coverage shall be on a Completed Value form basis in an amount equal to
the projected value of the project.  Applicant agrees to endorse the State of
Connecticut as a Loss Payee.

﻿

 

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

 

 

7)Property Insurance:  (Post Construction)  If DECD is taking a collateral
position in the property, the Applicant shall maintain insurance covering all
risks of direct physical loss, damage or destruction to real and personal
property and improvements and betterments (including flood insurance if property
is within a duly designated Flood Hazard Area as shown on Flood Insurance Rate
Maps (FIRM) set forth by the Federal Emergency Management Agency (FEMA)) at 100%
of Replacement Value for such real and personal property, improvements and
betterments or the maximum amount available under the National Flood Insurance
Program.  The State of Connecticut shall be listed as a Loss Payee.

﻿

﻿

(B)  Additional Insurance Provisions

﻿

﻿

1)  The State of Connecticut Department of Economic and Community Development,
its officials and employees shall be named as an Additional Insured on the
Commercial General Liability policy.  Additional Insured status is not required
for items (A)2 through (A)7 above.

﻿

2)  Described insurance shall be primary coverage and Applicant and Applicant’s
insurer shall have no right of subrogation recovery or subrogation against the
State of Connecticut.

﻿

3)  Applicant shall assume any and all deductibles in the described insurance
policies.

﻿

4)  Without limiting Applicant’s obligation to procure and maintain insurance
for the duration identified in (A) above, each insurance policy shall not be
suspended, voided, cancelled or reduced except after thirty (30) days prior
written notice by certified mail has been given to the State of Connecticut,
with the exception that a ten (10) day prior written notice by certified mail
for non-payment of premium is acceptable.  

﻿

5)  Each policy shall be issued by an Insurance Company licensed to do business
by Connecticut Department of Insurance and having a Best Rating of A-, VII, or
equivalent or as otherwise approved by DECD.

﻿

﻿

 

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

 

 

Exhibit C

﻿

NOTICE TO EXECUTIVE BRANCH STATE CONTRACTORS AND PROSPECTIVE STATE

CONTRACTORS OF CAMPAIGN CONTRIBUTION AND SOLICITATION BAN

﻿

This notice is provided under the authority of Connecticut General Statutes
9‑612(g)(2), as amended by P.A. 10-1, and is for the purpose of informing state
contractors and prospective state contractors of the following law (italicized
words are defined below):

﻿

Campaign Contribution and Solicitation Ban

﻿

No state contractor, prospective state contractor, principal of a state contractor or principal of a prospective state contractor, with regard
to a state contract or state contract solicitation with
or from a state agency in the executive branch or a quasi-public
agency or a holder, or principal of a holder of a
 valid prequalification certificate, shall make a contribution to (i) an exploratory committee or candidate committee
established by
a candidate for nomination or election to the office of Governor, Lieutenant Governor, Attorney
General, State Comptroller, Secretary of the State  or State Treasurer, (ii) a
political committee authorized to make contributions
 or expenditures to or for the  benefit of such candidates, or (iii) a party
committee (which includes town committees).

﻿

In addition, no holder or principal of a holder of a valid prequalification certificate, shall make a contribution to (i) an exploratory
committee  or  candidate  committee  established  by  a  candidate
 for  nomination  or  election  to   the  office  of  State  senator  or  State
representative, (ii) a political committee authorized to make contributions
 or expenditures to or for the  benefit of such candidates, or (iii) a  party
 committee.

﻿

On and after January 1,
2011, no state contractor, prospective state contractor, principal
of a state contractor or  principal  of a prospective state contractor, with
regard to a state contract or state contract solicitation with or from a state
agency in the executive branch  or a
quasi-public agency or a holder, or principal of a holder of a valid prequalification certificate, shall knowingly solicit contributions from
the state contractor's or prospective state contractor's employees or from a subcontractor or principals of the subcontractor on behalf of (i)
an exploratory committee or candidate committee established by a candidate for nomination or election to the office of Governor,
Lieutenant Governor, Attorney General, State Comptroller, Secretary of
the State or State Treasurer, (ii) a political committee authorized to make
contributions or expenditures to or for the  benefit of such candidates,
or (iii) a party committee.

﻿

Duty to Inform

﻿

State contractors and prospective state contractors are required to inform their
principals of the above prohibitions, as applicable, and the possible penalties
and other consequences of any violation thereof.

﻿

Penalties for Violations

﻿

Contributions or solicitations of contributions made in violation of the above
prohibitions may result in the following civil and criminal penalties:

﻿

 

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

 

 

Civil penalties‑‑$2000 or twice the amount of the prohibited contribution,
whichever is greater, against a principal or a contractor. Any state contractor
or prospective state contractor which fails to make reasonable efforts to comply
with the provisions requiring notice to its principals of these prohibitions and
the possible consequences of their violations may also be subject to civil
penalties of $2000 or twice the amount of the prohibited contributions made by
their principals.

﻿

Criminal penalties‑Any knowing and willful violation of the prohibition is a
Class D felony, which may subject the violator to imprisonment of not more than
5 years, or $5000 in fines, or both.

﻿

Contract Consequences

﻿

In the case of a state contractor, contributions made or solicited in violation of the above prohibitions may result in the contract being
voided.

﻿

In the case of a prospective state contractor,
contributions made or solicited in violation of the above prohibitions shall result in the contract
described in the state contract solicitation not  being awarded to the
prospective state contractor, unless the State Elections Enforcement
Commission determines that  mitigating circumstances exist concerning such
violation.

﻿

The State shall not award any  other state contract to anyone found in
 violation of the above prohibitions for a period of one year after the
election for which such contribution is made  or
solicited, unless the State Elections Enforcement Commission
 determines that mitigating circumstances exist concerning such violation.

﻿

Additional information may be found on the website of the State Elections Enforcement Commission, www.ct.gov/seec. Click on the link
to “Lobbyist/Contractor Limitations.”

﻿

Definitions:

“State contractor” means a person, business entity or nonprofit organization
that enters into a state contract. Such person, business entity or nonprofit
organization shall be deemed to be a state contractor until December
thirty‑first of the year in which such contract terminates. “State contractor”
does not include a municipality or any other political subdivision of the state,
including any entities or associations duly created by the municipality or
political subdivision exclusively amongst themselves to further any purpose
authorized by statute or charter, or an employee in the executive or legislative
branch of state government or a quasi-public agency, whether in the classified
or unclassified service and full or part‑time, and only in such person’s
capacity as a state or quasi‑public agency employee.

﻿

“Prospective state contractor” means a person, business entity or nonprofit
organization that (i) submits a response to a state contract solicitation by the
state, a state agency or a quasi‑public agency, or a proposal in response to a
request for proposals by the state, a state agency or a quasi‑public agency,
until the contract has been entered into, or (ii) holds a valid prequalification
certificate issued by the Commissioner of Administrative Services under section
4a‑100. “Prospective state contractor” does not include a municipality or any
other political subdivision of the state, including any entities or associations
duly created by the municipality or political subdivision exclusively amongst
themselves to further any purpose authorized by statute or charter, or an
employee in the executive or legislative branch of state government or a
quasi‑public agency, whether in the classified or unclassified service and full
or part‑time, and only in such person’s capacity as a state or quasi‑public
agency employee.

 

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

 

 

﻿

“Principal of a state contractor or prospective state contractor” means (i) any
individual who is a member of the board of directors of, or has an ownership
interest of five per cent or more in, a state contractor or prospective state
contractor, which is a business entity, except for an individual who is a member
of the board of directors of a nonprofit organization, (ii) an individual who is
employed by a state contractor or prospective state contractor, which is a
business entity, as president, treasurer or executive vice president, (iii) an
individual who is the chief executive officer of a state contractor or
prospective state contractor, which is not a business entity, or if a state
contractor or prospective state contractor has no such officer, then the officer
who duly possesses comparable powers and duties, (iv) an officer or an employee
of any state contractor or prospective state contractor who has managerial or
discretionary responsibilities with respect to a state contract, (v) the spouse
or a dependent child who is eighteen years of age or older of an individual
described in this subsection, or (vi) a political committee established or
controlled by an individual described in this subsection or the business entity
or nonprofit organization that is the state contractor or prospective state
contractor.

﻿

“State contract” means an agreement or contract with the state or any state
agency or any quasi‑public agency, let through a procurement process or
otherwise, having a value of fifty thousand dollars or more, or a combination or
series of such agreements or contracts having a value of one hundred thousand
dollars or more in a calendar year, for (i) the rendition of services, (ii) the
furnishing of any goods, material, supplies, equipment or any items of any kind,
(iii) the construction, alteration or repair of any public building or public
work, (iv) the acquisition, sale or lease of any land or building, (v) a
licensing arrangement, or (vi) a grant, loan or loan guarantee. “State contract”
does not include any agreement or contract with the state, any state agency or
any quasi‑public agency that is exclusively federally funded, an education loan
or a loan to an individual for other than commercial purposes or any
 agreement or contract between the state or any
state agency and the United States Department of the Navy or the
United States Department of Defense.

﻿

“State contract solicitation” means a request by a state agency or quasi‑public
agency, in whatever form issued, including, but not limited to, an invitation to
bid, request for proposals, request for information or request for quotes,
inviting bids, quotes or other types of submittals, through a competitive
procurement process or another process authorized by law waiving competitive
procurement.

﻿

“Managerial or discretionary responsibilities with respect to a state contract”
means having direct, extensive and substantive responsibilities with respect to
the negotiation of the state contract and not peripheral, clerical or
ministerial responsibilities.

﻿

“Dependent child” means a child residing in an individual’s household who may
legally be claimed as a dependent on the federal income tax of such individual.

﻿

“Solicit” means (A) requesting that a contribution be made, (B) participating in
any fund‑raising activities for a candidate committee, exploratory committee,
political committee or party committee, including, but not limited to,
forwarding tickets to potential contributors, receiving contributions for
transmission to any such committee or bundling contributions, (C) serving as
chairperson, treasurer or deputy treasurer of any such committee, or (D)
establishing a political committee for the sole purpose of soliciting or
receiving contributions for any committee. Solicit

 

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

 

 

does not include: (i) making a contribution that is otherwise permitted by
Chapter 155 of the Connecticut General Statutes; (ii) informing any person of a
position taken by a candidate for public office or a public official, (iii)
notifying the person of any activities of, or contact information for, any
candidate for public office; or (iv) serving as a member in any party committee
or as an officer of such committee that is not otherwise prohibited in this
section.

﻿

“Subcontractor” means any person, business entity or nonprofit organization that contracts to perform part or all of the obligations of a state contractor's
state contract. Such person, business entity or nonprofit organization shall be deemed to be a subcontractor until December thirty first of the year in which
the subcontract terminates. “Subcontractor” does not include (i) a
municipality or any other political subdivision of
the state, including any entities or associations duly created by the
 municipality or political subdivision exclusively amongst themselves to further any purpose authorized by statute or charter,
or (ii) an employee in the executive or legislative
branch of state government or a quasi-public agency, whether
in the classified or unclassified  service and full or part-time, and only in
such person's capacity as a state or  quasi-public agency employee.

﻿

“Principal of a subcontractor” means (i) any individual who is a member of the
 board of directors of, or has an ownership interest of five per
cent or more in, a subcontractor, which is a business entity,
except for an individual who is a member of the board of directors
of a nonprofit organization, (ii) an individual
who is employed by a subcontractor, which is a business entity, as
president, treasurer or executive vice  president, (iii) an individual who is
the chief executive officer of a subcontractor, which is not
a business entity, or if a subcontractor has no such officer, then the officer who duly possesses comparable
powers and duties, (iv) an officer or an employee of any subcontractor who has managerial or discretionary responsibilities with respect to a subcontract
with a state contractor, (v) the spouse or a dependent child who is eighteen years of age or older of an individual described in this subparagraph, or (vi) a
political committee established or controlled by
an individual described in this subparagraph or the business entity or nonprofit
organization that is the subcontractor.

 

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