Exhibit 10.1

 

 

STOCK PURCHASE AGREEMENT

dated as of October 20, 2015

by and among

GE Medical Holding AB, as Seller,

NeoGenomics Laboratories, Inc., as Buyer,

and

NeoGenomics, Inc., as Parent

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS

     2   

        Section 1.01

   Certain Defined Terms      2   

ARTICLE II PURCHASE AND SALE; CLOSING

     2   

        Section 2.01

   Purchase and Sale of the Shares      2   

        Section 2.02

   Closing      2   

ARTICLE III PURCHASE PRICE

     2   

        Section 3.01

   Purchase Price      2   

        Section 3.02

   Payments at Closing      3   

        Section 3.03

   Certain Closing Deliverables      3   

        Section 3.04

   Closing Statement      3   

        Section 3.05

   Proposed Statement      3   

        Section 3.06

   Post-Closing Adjustment      4   

        Section 3.07

   Certain Calculation Principles      4   

        Section 3.08

   Seller’s Retention of Certain Assets of Company      5   

        Section 3.09

   Withholding      5   

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER

     5   

        Section 4.01

   Incorporation and Qualification of Company and Company Subsidiary      5   

        Section 4.02

   Capital Structure of Company and Company Subsidiary      5   

        Section 4.03

   Incorporation and Authority of Seller; Enforceability      6   

        Section 4.04

   No Conflict      7   

        Section 4.05

   Consents and Approvals      7   

        Section 4.06

   Financial Information; Absence of Undisclosed Liabilities      7   

        Section 4.07

   Absence of Certain Changes or Events      8   

        Section 4.08

   Absence of Litigation      8   

        Section 4.09

   Compliance with Laws;      8   

        Section 4.10

   Permits      8   

        Section 4.11

   Compliance with Healthcare Laws      9   

        Section 4.12

   Ethical Practices      11   

        Section 4.13

   Intellectual Property      12   

        Section 4.14

   Environmental Matters      14   

        Section 4.15

   Contracts; Customers; Suppliers      14   

        Section 4.16

   Employment and Employee Benefits Matters      16   

        Section 4.17

   Taxes      18   

        Section 4.18

   Real Property      19   

        Section 4.19

   Management Continuity      20   

        Section 4.20

   Title; Equipment and Other Tangible Property      20   

        Section 4.21

   Banks      20   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

        Section 4.22

   Insurance      20   

        Section 4.23

   Brokers      21   

        Section 4.24

   Services      21   

        Section 4.25

   Accounts Receivable      21   

ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT

     21   

        Section 5.01

   Incorporation and Authority of Parent and Buyer      21   

        Section 5.02

   Qualification of Parent and Buyer      21   

        Section 5.03

   No Conflict      22   

        Section 5.04

   Consents and Approvals      22   

        Section 5.05

   Stock Issuance      22   

        Section 5.06

   Compliance with Laws      22   

        Section 5.07

   Permits      23   

        Section 5.08

   Compliance with Healthcare Laws      24   

        Section 5.09

   Ethical Practices      25   

        Section 5.10

   Securities Matters      26   

        Section 5.11

   Financial Ability      26   

        Section 5.12

   Brokers      27   

        Section 5.13

   Solvency      27   

        Section 5.14

   Parent Stockholder Approval      28   

        Section 5.15

   Certain Matters as to Parent and Buyer      28   

        Section 5.16

   SEC Reports; Financial Statements; Registration Rights      28   

        Section 5.17

   Capital Structure of Parent and Buyer      29   

        Section 5.18

   No Undisclosed Liabilities      30   

        Section 5.19

   Absence of Certain Changes or Events      31   

        Section 5.20

   Absence of Litigation      31   

        Section 5.21

   Intellectual Property      31   

        Section 5.22

   Environmental Matters      32   

        Section 5.23

   Employee Benefits Matters; Labor      32   

        Section 5.24

   Taxes      32   

        Section 5.25

   Real Property      34   

        Section 5.26

   Opinion of Financial Advisors      34   

        Section 5.27

   Parent Board Recommendation      35   

        Section 5.28

   Anti-Takeover Provisions      35   

ARTICLE VI ADDITIONAL AGREEMENTS

     35   

        Section 6.01

   Conduct of Business Before the Closing      35   

        Section 6.02

   Access to Information      38   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

        Section 6.03

   Confidentiality      39   

        Section 6.04

   Regulatory and Other Authorizations; Consents      40   

        Section 6.05

   Stockholder Approval      41   

        Section 6.06

   Proxy Statement      42   

        Section 6.07

   Shared Contracts      43   

        Section 6.08

   Intercompany Obligations      43   

        Section 6.09

   Other Transaction Agreements      44   

        Section 6.10

   Cooperation      44   

        Section 6.11

   Financing      44   

        Section 6.12

   No Solicitation; Exclusivity      46   

        Section 6.13

   Stockholder Litigation      49   

        Section 6.14

   No Control of Other Party’s Business      49   

        Section 6.15

   Takeover Laws      49   

        Section 6.16

   Notification of Certain Matters      49   

        Section 6.17

   Parent Guaranty      50   

        Section 6.18

   NASDAQ Listing      50   

        Section 6.19

   Additional Financial Statements      50   

ARTICLE VII POST-CLOSING COVENANTS

     51   

        Section 7.01

   Access      51   

        Section 7.02

   Rights to Seller Names and Seller Marks      51   

        Section 7.04

   Insurance      52   

        Section 7.05

   Books and Records of Company and Company Subsidiary      53   

        Section 7.06

   Solvency After Closing      54   

        Section 7.07

   Further Assurances      54   

ARTICLE VIII EMPLOYEE MATTERS

     54   

ARTICLE IX TAX MATTERS

     55   

        Section 9.01

   Filing of Tax Returns by Seller      55   

        Section 9.02

   Filing of Tax Returns by Buyer      55   

        Section 9.03

   Straddle Periods      56   

        Section 9.04

   Refunds; Transaction Deductions      56   

        Section 9.05

   Agreed Tax Treatment      56   

        Section 9.06

   Post-Closing Actions      56   

        Section 9.07

   Transfer Taxes      57   

        Section 9.08

   Tax Sharing Agreements      57   

        Section 9.09

   Tax Cooperation      57   

        Section 9.10

   Section 338      57   

        Section 9.11

   FIRPTA Certificate      57   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

ARTICLE X CONDITIONS TO CLOSING

     58   

        Section 10.01

   Conditions to Obligations of Seller      58   

        Section 10.02

   Conditions to Obligations of Buyer      58   

        Section 10.03

   Frustration of Closing Conditions      59   

        Section 10.04

   Waiver of Closing Conditions      59   

ARTICLE XI TERMINATION

     59   

        Section 11.01

   Termination      59   

        Section 11.02

   Notice of Termination      60   

        Section 11.03

   Effect of Termination      60   

        Section 11.04

   Termination Fees      60   

ARTICLE XII SURVIVAL

     61   

        Section 12.01

   Survival of Representations and Warranties      61   

        Section 12.02

   Indemnification by Seller      62   

        Section 12.03

   Indemnification by Buyer and Parent      63   

        Section 12.04

   Character of Indemnity Payments      64   

        Section 12.05

   Notice and Resolution of Claims      65   

        Section 12.06

   Exclusive Remedies      67   

        Section 12.07

   Additional Indemnification Provisions      67   

        Section 12.08

   Acknowledgements      69   

        Section 12.09

   Limitation on Liability      69   

ARTICLE XIII MISCELLANEOUS

     70   

        Section 13.01

   Rules of Construction      70   

        Section 13.02

   Expenses      71   

        Section 13.03

   Notices      71   

        Section 13.04

   Public Announcements      72   

        Section 13.05

   Severability      73   

        Section 13.06

   Assignment      73   

        Section 13.07

   No Third-Party Beneficiaries      73   

        Section 13.08

   Entire Agreement      73   

        Section 13.09

   Amendments      73   

        Section 13.10

   Waiver      73   

        Section 13.11

   Agreement Controls      74   

        Section 13.12

   Governing Law      74   

        Section 13.13

   Dispute Resolution; Consent to Jurisdiction      74   

        Section 13.14

   Waiver of Jury Trial      74   

        Section 13.15

   Admissibility into Evidence      75   

 

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TABLE OF CONTENTS

(continued)

 

          Page  

        Section 13.16

   Remedies; Specific Performance      75   

        Section 13.17

   Non-Recourse      75   

        Section 13.18

   Interest      75   

        Section 13.19

   Disclosure Schedules and Exhibits      75   

        Section 13.20

   Privilege      76   

        Section 13.21

   Counterparts      77   

 

5

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EXHIBITS      Exhibit A      Definitions Exhibit B      Voting Agreements
Exhibit C      Lockup Agreements Exhibit D      Commitment Letters Exhibit E
     MultiOmyx License Agreement Exhibit F      Transition Services Agreement
Exhibit G      Investor Board Rights, Lock-up & Standstill Agreement Exhibit H
     Registration Rights Agreement Exhibit I      Employee Matters Exhibit J
     Certificate of Designation Exhibit K      Form of Legal Opinion Exhibit L
     Sample Net Working Capital Statement Exhibit M      Form of Trademark
License Agreement SCHEDULES     

[Disclosure schedules to be listed]

 

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This STOCK PURCHASE AGREEMENT, dated as of October 20, 2015 (the “Agreement
Date”), is made by and among GE Medical Holding AB, a private limited company
(privat aktiebolag) organized under the laws of the Kingdom of Sweden (Reg.
No. 556648-9315) (“Seller”), NeoGenomics Laboratories, Inc., a Florida
corporation (“Buyer”) and NeoGenomics, Inc., a Nevada corporation (“Parent” and
collectively with Buyer and Seller, the “Parties” and each individually, a
“Party”).

PRELIMINARY STATEMENTS

A. Seller owns all issued and outstanding shares of common stock (the “Shares”)
of Clarient, Inc., a Delaware corporation (“Company”), which such Shares
constitute the only issued and outstanding Equity Interests of Company.

B. Company owns all issued and outstanding shares of common stock of Clarient
Diagnostic Services, Inc., a Delaware corporation (“Company Subsidiary”), which
such shares constitute the only issued and outstanding Equity Interests of
Company Subsidiary.

C. Company and Company Subsidiary are engaged in the business of providing
cancer genetic and molecular laboratory testing services, including, but not
limited to, cytogenetics, flow cytometry, fluorescence in-situ hybridization
(FISH) morphological studies, immunohistochemistry and molecular testing, to
hematologists, oncologists, urologists, pathologists, hospitals, medical
reference laboratories, clinical research organizations, and pharmaceutical
companies (the “Business”).

D. Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
all of the Shares, on the terms and subject to the conditions set forth in this
Agreement.

E. All of the issued and outstanding Equity Interests of Buyer are owned by
Parent.

F. In order to induce Seller to enter into the Transaction Agreements and to
consummate the Transactions and in consideration thereof, (i) Parent has agreed
to guaranty all obligations of Buyer under the Transaction Agreements and in
relation to the Transactions and enter into the Parent Transaction Agreements
and (ii) Buyer has agreed to enter into the Buyer Transaction Agreements.

G. Concurrently with the execution and delivery of this Agreement, and as a
condition and inducement to Seller’s willingness to enter into this Agreement,
all executive officers and directors of Parent are entering into Voting
Agreements in the form attached as Exhibit B hereto (the “Voting Agreements”)
pursuant to which those stockholders, among other things, will agree to vote all
securities in Parent beneficially owned by them in favor of the Proposals.

H. Concurrently with the execution and delivery of this Agreement, and as a
condition and inducement to Seller’s willingness to enter into this Agreement,
Parent’s Chief Executive Officer and its Executive Vice President—Finance are
each entering into a Lockup Agreement in the form attached as Exhibit C hereto
(the “Lockup Agreement”) pursuant to which, among other things, each will agree
to not sell any of their shares of Parent’s common stock, par value $0.001 per
share (“Common Stock”) or any other equity securities of Parent, in each case as
set forth therein.

I. Concurrently with the execution and delivery of this Agreement, and as a
condition and inducement to Buyer’s willingness to enter into this Agreement and
issue the Stock Consideration, Seller is entering into an Investor Board Rights,
Lock-up & Standstill Agreement in the form attached as Exhibit G.

 

1

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NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Certain Defined Terms. Capitalized terms used in this Agreement
(including in the Preliminary Statements above and in the Schedules and Exhibits
attached hereto) that are not defined herein have the meanings specified in
Exhibit A.

ARTICLE II

PURCHASE AND SALE; CLOSING

Section 2.01 Purchase and Sale of the Shares. On the terms and subject to the
conditions set forth in this Agreement, at the Closing, Seller shall sell,
convey, assign, transfer and deliver to Buyer, free and clear of any and all
Liens (except Liens under applicable securities Laws), and Buyer shall purchase,
acquire and accept from Seller, all of Seller’s right, title and interest in and
to the Shares.

Section 2.02 Closing. The closing of the sale and purchase of the Shares (the
“Closing”) shall take place at the offices of Paul Hastings LLP, 71 South Wacker
Drive, Suite 4500, Chicago, IL 60606 at 9:00 a.m. (Central time) on the date
that is three (3) Business Days after the satisfaction or written waiver (to the
extent permitted by applicable Law) of the Closing Conditions in accordance with
Article X (other than those Closing Conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or waiver of those
Closing Conditions at such time), or on such other date or at such other time or
place as the Parties may agree in writing. The date on which the Closing occurs
is referred to in this Agreement as the “Closing Date”. For all purposes under
this Agreement and each other Transaction Agreement, (a) all matters at the
Closing will be considered to take place simultaneously and (b) the Closing
shall be deemed effective as of the Effective Time.

ARTICLE III

PURCHASE PRICE

Section 3.01 Purchase Price. The aggregate amount of consideration to be paid by
Buyer to Seller or Seller’s designees for the sale of all of the Shares (the
“Purchase Price”), subject to the terms of this Agreement, shall consist of
(a) an amount in cash equal to the sum of (i) $80,000,000 (the “Base Cash
Purchase Price”), plus (ii) the Final Working Capital Increase (if any), less
(iii) the Final Working Capital Decrease (if any), plus (iv) the amount of Final
Cash (as defined below), if any, minus (v) the amount of Final Indebtedness (as
defined below), if any, (b) 15,000,000 shares of Common Stock (the “Parent
Common Stock”) and (c) 14,666,667 shares of Preferred Stock, as may be adjusted
by the Cash Purchase Price Increase Amount (the “Parent Preferred Stock” and
together with the Parent Common Stock, the “Stock Consideration”). The issuance
of the Parent Common Stock and the Parent Preferred Stock hereunder is defined
as the “Stock Issuance”). Notwithstanding the foregoing, Buyer shall have the
right, but not the obligation, to increase the amount of the Base Cash Purchase
Price by an amount of up to $110,000,000 (the amount of any such increase, the
“Cash Purchase Price Increase Amount”), by delivering an irrevocable written
notice to Seller no later than two (2) Business Days prior to the Closing Date
of the Cash Purchase Price Increase Amount, and make a corresponding reduction
in the number of shares of Parent Preferred Stock to be issued to Seller as part
of the Stock Consideration, which reduction shall be calculated by dividing the
Cash Purchase Price Increase Amount by $7.50, but only if the Cash Purchase
Price Increase Amount is financed from Buyer’s cash-on-hand as of the Closing or
the proceeds of a Permitted Financing (if any).

 

2

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Section 3.02 Payments at Closing. At the Closing, Buyer shall (a) pay to Seller
or Seller’s designees, by wire transfer of immediately available funds to the
Seller Account, the sum of the following (the “Closing Cash Payment”): (i) the
Base Cash Purchase Price, (ii) the Cash Purchase Price Increase Amount (if any),
plus (iii) the Estimated Working Capital Increase (if any), less (iv) the
Estimated Working Capital Decrease (if any), plus (v) the amount of Estimated
Cash (if any), minus (vi) the amount of the Estimated Indebtedness (if any), and
(b) issue and deliver to Seller, the Stock Consideration.

Section 3.03 Certain Closing Deliverables. At the Closing, (a) Seller shall
deliver or cause to be delivered to Buyer each item set forth on
Schedule 3.03(a) and (b) Buyer and Parent shall deliver or cause to be delivered
to Seller each item set forth on Schedule 3.03(b).

Section 3.04 Closing Statement. No fewer than five (5) Business Days before the
Closing Date, Seller shall prepare and deliver to Buyer a closing statement (the
“Closing Statement”), which shall include (a) the Estimated Working Capital
Statement prepared in accordance with the Sample Net Working Capital Statement
and (b) a good faith estimate of the amount of (i) Cash (the “Estimated Cash”)
and (ii) Indebtedness (the “Estimated Indebtedness”), in each case as of the
Effective Time.

Section 3.05 Proposed Statement.

(a) Within ninety (90) days after the Closing Date, Buyer shall provide to
Seller a statement (the “Proposed Statement”), which will include (a) the
Proposed Working Capital Statement and (b) the amount of (i) Cash (the “Proposed
Cash”) and (ii) Indebtedness the (“Proposed Indebtedness”), in each case as of
the Effective Time (which shall be calculated prior to the application of any
payment made under Section 3.02).

(b) Seller shall have sixty (60) days (the “Review Period”) after Buyer’s
delivery of the Proposed Statement to review the same. During the Review Period,
Buyer and Parent shall (and shall cause their respective Affiliates and
Representatives to) provide Seller and its Representatives with full access to
Parent’s and Buyer’s work papers and all books and records of Parent and Buyer
and their respective Affiliates (including, after the Closing, Company and
Company Subsidiary) used in or pertaining to Buyer’s review of the Proposed
Statement, and the work papers of Parent’s and Buyer’s accountants relating to
the review of the Proposed Statement, and Parent and Buyer shall promptly, and
in any event within such time frame as reasonably required by Seller, make
available the individuals in their and their respective Affiliates’ or
Representatives’ employ as well as Representatives of their independent
accountants responsible for and knowledgeable about the information used in or
pertaining to the preparation of the Proposed Statement, to respond to the
reasonable inquiries of, or requests for information by, Seller or its
Representatives. The Parties agree that the Review Period shall be extended on a
day-for-day basis for any period in which either of Parent or Buyer does not
provide the access and/or information required by the preceding sentence. Each
of Parent and Buyer agree that, following the Closing through the date that the
Final Statement becomes conclusive and binding upon the Parties in accordance
with this Article III, they will not (and will cause their respective Affiliates
not to) take any actions with respect to any books, records, policies or
procedures on which the Proposed Statement is based or on which the Final
Statement is to be based that are inconsistent with GAAP or that would impede or
materially delay the determination of the amount of Final Working Capital, Final
Cash or Final Indebtedness or the preparation of the Dispute Notice or the Final
Statement in the manner and utilizing the methods required by this Agreement.

(c) If Seller disputes any item set forth in the Proposed Statement, Seller
shall, during the Review Period, deliver written notice to Buyer of the same,
specifying in reasonable detail the basis for such dispute and Seller’s proposed
modifications to the Proposed Working Capital Statement, Proposed Cash or
Proposed Indebtedness (such notice, the “Dispute Notice”). During the thirty
(30)-day period immediately following Seller’s delivery of a Dispute Notice (the
“Resolution Period”), Buyer and Seller shall negotiate in good faith to reach an
agreement as to any matters identified in such Dispute Notice as being in
dispute, and, to the extent such matters are so resolved within the Resolution
Period, then the Proposed Statement as revised to incorporate such changes as
have been agreed between Buyer and Seller shall be conclusive and binding upon
all Parties as the

 

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Final Statement. If Seller fails to notify Buyer of any disputes within the
Review Period relating to the Proposed Working Capital Statement, Proposed Cash
or Proposed Indebtedness, then the Proposed Working Capital Statement, Proposed
Cash and Proposed Indebtedness shall be conclusive and binding upon all Parties
as the Final Working Capital Statement, Final Cash and Final Indebtedness at the
end of the Review Period.

(d) If Buyer and Seller fail to resolve all such matters in dispute within the
Resolution Period, then (subject to the last sentence of Section 3.05(d)) any
matters identified in such Dispute Notice that remain in dispute following the
expiration of the Resolution Period shall be finally and conclusively determined
by PricewaterhouseCoopers LLP (“PwC”), or if PwC is unable or unwilling to serve
in such capacity, Grant Thornton LLP (“Grant Thornton”) (and if both PwC and
Grant Thornton are unable or unwilling to serve in such capacity, such other
globally recognized accounting firm as shall be agreed upon in writing by Seller
and Buyer) (each, as applicable, the “Independent Accounting Firm”).

(e) Seller and Buyer shall instruct the Independent Accounting Firm to promptly,
but no later than thirty (30) days after its acceptance of its appointment,
determine (it being understood that in making such determination, the
Independent Accounting Firm shall be functioning as an expert and not as an
arbitrator), based solely on written presentations of Buyer and Seller submitted
to the Independent Accounting Firm and not by independent review, only those
matters in dispute and will render a written report setting forth its
determination as to the disputed matters and the resulting calculations of Final
Working Capital, the Final Working Capital Increase (if any), the Final Working
Capital Decrease (if any), Final Cash, Final Indebtedness and the Post-Closing
Adjustment (if any), which report and calculations will be conclusive and
binding upon all Parties absent manifest mathematical error. A copy of all
materials submitted to the Independent Accounting Firm pursuant to the
immediately preceding sentence shall be provided by Seller or Buyer, as
applicable, to the other Party concurrently with the submission thereof to the
Independent Accounting Firm. In resolving any disputed item, the Independent
Accounting Firm (i) shall be bound by the provisions of this Section 3.05(d) and
Section 3.07 and (ii) may not assign a value to any item greater than the
greatest value for such item claimed by Buyer or Seller, or less than the
smallest value for such item claimed by Buyer or Seller. If, before the
Independent Accounting Firm renders its determination with respect to the
disputed items in accordance with this Section 3.05(d), (x) Seller notifies
Buyer in writing of its agreement with any items in the Proposed Statement or
(y) Buyer notifies Seller in writing of its agreement with any items in the
Estimated Statement, then in each case such items as so agreed will be
conclusive and binding on all Parties immediately upon such notice.

(f) The fees and expenses of the Independent Accounting Firm shall be borne by
the Party whose aggregate position with respect to Final Working Capital, Final
Indebtedness and Final Cash is further from the aggregate position of the same
amounts as determined by the Independent Accounting Firm pursuant to
Section 3.5(e) or, if the aggregate position of each Party with respect to such
amounts are equidistant from the aggregate position of the same amounts as
determined by the Independent Accounting Firm pursuant to Section 3.5(e), then
the fees and expenses of the Independent Accounting Firm shall be borne equally
by the Parties.

Section 3.06 Post-Closing Adjustment. If the Post-Closing Adjustment is a
positive amount, Buyer shall pay an amount equal to the Post-Closing Adjustment
to Seller. If the Post-Closing Adjustment is a negative amount, Seller shall
repay an amount equal to the absolute value of the Post-Closing Adjustment to
Buyer. Any payment due under this Section 3.06 shall be paid by wire transfer of
immediately available funds to the Seller Account or the Buyer Account, as
applicable, within ten (10) days after the date on which the Final Working
Capital Statement becomes conclusive and binding on the Parties in accordance
with the provisions of Section 3.05, and, if not paid within such period, shall
bear interest at the Interest Rate. All computations of interest shall be made
in accordance with Section 13.18.

Section 3.07 Certain Calculation Principles. Each Net Working Capital Statement
shall be (a) in a format substantially similar to the Sample Net Working Capital
Statement; (b) prepared and determined from the books and records of Company and
Company Subsidiary and in accordance with the Sample Net Working Capital

 

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Statement, and (c) consistent with the provisions of this Agreement relating to
the Parties’ respective rights and obligations for the payment or reimbursement
of costs and expenses. Each of the Estimated Cash, Estimated Indebtedness,
Proposed Cash, Proposed Indebtedness, Final Cash and Final Indebtedness shall be
(i) estimated and determined from the books and records of Company and Company
Subsidiary, and (ii) consistent with the provisions of Section 13.02.

Section 3.08 Seller’s Retention of Certain Assets of Company. The Parties agree
that those assets and other items listed on Schedule 3.08, and all right, title
and interest thereto shall remain the sole and exclusive property of Seller or
its Affiliates and shall not be sold, transferred or conveyed to Buyer or Parent
or any of their respective Affiliates pursuant to any Transaction Agreement or
in connection with the Transactions.

Section 3.09 Withholding. Notwithstanding any other provision in this Agreement
to the contrary but subject to the remainder of this Section 3.09, Parent or
Buyer, as the case may be, shall be entitled to deduct and withhold from the
Purchase Price otherwise deliverable to Seller pursuant to this Agreement, such
amounts as Parent or Buyer, as the case may be, is required to deduct and
withhold with respect to the making of such payment under applicable Tax Law.
If, in connection with the Closing, Seller provides to Buyer a certificate under
Section 1445(b)(2) of the Code and the applicable Treasury Regulations
thereunder in form and substance reasonably satisfactory to Buyer, then neither
Parent nor Buyer shall be entitled to deduct and withhold pursuant to this
Section 3.09 from any amounts payable to Seller unless (i) such withholding is
the result of a change in Law following the date of this Agreement, (ii) Buyer
provides Seller with written notice of its intent to make such withholding or
deduction at least two (2) Business Days prior to payment of such amounts and
(iii) Seller consents in writing to such withholding or deduction prior to such
withholding or deduction being made, which consent shall not be unreasonably
conditioned, delayed or withheld. To the extent that amounts are so withheld and
timely and properly paid over to the proper Government Authority, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to Seller.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Buyer that:

Section 4.01 Incorporation and Qualification of Company and Company Subsidiary.
Company and Company Subsidiary are each a corporation duly incorporated, validly
existing and in good standing under the Laws of the State of Delaware. Company
and Company Subsidiary each has the corporate power and authority to own,
manage, lease and hold its Assets and to operate the Business as and where such
Assets are presently located and such Business is now conducted. Neither the
character of the Assets nor the nature of the Business requires Company or
Company Subsidiary to be duly qualified to do business as a foreign corporation
in any jurisdiction outside those identified in Schedule 4.01, except where the
failure to be so qualified would not, individually or in the aggregate, have a
Company Material Adverse Effect. Company and Company Subsidiary are each
qualified as a foreign corporation and is in good standing in each jurisdiction
listed with respect to Company or Company Subsidiary, as applicable, in
Schedule 4.01.

Section 4.02 Capital Structure of Company and Company Subsidiary.

(a) The authorized equity and capital stock of Company consists of
(A) 150,000,000 shares of common stock, par value $0.01 per share, of which 100
shares are issued and outstanding and constitute the Shares, and (B) 8,000,000
shares of preferred stock, par value $0.01 per share, of which no shares are
issued and outstanding. Seller owns all of the Shares beneficially and of
record, free and clear of all Liens, except (i) any Lien arising out of, under
or in connection with the Securities Act or any other applicable securities
Laws; (ii) any Lien arising out of, under or in connection with this Agreement
or any other Transaction Agreement; or (iii) any Lien created

 

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by or through, or resulting from any facts or circumstances relating to, Buyer,
Parent or their respective Affiliates, and no Equity Interests are held in
Company’s treasury. All of the Shares have been duly authorized and validly
issued, are fully paid and non-assessable and were not issued in violation of
(i) any preemptive or other rights of any Person to acquire securities of
Company, or (ii) any applicable federal or state securities laws, and the rules
and regulations promulgated thereunder. There are no options, subscriptions,
warrants, calls, or rights of conversion or other similar rights (preemptive or
otherwise), agreements, arrangements or commitments obligating Company to issue
or sell any shares of its capital stock, other Equity Interests or securities
convertible into or exchangeable for its shares or other Equity Interests or any
shares or other Equity Interests of Company, other than as provided in this
Agreement. There are no voting trusts, stockholder agreements, proxies or other
agreements in effect with respect to the voting or transfer of the Shares or
other Equity Interests of Company.

(b) Company owns, free and clear of any and all Liens (except Liens under
applicable securities Laws), all of the issued and outstanding equity and
capital stock of Company Subsidiary, and Company does not own, directly or
indirectly, any other outstanding securities or other Equity Interests in, any
other Person.

(c) The authorized equity and capital stock of Company Subsidiary consists
solely of 1,000 shares of common stock, par value $0.01 per share (the “Company
Subsidiary Common Stock”), of which 1,000 shares are issued and outstanding.
Company owns all of the Company Subsidiary Common Stock beneficially and of
record, free and clear of all Liens, except (i) any Lien arising out of, under
or in connection with the Securities Act or any other applicable securities
Laws; (ii) any Lien arising out of, under or in connection with this Agreement
or any other Transaction Agreement; or (iii) any Lien created by or through, or
resulting from any facts or circumstances relating to, Buyer, Parent or their
respective Affiliates, and no Equity Interests are held in Company Subsidiary’s
treasury. All of the shares of Company Subsidiary Common Stock have been duly
authorized and validly issued, are fully paid and non-assessable and were not
issued in violation of (i) any preemptive or other rights of any Person to
acquire securities of Company Subsidiary, or (ii) any applicable federal or
state securities laws, and the rules and regulations promulgated thereunder.
There are no options, subscriptions, warrants, calls, or rights of conversion or
other similar rights (preemptive or otherwise), agreements, arrangements or
commitments obligating Company Subsidiary to issue or sell any shares of its
capital stock, other Equity Interests or securities convertible into or
exchangeable for its shares or other Equity Interests or any shares or other
Equity Interests of Company Subsidiary, other than as provided in this
Agreement. There are no voting trusts, stockholder agreements, proxies or other
agreements in effect with respect to the voting or transfer of the Company
Subsidiary Common Stock or other Equity Interests of Company Subsidiary.

(d) Company Subsidiary does not own, directly or indirectly, any outstanding
securities or other Equity Interests in, any other Person.

(e) A copy of Company’s and Company Subsidiary’s certificate of incorporation
and bylaws, current as of the Agreement Date, have been provided to Buyer, and
each such copy is true, accurate and complete and reflects all amendments made
through the Agreement Date.

Section 4.03 Incorporation and Authority of Seller; Enforceability. Seller is a
private limited company (privat aktiebolag) duly organized and validly existing
under the Laws of the Kingdom of Sweden. Seller has the corporate power and
authority to operate its business as now conducted. Seller has the requisite
corporate power to execute, deliver and perform its obligations under the Seller
Transaction Agreements (including the consummation of the Seller Transactions).
The execution, delivery and performance by Seller of the Seller Transaction
Agreements have been duly and validly authorized by all requisite corporate
action on the part of Seller and no other proceedings on the part of the Seller,
Company or Company Subsidiary are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been, and
upon execution and delivery thereof, the other Seller Transaction Agreements
will be, duly executed and delivered by Seller, and (assuming due authorization,
execution and delivery thereof by the other parties hereto and thereto) this
Agreement constitutes, and upon execution and delivery thereof, the other Seller
Transaction

 

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Agreements will constitute, legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms, subject to
the Bankruptcy and Equity Exception.

Section 4.04 No Conflict. Provided that all Consents contemplated by
Section 4.05 have been obtained or taken, except as set forth on Schedule 4.04,
and except (a) as may result from any facts or circumstances relating to Parent,
Buyer or their respective Affiliates or (b) in the case of clauses (ii) and
(iii) below, for any such conflicts, violations, breaches, defaults, rights or
Liens as would not reasonably be expected to have a Company Material Adverse
Effect and would not materially impair or delay the ability of Seller to
consummate the Seller Transactions or otherwise perform its obligations under
the Seller Transaction Agreements, the execution, delivery and performance by
Seller of the Seller Transaction Agreements do not and will not:

(i) violate or conflict with the certificate or articles of incorporation or
bylaws or similar organizational documents of Seller, Company or Company
Subsidiary;

(ii) conflict with or violate any Law or Order applicable to Seller, Company,
Company Subsidiary or the Business; or

(iii) result in any breach of, or constitute a default under, or give to any
Person any right to terminate, amend, accelerate or cancel, or result in the
creation of any Lien (other than a Permitted Lien) on the Shares or any Asset
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument to which Company or Company
Subsidiary is a party or by which the Shares or the Assets are bound.

Section 4.05 Consents and Approvals. The execution, delivery and performance by
Seller of the Seller Transaction Agreements do not and will not require any
Consent, waiver or other action by, or any filing with or notification to, any
Government Authority by or with respect to Seller, Company or Company
Subsidiary, except (a) in connection with applicable filing, notification,
waiting period or approval requirements under applicable Antitrust Laws,
(b) where the failure to obtain such Consent or waiver, or to take such action
or make such filing or notification would not reasonably be expected to have a
Company Material Adverse Effect and would not impair or delay the ability of
Seller to consummate the Seller Transactions or otherwise perform its
obligations under the Seller Transaction Agreements, in each case, in any
material respect, and (c) as may be necessary as a result of any facts or
circumstances relating to Buyer, Parent or their respective Affiliates. Since
January 1, 2012, all actions of Company or Company Subsidiary that have required
the approval of the respective board of directors or stockholder of Company or
Company Subsidiary have been so approved or ratified as of the Agreement Date.

Section 4.06 Financial Information; Absence of Undisclosed Liabilities.

(a) Schedule 4.06(a) sets forth: (i) the audited (A) combined statements of
operations and (B) combined statements of cash flows of Company for the fiscal
years ended December 31, 2012, 2013 and 2014; (ii) the audited combined balance
sheets of Company as of December 31, 2013 and 2014 (the financial statements
referred to in the foregoing clauses (i) and (ii) are collectively referred to
herein as the “Audited Financial Statements”); (iii) the unaudited (A) combined
balance sheet of Company as of June 30, 2015 (the “Balance Sheet”) and
(B) combined statement of operations and statement of cash flows of Company for
the six (6) month period ended June 30, 2015 (the financial statements referred
to in the foregoing clause (iv) are collectively referred to herein as the
“Unaudited Interim Financial Statements”, and collectively with the financial
statements referred to in the foregoing clause (iii) and the Audited Financial
Statements, the “Financial Statements”); and (v) any management letters relating
to the Audited Financial Statements received by Company from the auditors. The
Financial Statements have been prepared on a carve out basis in accordance with
GAAP and in all material respects present fairly in accordance with GAAP the
combined financial condition and the combined statements of operations and cash
flows of Company as of their respective dates and for their respective periods,
except (I) as may be stated in the notes thereto and (II) that the Unaudited
Interim Financial Statements are subject to year-end adjustments and lack the
footnote disclosure otherwise required by GAAP.

 

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(b) Other than (i) as set forth in the Financial Statements, (ii) Liabilities
for Taxes, (iii) Liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 2014 and (iv) Liabilities that
would not reasonably be expected to have a Company Material Adverse Effect, to
the Knowledge of Seller, Company and Company Subsidiary do not have any
Liabilities including, but not limited to, Liabilities for violation of Laws,
Liabilities for overbilling Government Programs or third party payors for
Services, breach of contract or tort, that are required to be reflected on a
balance sheet prepared in accordance with GAAP.

Section 4.07 Absence of Certain Changes or Events. Except as contemplated by the
Transaction Agreements or in connection with the preparation for or the
consummation of the Transactions, during the period from December 31, 2014
through the Agreement Date, (a) Company and Company Subsidiary each has
conducted the Business, and CPS has conducted its business, in all material
respects in the ordinary course of business consistent with past practice,
(b) as of the Agreement Date, there has not been any Company Material Adverse
Effect or any event that would materially impair or delay the ability of Seller
to consummate the Seller Transactions or otherwise perform its obligations under
the Seller Transaction Agreements and (c) except as set forth on Schedule 4.07,
neither Company nor Company Subsidiary has taken any of the actions specified in
Sections 6.01(a)(i) – (xii) and CPS has not taken any of the actions specified
in Sections 6.01(a)(i), (v), (vii), (x), (xi) and (xii).

Section 4.08 Absence of Litigation. As of the Agreement Date, no Actions are
pending or, to the Knowledge of Seller, threatened against Company or Company
Subsidiary that, if decided adversely, would reasonably be expected to have a
Company Material Adverse Effect or would prevent or materially impair or delay
the ability of Seller to consummate the Seller Transactions. Schedule 4.08
includes a true and correct listing of all Actions that were settled or
adjudicated with respect to Company or Company Subsidiary since January 1, 2012.

Section 4.09 Compliance with Laws. Company and Company Subsidiary each is and,
since January 1, 2012, has been in compliance with any and all Laws applicable
to Company and Company Subsidiary, as applicable, except as would not reasonably
be expected to have a Company Material Adverse Effect. No investigation or
review by any Government Authority with respect to Company or Company Subsidiary
is pending or, to the Knowledge of Seller, threatened, nor has any Government
Authority indicated in writing an intention to conduct the same, in each case
other than those the outcome of which would not reasonably be expected to have a
Company Material Adverse Effect. None of the representations and warranties
contained in this Section 4.09 shall be deemed to relate to permits and related
matters (which are governed by Section 4.10), compliance with healthcare laws
and related matters (which are governed by Section 4.11), ethical practices and
related matters (which are governed by Section 4.12), intellectual property and
related matters (which are governed by Section 4.13), environmental and related
matters (which are governed by Section 4.14), employment, employee benefits and
related matters (which are governed by Section 4.16), taxes and related matters
(which are governed by Section 4.17) and the Real Properties and related matters
(which are governed by Section 4.18).

Section 4.10 Permits.

(a) Each of Company, Company Subsidiary, CPS, each clinical laboratory owned,
operated or managed by Company and Company Subsidiary and, as applicable, their
respective employees, owns, holds or possesses all Permits, any license,
certificate, approval, consent, permission, clearance, exemption, registration,
qualification, accreditation or authorization issued, granted or given by any
Government Authority, any provider agreement, and/or any accreditation by a
private accreditation organization, that are necessary to entitle Company,
Company Subsidiary, CPS and each clinical laboratory owned, operated or managed
by Company and Company Subsidiary to own or lease, operate and use its Assets
and to carry on and conduct the Business substantially as currently conducted
(collectively, the “Business Permits”). Schedule 4.10(a) sets forth a list of
each Business Permit held as of the Agreement Date that is necessary to entitle
Company, Company Subsidiary, CPS and each clinical laboratory owned, operated or
managed by Company and Company Subsidiary to own, lease, operate and use its
Assets and to carry on and conduct the Business substantially as currently
conducted as of the Agreement Date. Each of the

 

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Business Permits is valid, subsisting and in full force and effect. Each of
Company, Company Subsidiary, CPS and each clinical laboratory owned, operated or
managed by Company and Company Subsidiary and, as applicable, their respective
employees, has fulfilled and performed its obligations in all material respects
under each of the Business Permits. No written or, to the Knowledge of Seller,
oral notice of cancellation, of default or of any material dispute concerning
any Business Permit, or of any event, condition or state of facts described in
the preceding clause, has been received by Company, Company Subsidiary, CPS or a
clinical laboratory owned, operated or managed by Company and Company Subsidiary
or, as applicable, their respective employees. To the Knowledge of Seller, no
notice of cancellation, of default or of any material dispute concerning any
Business Permit is threatened.

(b) Each of Company, Company Subsidiary, and each clinical laboratory owned,
operated or managed by Company and Company Subsidiary, has not contracted with
any pathologists for the performance of activities related to the Seller Lab
Testing Services or the Business other than through the contractual arrangements
of Company Subsidiary with CPS. CPS and its officers, directors and employees,
have obtained all required approvals, registrations and authorizations from,
have made all appropriate applications and other submissions to, and have
prepared and maintained all records, studies and other documentation needed to
satisfy and demonstrate compliance in all material respects with the
requirements of, any Government Authorities necessary for operation of its
present business activities relating to the Seller Lab Testing Services or the
Business in compliance with all applicable Laws.

(c) Company, Company Subsidiary and CPS have not made any false statement in, or
material omission from, the applications, approvals, reports or other
submissions to any Government Authorities or in or from any other records and
documentation prepared or maintained to comply with the requirements of any
Government Authorities relating to the Seller Lab Testing Services or the
Business.

(d) Company, Company Subsidiary and CPS are in compliance, in all material
respects, with all applicable regulations and requirements of Government
Authorities relating to the Seller Lab Testing Services, including any
requirements for investigating customer complaints and inquiries.

(e) Schedule 4.10(e) sets forth a list of all authorizations, consents,
approvals, franchises, licenses and Permits required by any Person (other than a
Government Authority) that are necessary to entitle Company, Company Subsidiary,
CPS and each clinical laboratory owned, operated or managed by Company and
Company Subsidiary to operate the Business as presently operated (for the
purposes of this Section 4.10 only, the “Other Person Authorizations”). All of
the Other Person Authorizations have been duly issued or obtained and are in
full force and effect, and Company, Company Subsidiary, CPS and each clinical
laboratory owned, operated or managed by Company and Company Subsidiary are in
compliance in all material respects with the terms of the Other Person
Authorizations. Company, Company Subsidiary, CPS and each clinical laboratory
owned, operated or managed by Company and Company Subsidiary have no reason to
believe that the Other Person Authorizations will not be renewed by the
appropriate Person in the ordinary course.

(f) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in Section 4.10 are the sole and
exclusive representations and warranties made regarding Business Permits and
related matters.

Section 4.11 Compliance with Healthcare Laws.

(a) Each of Company, Company Subsidiary and CPS is, and has been since
September 30, 2009, in compliance in all material respects with all applicable
Healthcare Laws.

(b) None of Company, Company Subsidiary, CPS or their respective officers,
directors or managing employees or, to the Knowledge of Seller, their respective
non-managing employees, contractors or agents, or individuals with direct or
indirect ownership interests (or any combination thereof) of 5% or more in
Company, Company Subsidiary or CPS (as those terms are defined in 42 C.F.R. §
1001.1001): (i) have engaged in any

 

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activities that are prohibited under, or would be cause for civil or criminal
penalties or mandatory or permissive exclusion from, any Federal Health Care
Program under Sections 1128, 1128A, 1128B, 1128G or 1877 of the SSA,
Section 3729 of Title 31 of the United States Code, or related state or local
statutes, and including knowingly and willfully offering, paying, soliciting or
receiving any remuneration (including any kickback or bribe), directly or
indirectly, overtly or covertly, in cash or in kind in return for, or to induce,
the purchase, lease or order, or the arranging for or recommending of the
purchase, lease or order, of any good, facility, item or service for which
payment may be made in whole or in part under any such program; (ii) have had a
civil monetary penalty assessed against them under Section 1128A of the SSA, or
proceedings initiated to impose such a penalty; (iii) have been excluded from
participation under any Federal Health Care Program under Section 1128 of the
SSA or otherwise suspended or debarred from contracting with the federal
government, or had proceedings initiated to impose such exclusion or debarment;
or (iv) have been charged or convicted (as defined in 42 C.F.R. § 1001.2) of any
of the categories of offenses described in Sections 1128(a) or 1128(b)(1),
(b)(2) or (b)(3) of the SSA.

(c) Except as set forth on Schedule 4.11(c), each of Company, Company
Subsidiary, CPS and each clinical laboratory owned, operated or managed by
Company and Company Subsidiary, is not currently, nor has it been in the past:
(A) subject to a corporate integrity agreement, deferred prosecution agreement,
consent decree, settlement agreement or similar agreements or orders mandating
or prohibiting future or past activities; (B) filing (or planning to file) a
disclosure pursuant to the Self-Referral Disclosure Protocol or OIG’s Self
Disclosure Protocol; (C) to the Knowledge of Seller, under investigation by the
Department of Justice, the Office of Inspector General of the U.S. Department of
Health and Human Services (“OIG”), the Centers for Medicare & Medicaid Services
(“CMS”), any state Attorney General, state Medicaid agency, or qui tam relator
regarding the conduct of its business, including but not limited to any
violation or alleged violation of any Healthcare Law (“Health Care
Investigations”); (D) on “pre-payment review” by any Medicare administrative
contractor or by CMS; (E) party to an arrangement or contract with a referral
source for which compensation does not reflect fair market value for services
actually rendered consistent with the respective obligations of Company, Company
Subsidiary, CPS and, solely in connection with such arrangement or contract, the
other party thereto under the Healthcare Laws; (F) a defendant in any qui tam or
civil or criminal False Claims Act litigation; (G) excluded from participation
under any Federal Health Care Program under Section 1128 of the SSA; (H) in
receipt of a civil investigative demand or subpoena from the Department of
Justice or any OIG written or, to the Knowledge of Seller, threatened inquiry,
subpoena or demand; or (I) suspended or debarred from contracting with the
federal government.

(d) All contracts and other consulting or financial arrangements and
relationships entered into by Company or Company Subsidiary with customers,
vendors, suppliers, employees and/or contractors comply in all material respects
with the Stark Law (42 U.S.C. § 1395nn) and all applicable regulations
promulgated thereunder. The foregoing representation and warranty shall
similarly be true and correct as it relates to any prohibition under any similar
applicable state “self-referral” laws.

(e) Each of Company and Company Subsidiary operates the Business in compliance
in all material respects with all applicable Laws relating to medical records
and medical information privacy, including regulations issued by the
U.S. Department of Health and Human Services pursuant to the Health Insurance
Portability and Accountability Act of 1996, as amended (“HIPAA”), addressing the
privacy and security of certain health-related information that are promulgated
at 45 C.F.R. Parts 160, 162 and 164 (the “HIPAA Regulations”) (collectively, the
“Privacy Laws”). To the Knowledge of Seller, neither Company nor Company
Subsidiary has received any written inquiries from the Office of Civil Rights of
the U.S. Department of Health and Human Services, CMS, the Federal Trade
Commission, any state Attorney General or any other Government Authority
regarding Company’s or Company Subsidiary’s compliance with the Privacy Laws. To
the Knowledge of Seller, each of Company and Company Subsidiary has complied
with the terms of Business Associate Agreements (as defined in the HIPAA
Regulations) where in effect in all material respects. To the Knowledge of
Seller, there has been no unauthorized use or disclosure of Protected Health
Information (as defined in the HIPAA Regulations) by Company or Company
Subsidiary.

 

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(f) Each of Company, Company Subsidiary, CPS and as applicable each clinical
laboratory owned, operated or managed by Company and Company Subsidiary, has the
requisite provider agreement, provider number or other Governmental Permit to
bill any Federal Health Care Program or non-governmental third party payor
program from which Company or Company Subsidiary receives reimbursement for
Seller Lab Testing Services (collectively, “Seller Payor Programs”). Each of
Company, Company Subsidiary and CPS is in compliance in all material respects
with applicable conditions of participation in Seller Payor Programs. Except as
set forth on Schedule 4.11, Company’s, Company Subsidiary’s and CPS’ claims,
billing, refunds, overpayments, adjustments and documentation practices, and to
the Knowledge of Seller, those of Company’s, Company Subsidiary’s or CPS’
contractors or agents, are, and have been since September 30, 2009, in
compliance in all material respects with applicable requirements of Seller Payor
Programs. There is no investigation, audit, claim review, suit, inquiry,
proceeding or other action pending, or to the Knowledge of Seller, threatened,
which could result in a revocation, suspension, termination, probation,
restriction, limitation, or non-renewal of any Seller Payor Program provider
number, result in Company’s, Company Subsidiary’s or CPS’ exclusion from any
Seller Payor Program, or result in a recoupment or refund of payments made to
Company, Company Subsidiary or CPS by any Seller Payor Program (other than
routine refunds or denials of claims undertaken in the ordinary course of
business).

(g) Each of Company and Company Subsidiary has in place a compliance program
that adheres to the U.S. federal sentencing guidelines for an effective
compliance program and includes the recommendations made in the OIG Compliance
Program Guidance for Clinical Laboratories published at 63 Fed. Reg. 45076
(August 24, 1998) in all material respects.

(h) Company, Company Subsidiary and CPS have furnished to Buyer correct and
complete copies, or if agreed to by Buyer in its sole discretion, summaries of,
since January 1, 2011 all (1) material communications of Company, Company
Subsidiary and CPS with any Government Authority with respect to Healthcare Laws
and (2) written materials presented to any compliance oversight committee of the
Company, Company Subsidiary and CPS and the corresponding minutes of any such
meetings.

(i) To the extent that Company, Company Subsidiary, or CPS is participating in
any research or clinical trials project, such research or clinical trials
project is performed in compliance in all material respects with applicable
Healthcare Laws.

(j) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in Sections 4.08 and 4.11 are the
sole and exclusive representations and warranties made regarding compliance with
Healthcare Laws, health care investigations, compliance with Privacy Laws,
reimbursement compliance and other related matters.

Section 4.12 Ethical Practices.

(a) Since January 1, 2012, neither Company, Company Subsidiary nor, to the
Knowledge of Seller, any director, manager, officer, agent, consultant,
distributor, employee or any other person acting for, or on behalf of, Company
or Company Subsidiary has, directly or indirectly: (i) violated or is in
violation in any material respect of the U.S. Foreign Corrupt Practices Act (the
“FCPA”) or any other Laws regarding illegal payments and gratuities
(collectively with the FCPA, the “Improper Payment Laws”) in any jurisdiction;
(ii) made, undertaken, offered to make, promised to make or authorized the
payment or giving of any bribe, rebate, payoff, influence payment, kickback or
other payment or gift of money or anything of value (including meals or
entertainment), to any officer, employee or ceremonial office holder of any
Government Authority or instrumentality thereof, any political party or
supra-national organization (such as the United Nations), any political
candidate, any royal family member or any other person who is connected or
associated personally with any of the foregoing that is prohibited under any
applicable Improper Payment Law or otherwise for the purpose of influencing any
act or decision of such payee in his official capacity, inducing such payee to
do or omit to do any act in violation of his lawful duty, securing any improper
advantage or inducing such payee to use his

 

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influence with a Government Authority or instrumentality thereof to affect or
influence any act or decision of such Government Authority or instrumentality
(“Prohibited Payments”); (iii) to the Knowledge of Seller, been subject to any
investigation by any Government Authority with regard to any actual or alleged
Prohibited Payment (“Prohibited Payment Investigations”); (iv) used funds or
other assets, or made any promise or undertaking in such regard, for the
establishment or maintenance of a secret or unrecorded fund (a “Prohibited
Fund”); (v) made any false or fictitious entries in any books or records of
Company or Company Subsidiary relating to any Prohibited Payment or Prohibited
Fund; (vi) received any unlawful discounts or rebates in violation of any Laws
relating to antitrust or competition; or (vii) breached or waived any code of
ethics or similar foreign, federal or state policy regarding business conduct.

(b) Company and Company Subsidiary have established reasonable internal controls
and procedures intended to ensure compliance with Improper Payment Laws.

(c) Since January 1, 2012, the operations of Company and Company Subsidiary are
and have been conducted in compliance in all material respects with all
anti-money laundering Laws and all applicable financial record keeping and
reporting requirements, rules, regulations and guidelines applicable to Company
and Company Subsidiary (collectively, “Money Laundering Laws”), and no Action
involving Company or Company Subsidiary with respect to Money Laundering Laws is
pending and, to the Knowledge of Seller, no such Actions are threatened.

(d) Neither Company, Company Subsidiary nor, to the Knowledge of Seller, any of
their respective directors, managers, officers, agents, distributors, employees
or nor, to the Knowledge of Seller, any other persons acting on behalf of any of
the foregoing: (i) is, or is owned or Controlled by, a Prohibited Person;
(ii) directly or indirectly, has conducted, conducts or is otherwise involved
with any business with or involving any Government Authority (or any
sub-division thereof), or any person, entity or project, targeted by, or located
in any country that is the subject of, any of the sanctions administered by OFAC
or any other equivalent sanctions or measures imposed by the European Union, the
United Nations, the United States or any other relevant Government Authority
(collectively, “Sanctions”); (iii) directly or indirectly supports or
facilitates, or plans to support or facilitate or otherwise become involved
with, any such person, Government Authority, entity or project; or (iv) is or
ever has been in violation of or subject to an investigation relating to
Sanctions.

(e) Since January 1, 2012, to the Knowledge of Seller, neither Company nor
Company Subsidiary is a party to any contract or bid with, and has not conducted
business directly or indirectly with, any Prohibited Persons.

(f) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in this Section 4.12 are the sole
and exclusive representations and warranties made regarding ethical practices,
Improper Payment Laws, Money Laundering Laws, Sanctions, Prohibited Persons and
other related matters.

Section 4.13 Intellectual Property.

(a) Except as set forth on Schedule 4.13(a), the Assets, the Company
Intellectual Property, the Company Technology, the rights to be granted pursuant
to the MultiOmyx License Agreement, the Trademark License Agreement and the
rights of Buyer pursuant to Section 7.02, and the rights of Buyer pursuant to
the other Transaction Agreements constitute all material Intellectual Property
owned by Seller and its Affiliates (including, for clarity, Company and Company
Subsidiary) necessary to the operation of the Business in all material respects
as it is conducted on the Agreement Date, assuming receipt of all relevant
Consents relating to the matters set forth or contemplated by Section 4.05.

(b) To the Knowledge of Seller, the operation of the Business by Company and
Company Subsidiary as currently conducted does not infringe upon or
misappropriate the Intellectual Property of any third party in a manner that
would reasonably be expected to have a Company Material Adverse Effect.

 

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(c) Except as set forth on Schedule 4.13(c), neither Company nor Company
Subsidiary has received any written claim or notice from any Person during the
one (1)-year period ending on the Agreement Date alleging that the operation of
the Business by Company or Company Subsidiary infringes upon or misappropriates
any Intellectual Property of any third party which, if proven or established,
would reasonably be expected to have a Company Material Adverse Effect. Except
as set forth on Schedule 4.13(c), as of the Agreement Date, there are no
infringement Actions pending or, to the Knowledge of Seller, threatened in
writing against Company or Company Subsidiary alleging that the operation of the
Business by Company or Company Subsidiary infringes upon or misappropriates any
Intellectual Property of any third party which, if proven or established, would
reasonably be expected to have a Company Material Adverse Effect.

(d) Except as set forth on Schedule 4.13(d), to the Knowledge of Seller, as of
the Agreement Date no Person is engaging in any activity that infringes in any
material respect upon the Company Intellectual Property or the Company
Technology, except for any such infringements that do not materially impair the
ability of Company or Company Subsidiary to operate the Business as conducted on
the Agreement Date or that would not reasonably be expected to have a Company
Material Adverse Effect.

(e) Schedule 4.13(e) sets forth a true and complete list of:

(i) all Company Registered IP, including applications therefor, as of the
Agreement Date;

(ii) all material licenses, sublicenses, reseller, distribution, and other
agreements or arrangements in accordance with which any other Person is given
the exclusive right by Company or Company Subsidiary to have access to, resell,
distribute, or use Company or Company Subsidiary owned Intellectual Property or
an exclusive right to exercise any other right with regard thereto; and

(iii) all material licenses and other agreements under which Company or Company
Subsidiary has been granted a license or any other right to any Company Licensed
Intellectual Property (other than license agreements for commercially available
third party Intellectual Property, Technology, or Software that is otherwise
commercially available) where such Company or Company licensed Intellectual
Property, Technology, or Software is embedded in Company’s or Company
Subsidiary’s products (“Company In-Licenses”).

(f) Schedule 4.13(f) sets forth a true and complete list of all software
developed by Company or Company Subsidiary that, as of the Agreement Date, is
(i) included among the Company Technology, (ii) embedded in a product of the
Business and (iii) material to the Business. Company and Company Subsidiary each
maintains reasonable and appropriate security and data privacy procedures
intended to safeguard the source code of such software from public disclosure.

(g) Company and Company Subsidiary, as applicable, owns free and clear of Liens
and/or other encumbrances all Company Intellectual Property.

(h) To the Knowledge of Seller, neither Company nor Company Subsidiary is in
material violation of any Company In-License.

(i) Neither Company nor Company Subsidiary has received during the one (1)-year
period ending on the Agreement Date written notice of any claims, challenging
the validity, effectiveness or ownership by Company or Company Subsidiary, as
applicable, of any Company Intellectual Property.

(j) Company and Company Subsidiary have each secured from all current and former
employees, consultants, and contractors of Company or Company Subsidiary, as
applicable, who have created any material portion of, or otherwise have any
rights in or to, any material Company Intellectual Property or product, Company
Technology, or Service, assignments or licenses to Company or Company Subsidiary
of any such employees’, consultants’ and contractors’ contribution or rights
therein.

 

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(k) To the Knowledge of Seller, all employees and third parties with whom
Company or Company Subsidiary have shared the source code to any Software owned
by Company is obligated to treat as confidential such source code.

(l) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in this Section 4.13 are the sole
and exclusive representations and warranties made regarding Intellectual
Property, Technology and Software, including the Company Intellectual Property
and the Company Technology.

Section 4.14 Environmental Matters.

(a) Except as disclosed on Schedule 4.14(a):

(i) there are no Actions pending or, to the Knowledge of Seller, threatened in
writing, against Company or Company Subsidiary with respect to the Business or,
to the Knowledge of Seller, the Real Assets, alleging that Company or Company
Subsidiary is violating, or asserting Liability of Company or Company Subsidiary
under, Environmental Law; and

(ii) Company and Company Subsidiary each is currently in compliance in all
material respects with all applicable Environmental Laws, including obtaining
and maintaining in effect all Environmental Permits required by applicable
Environmental Laws. Company and Company Subsidiary each is currently in
compliance, in all material respects, with all state and federal regulations
with respect to the disposal of medical waste and Hazardous Materials, including
but not limited to xylene, in the laboratory.

(b) There are no claims, Liabilities causes of action, investigations,
litigation, administrative proceedings, pending or, to the Knowledge of Seller,
threatened against Company or Company Subsidiary, or judgments or orders
relating to any Hazardous Materials (collectively called “Environmental Claims”)
issued against Company or Company Subsidiary and relating to any Real Properties
currently or formerly owned, leased or otherwise used by Company or Company
Subsidiary. Neither Company nor Company Subsidiary has assumed any Liability of
any Person for cleanup in connection with any Environmental Claim.

(c) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in this Section 4.14 are the sole
and exclusive representations and warranties made regarding environmental,
health or safety matters, Environmental Laws, Environmental Claims,
Environmental Permits or Hazardous Materials.

Section 4.15 Contracts; Customers; Suppliers.

(a) Except as set forth in Schedule 4.15(a) hereto, as of the Agreement Date
neither Company nor Company Subsidiary is bound by or a party to any written
contracts of the following type:

(i) any contract under which performance by Company or Company Subsidiary is
likely to involve payment or receipt by Company or Company Subsidiary of
consideration in excess of $200,000 per annum;

(ii) any contract with providers of medical services (including, but not limited
to, any contracted pathologists or other medical professionals), who provide
services to Company, Company Subsidiary or CPS, other than any contract with a
managed care organization or insurance payor;

(iii) any contract for future capital expenditures by Company or Company
Subsidiary in excess of $500,000;

(iv) any contract relating to (A) the borrowing of money, (B) the guarantee of
any payment obligation, (C) the deferred payment of the purchase price of any
Assets or (D) any bonding or surety agreement

 

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or arrangement, in each case, having an outstanding principal amount or
involving the expenditure by Company or Company Subsidiary, as applicable, in
excess of $500,000;

(v) any shareholder, partnership, joint venture, limited liability company
operating or similar entity governance contract;

(vi) any contract for the sale of any Assets outside the ordinary course of
business that in the aggregate have a value greater than $500,000;

(vii) any contract that limits in any material respect Company’s or Company
Subsidiary’s freedom to compete freely in any line of business, with any Person
or in any geographic area; or

(viii) any contract with an Affiliate of Company relating to the provision of
funds, real property, goods or services by or to Company, in each case that will
survive the Closing.

The contracts set forth in Schedule 4.15(a) are collectively referred to herein
as the “Material Contracts”.

(b) Schedule 4.15(b) sets forth the Material Contracts pursuant to which Company
or Company Subsidiary is required to provide written notice to, or obtain a
consent from, the other party thereto as a result of the consummation of the
Transactions. Each Material Contract is legal, valid, binding and in full force
and effect with respect to Company, Company Subsidiary and, to the Knowledge of
Seller, each other party to such Material Contract, is enforceable against
Company, Company Subsidiary, and, to the Knowledge of Seller, each other party
to such Material Contract in accordance with its terms, subject, in each case,
to the Bankruptcy and Equity Exception, and neither Company nor Company
Subsidiary has been notified or advised in writing by any party thereto of such
party’s intention or desire to terminate any such Material Contract. None of
Company, Company Subsidiary or, to the Knowledge of Seller, any other party to a
Material Contract is in default under or breach of a Material Contract that
could reasonably be expected to have a Company Material Adverse Effect. Company
and Company Subsidiary have made available to Buyer true and complete copies of
each Material Contract.

(c) Schedule 4.15(c) lists, as of the Agreement Date, each Material Customer.
Except as set forth on Schedule 4.15(c), no Material Customer has canceled,
terminated or made any written threat to Company or Company Subsidiary during
the twelve (12) month period before the Agreement Date to (i) cancel or
otherwise terminate its relationship with Company or Company Subsidiary or
(ii) materially and adversely change the quantity, pricing or other material
terms applicable to its sale of products or services to Company or Company
Subsidiary or its direct or indirect purchase of Services from Company or
Company Subsidiary.

(d) Schedule 4.15(d) lists, as of the Agreement Date, each Material Supplier.
Except as otherwise set forth in Schedule 4.15(d) hereto, no Material Supplier
has canceled, terminated or made any written threat to Company or Company
Subsidiary to during the twelve (12) month period before the Agreement Date,
(i) cancel or otherwise terminate its relationship with Company or Company
Subsidiary or (ii) materially and adversely change the quantity, pricing or
other material terms applicable to its sale of products or services to Company
or Company Subsidiary or its direct or indirect purchase of Services from
Company or Company Subsidiary.

(e) Schedule 4.15(e) lists, as of the Agreement Date, the ten (10) largest
managed care providers and insurance companies of the Business (measured by the
aggregate amount of reimbursements for services paid to Company and Company
Subsidiary for the fiscal year ended December 31, 2014). Except as otherwise set
forth in Schedule 4.15(e) hereto, no such party has canceled, terminated or made
any written threat to Company or Company Subsidiary during the twelve (12) month
period before the Agreement Date to (i) cancel or otherwise terminate its
relationship with Company or Company Subsidiary or (ii) materially and adversely
change the quantity, pricing or other material terms applicable to its sale of
products or services to Company or Company Subsidiary or its direct or indirect
purchase of Services from Company or Company Subsidiary.

 

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Section 4.16 Employment and Employee Benefits Matters.

(a) As of the Agreement Date, Seller has provided to Buyer a true and accurate
list of the employees of Company and Company Subsidiary who are employed
primarily in connection with the Business (collectively, the “Business
Employees”), in each case, identifying names, job title, job location, hourly
wage rate or salary (including, where applicable, current commission or bonus
eligibility), date of hire and employer.

(b) Except as set forth on Schedule 4.16(b), as of the Agreement Date neither
Company nor Company Subsidiary is a party to any employment contract or
retention, severance or similar agreement with any Business Employee.

(c) Neither Company nor Company Subsidiary is a party to any labor, trade union
or collective bargaining agreements, memoranda of understanding or other labor
agreements or contracts with any union, labor organization, works council or
other employee representative group. As of the Agreement Date, there are no
pending or, to the Knowledge of Seller, threatened union organizing drives,
material arbitrations, material grievances, labor disputes, strikes, lockouts,
slowdowns or work stoppages against Company or Company Subsidiary.

(d) Schedule 4.16(d) lists, as of the Agreement Date, each Employee Plan,
separately identifying those that are Business Plans. Other than the Business
Plans, no Employee Plans are sponsored by Company or Company Subsidiary. True,
correct and complete copies of (or, if unwritten, accurate descriptions of) all
Business Plans have also been furnished to Buyer.

(e) As of the Agreement Date, except as set forth on Schedule 4.16(e), or except
to the extent such Action, examination or audit would not reasonably be expected
to result in a material Liability to Buyer or its Affiliates: (i) no Action is
pending or, to the Knowledge of Seller, threatened in writing relating to an
Employee Plan; and (ii) to the Knowledge of Seller, no Employee Plan has during
the three-year period before the Agreement Date been the subject of an
examination or audit by a Government Authority.

(f) Except as otherwise set forth in Schedule 4.16(f),

(i) Neither Buyer nor its ERISA Affiliates (including, after the Closing,
Company and Company Subsidiary), will by reason of the Transactions have any
Liability after the Closing arising from or under (i) any “defined benefit plan”
(as defined in Section 3(35) of ERISA) subject to Title IV of ERISA that is or
has been maintained, administered or contributed to by Seller or any ERISA
Affiliate of Company or Company Subsidiary, or (ii) any multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) subject to ERISA with respect to which
Seller or any ERISA Affiliate of Company or Company Subsidiary contributed or
was required to contribute. “ERISA Affiliate” of an entity means any trade or
business, whether or not incorporated, that together with such entity would be
deemed to be a “single employer” within the meaning of Section 4001(b)(1) of
ERISA or Section 414 of the Code;

(ii) During the three-year period before the Agreement Date, each Business Plan
has been administered in all material respects in compliance with its terms and
all applicable Laws, including, without limitation, if applicable, ERISA and the
Code;

(iii) Each of the Employee Plans that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination or may rely on
an opinion letter from the IRS regarding such qualified status, and to the
Knowledge of Seller there are no circumstances that will result in the
revocation of any such determination letter;

(iv) There are no actions, suits or claims pending (other than routine claims
for benefits) or, to the Knowledge of Seller, threatened against, or with
respect to, (A) any Employee Plan (other than a Business Plan)

 

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that could reasonably be expected to be a material Liability of Buyer or its
Affiliates after the Closing or (B) any of the Business Plans;

(v) During the three-year period before the Agreement Date, Company and Company
Subsidiary each has complied in all material respects with (A) the health care
continuation requirements of Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended (“COBRA”), (B) the requirements of the Family Medical Leave
Act of 1993, as amended, and (C) the requirements of the Health Insurance
Portability and Accountability Act of 1996, as amended, as well as all similar
provisions of state law applicable to Company’s and Company Subsidiary’s
employees;

(vi) During the three-year period before the Agreement Date, none of the
Employee Plans nor any trust created thereunder or with respect thereto has
engaged in any “prohibited transaction” or “party-in-interest transaction” as
such terms are defined in Section 4975 of the Code and Section 406 of ERISA
which could subject either Company or Company Subsidiary to a material Tax or
penalty on prohibited transactions or party-in-interest transactions pursuant to
Section 4975 of the Code or Section 502(i) of ERISA;

(vii) No Business Plan provides medical, health, or life insurance or other
welfare type benefits for current or future retired or terminated employees,
their spouses or their dependents;

(viii) Except as set forth in Schedule 4.16(f)(viii), neither the execution and
delivery of this Agreement nor the consummation of any or all of the
Transactions contemplated hereby will: (A) entitle any current or former
employee of Company or Company Subsidiary to severance pay, a change in control
payment, unemployment compensation or any other compensatory payment,
(B) accelerate the time of payment or vesting or increase the amount of any
compensation due to any such employee or former employee, or (C) directly or
indirectly result in any payment made to or on behalf of any Person to
constitute a “parachute payment” within the meaning of Section 280G of the Code,
that in any case of (A), (B) or (C) would be a Liability of Company, Company
Subsidiary or Buyer.

(g) Labor.

(i) Company and Company Subsidiary each (i) complies in all material respects
with all applicable Laws with respect to employment, employment practices, terms
and conditions of employment, hiring, termination of employment, affirmative
action, occupational safety and health, wages and hours, in each case with
respect to its employees; (ii) has withheld and reported in all material
respects all amounts required by Laws or by contract to be withheld and reported
with respect to wages, salaries and other payments to its employees; (iii) is
not liable in any material respect for any arrears of wages or any Taxes or any
penalty for failure to comply with the Laws applicable to the foregoing; (iv) is
not liable for any material payment to any trust or other fund governed by or
maintained by or on behalf of any Government Authority with respect to
unemployment compensation benefits, social security or other benefits or
obligations for its employees (other than routine payments to be made in the
normal course of business and consistent with past practice); and (v) has no
leased employees.

(ii) As of the Agreement Date, each of Company and Company Subsidiary is, and
during the three-year period before the Agreement Date each of Company and
Company Subsidiary has been, in compliance in all material respects with all
applicable Laws and regulations of the United States regarding immigration
and/or employment of non-citizen workers. As of the Agreement Date, neither
Company nor Company Subsidiary has been notified in writing of any pending or,
to the Knowledge of Seller, threatened investigation by any branch or department
of U.S. Immigration and Customs Enforcement (“ICE”), or other federal agency
charged with administration and enforcement of federal immigration laws
concerning Company or Company Subsidiary.

(iii) During the three-year period before the Agreement Date, there have not
been any, (i) strikes, work stoppages, lockouts or other material labor disputes
between Company or Company Subsidiary and their

 

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respective employees, (ii) labor union grievances or, to the Knowledge of
Seller, organizational efforts, or (iii) unfair labor practice or labor
arbitration proceedings pending or, to the Knowledge of Seller, threatened.

(iv) To Company’s and Company Subsidiary’s knowledge, no Business Employees are,
or have been during the three-year period before the Agreement Date, in
violation of any term of any employment contract, non-competition agreement, or
any restrictive covenant to a former employer relating to the right of any such
employee to be employed by Company or Company Subsidiary because of the nature
of the business conducted by Company or Company Subsidiary or work performed by
the employee or to the use of trade secrets or proprietary information of
others.

(h) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in this Section 4.16 are the sole
and exclusive representations and warranties made regarding employees, Employee
Plans, Business Plans or other employment or employee benefits matters.

Section 4.17 Taxes.

(a) All material Tax Returns that are required to be filed by Company and
Company Subsidiary have been timely filed (taking into account requests for
extensions to file such Tax Returns), and all such Tax Returns are true,
correct, and complete in all material respects. All material Taxes owed by
Company and Company Subsidiary, whether or not shown as due on such Tax Returns,
have been timely paid in full, except for Taxes being contested in good faith by
appropriate proceedings and for which adequate provision therefor in accordance
with GAAP has been made in the Financial Statements or the books and records of
the Business.

(b) No deficiencies for any Taxes have been proposed, asserted or assessed in
writing by a Taxing Authority against Company or Company Subsidiary that are
still pending. There are no pending Tax audits, examinations or administrative
or judicial proceedings with respect to any Tax liability of Company or Company
Subsidiary. Neither Company nor Company Subsidiary has received from any Taxing
Authority (including jurisdictions where neither Company nor Company Subsidiary
has filed Tax Returns) any written notice indicating an intent to open an
unresolved Tax audit or other review with respect to Taxes owed by Company or
Company Subsidiary. There are no liens for Taxes upon the assets of either
Company or Company Subsidiary, except for liens for Taxes not yet due and
payable or liens for Taxes that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided on the books and
records of Company and Company Subsidiary, in each case in accordance with GAAP.

(c) No extensions of the period for assessment of any Taxes are in effect with
respect to Company or Company Subsidiary other than as the result of extending
the due date of a Tax Return. Neither Company nor Company Subsidiary has
executed any power of attorney with respect to any Tax owed by Company or
Company Subsidiary, other than powers of attorney that are no longer in force or
that will terminate on or before the Closing Date. No closing agreements,
private letter rulings, technical advice memoranda or similar agreements or
rulings relating to Taxes have been entered into or issued by any Taxing
Authority with or in respect of any Tax matter affecting Company or Company
Subsidiary that affect post-Closing Tax periods. Neither Company nor Company
Subsidiary is presently contesting any Tax of Company or Company Subsidiary
before any Government Authority.

(d) No material Tax Return filed by Company or Company Subsidiary is under
current examination by any Taxing Authority. No unresolved written claim has
been made within the last three (3) years by any Government Authority in a
jurisdiction where a Tax Return is not filed by Company or Company Subsidiary
that any such Tax Return is required to be filed or that Company, Company
Subsidiary or any item or asset of either is or may be subject to taxation by
that jurisdiction.

(e) There are no Liens for Taxes on the Assets other than Liens for Taxes not
yet due and payable or Taxes being contested in good faith.

 

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(f) All material Taxes required to be withheld, collected or deposited by
Company and Company Subsidiary have been timely withheld, collected or deposited
as the case may be, and to the extent required have been paid to the proper
Taxing Authority.

(g) Excluding agreements the principal subject matter of which is not Taxes,
neither Company nor Company Subsidiary is a party to, is bound by or has any
obligation under any Tax sharing, Tax indemnity agreement, or similar agreement,
in each case, that will not terminate on or before the Closing Date.

(h) Neither Company nor Company Subsidiary has entered into any “listed
transactions” as defined in Treasury Regulations Section 1.6011-4(b)(2).

(i) Neither Company nor Company Subsidiary will be required to include any item
of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of
any (i) change in method of accounting for a taxable period ending on or prior
to the Closing Date made by Company or Company Subsidiary prior to the Closing;
(ii) “closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign Tax Law) executed
by Company or Company Subsidiary prior to the Closing; (iii) election under
Section 108(i) of the Code made by Company or Company Subsidiary prior to the
Closing; (iv) installment sale or open transaction disposition made on or prior
to the Closing Date that does not result in the receipt of cash by Company or
Company Subsidiary in Tax periods (or portions thereof) beginning after the
Closing Date; (v) prepaid amount that is not reflected in Final Net Working
Capital received by Company or Company Subsidiary on or prior to the Closing
Date; or (vi) use of an improper method of accounting for any Tax Period (and
the portion of any Straddle Period) ending on or before the Closing Date by
Company or Company Subsidiary with respect to items of income or deductions
originally reflected by Company or Company Subsidiary in Tax Returns for Tax
periods ending on or before the Closing Date.

(j) Neither Company nor Company Subsidiary has been a “distributing corporation”
or a “controlled corporation” in connection with a transaction that was
purported or intended to be governed in whole or in part by Sections 355 or 361
of the Code within the past two (2) years.

(k) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in this Section 4.17 are the sole
and exclusive representations and warranties made regarding Taxes or other Tax
matters.

Section 4.18 Real Property.

(a) Schedule 4.18(a) sets forth a list, as of the Agreement Date, of the Owned
Real Property and Leased Real Property. Company and Company Subsidiary each has
good and valid title to all Owned Real Property as of the Agreement Date and
valid title to the leasehold estate (as lessee or sublessee) in all Leased Real
Property set forth on Schedule 4.18(a), in each case free and clear of all
Liens, except for Permitted Liens and except for:

(i) Liens that secure Debt that are reflected on the Balance Sheet;

(ii) zoning, building and other generally applicable land use restrictions and
applicable Law; and

(iii) Liens that have been placed by a third party on the fee title of real
property constituting Leased Real Property or real property over which Company
or Company Subsidiary have easement rights, and subordination or similar
agreements relating thereto.

(b) Except as set forth in Schedule 4.18(b), all leases and subleases for the
Leased Real Property under which Company or Company Subsidiary is a lessee or
sublessee are in full force and effect and are enforceable, in all material
respects, in accordance with their respective terms, subject to the Bankruptcy
and Equity

 

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Exception, and no written notices of material default under any such lease or
sublease have been sent or received by Company, Company Subsidiary or their
respective Affiliates during the period from January 1, 2012 through the
Agreement Date.

(c) None of Company, Company Subsidiary or their respective Affiliates has
received any written notice from any Government Authority asserting any
violation or alleged violation of applicable Laws with respect to any Real
Properties that remains uncured as of the Agreement Date and that would
reasonably be expected to have a Company Material Adverse Effect.

(d) None of Company, Company Subsidiary nor any of its Affiliates has received
written notice of (x) any condemnation, eminent domain or similar proceeding
affecting any portion of any of such buildings or premises or any access
thereto, and to the Knowledge of Seller no such proceedings are contemplated or
(y) any special assessment or pending improvement liens to be made by any
Government Authority which could materially and adversely affect any of such
buildings or premises.

(e) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Seller in this Section 4.18 are the sole
and exclusive representations and warranties made regarding the Owned Real
Property and Leased Real Property or any other Real Property matters.

Section 4.19 Management Continuity. Except as set forth in Schedule 4.19, to the
Knowledge of Seller, as of the Agreement Date none of the officers of Company or
Company Subsidiary, or pathologists providing services to Company, Company
Subsidiary or CPS, have notified Company or Company Subsidiary in writing of any
current intention, plan or desire to terminate their respective employment or
professional service agreements with Company, Company Subsidiary or CPS, or to
cease performing each of their respective duties as employees of Company,
Company Subsidiary or CPS or providing services to Company, Company Subsidiary
or CPS.

Section 4.20 Title; Equipment and Other Tangible Property. Company and Company
Subsidiary have legal and beneficial ownership of their Assets, as applicable,
free and clear of any and all Liens, except Permitted Liens. Company’s and
Company Subsidiary’s equipment, furniture, machinery, vehicles, structures,
fixtures and other tangible property included in its Assets (the “Tangible
Company Properties”) are generally suitable for the purposes for which they are
intended and in good operating condition and repair, in each case in all
material respects, except for ordinary wear and tear, and except for such
Tangible Company Properties as shall have been taken out of service on a
temporary basis for repairs or replacement consistent with Company’s and Company
Subsidiary’s prior practices.

Section 4.21 Banks. Schedule 4.21 attached hereto sets forth, with respect only
to accounts that will survive the Closing and that are exclusive to Company or
Company Subsidiary, (a) the name of each bank, trust company or other financial
institution and stock or other broker with which Company or Company Subsidiary
has an account, credit line or safe deposit box or vault; (b) the names of all
persons authorized to draw thereon or to have access to any safe deposit box or
vault; and (c) the names of all persons authorized by proxies, powers of
attorney or other like instrument to act on behalf of Company or Company
Subsidiary with respect to the accounts, credit lines, safe deposit boxes and
vaults. Except as otherwise set forth in Schedule 4.21 hereto, no such proxies,
powers of attorney or other like instruments are irrevocable.

Section 4.22 Insurance. Schedule 4.22(a) sets forth a complete and correct list
as of the Agreement Date of all Available Insurance Policies presently in effect
that relate to Company, Company Subsidiary or any of the Assets, all of which
have been in full force and effect from the date(s) set forth in
Schedule 4.22(a). Schedule 4.22(b) sets forth a complete list of Transferable
Insurance Policies acquired directly in respect of Company and Company
Subsidiary. As of the Agreement Date, no insurance carrier has informed Company
or Company Subsidiary in writing of its intention to cancel any such Available
Insurance Policies. Since January 1, 2012, all notices of claims required to
have been given by Company or Company Subsidiary to any insurance carrier with

 

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respect to the Available Insurance Policies have been timely and duly given, and
no insurance carrier has asserted in writing that any claim is not covered by
the applicable policy relating to such claim.

Section 4.23 Brokers. Except for fees and expenses of Leerink Partners LLC (the
“Seller Banker”), no broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission from Seller, Company, Company
Subsidiary or any of their respective Affiliates in connection with any
Transaction.

Section 4.24 Services. Except as set forth on Schedule 4.24, without limiting
the generality of the foregoing, since January 1, 2012, neither Company nor
Company Subsidiary has received any written notice as of the Agreement Date with
respect to claims existing or, to the Knowledge of Seller, threatened under or
pursuant to any material warranty, whether express or implied, on any service
offered or sold by Company, Company Subsidiary or CPS, in each case, pursuant to
any Material Contract (such services, collectively, “Services”).

Section 4.25 Accounts Receivable. The accounts receivable reflected on the
Balance Sheet arose from bona fide transactions in the ordinary course of the
Business and Company and Company Subsidiary have each fully rendered the
Services in connection therewith. No such account has been assigned or pledged
to any Person, and, except only to the extent fully reserved against as set
forth in the Balance Sheet, no defense or set-off to any such account has been
asserted in writing by the account obligor as of June 30, 2015.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT

Parent hereby represents and warrants to Seller that:

Section 5.01 Incorporation and Authority of Parent and Buyer. Parent and Buyer
are each a corporation or other organization duly incorporated or organized,
validly existing and, to the extent legally applicable, in good standing under
the Laws of the jurisdiction of its incorporation or organization. Parent and
Buyer each has the requisite corporate power to execute, deliver and perform its
obligations under the Buyer Transaction Agreements (including the consummation
of the Buyer Transactions) or the Parent Transaction Agreements (including
consummation of the Parent Transactions), as applicable. The execution, delivery
and performance by Parent of the Parent Transaction Agreements and by Buyer of
the Buyer Transaction Agreements have been duly and validly authorized by all
requisite corporate action on the part of Parent and no other proceedings on the
part of Parent or Buyer are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been, and
upon execution and delivery thereof, the other Parent Transaction Agreements and
Buyer Transaction Agreements will be, duly executed and delivered by Parent and
Buyer, as applicable, and (assuming due authorization, execution and delivery
thereof by the other parties hereto and thereto) this Agreement constitutes, and
upon execution and delivery thereof, the other Parent Transaction Agreements and
Buyer Transaction Agreements will constitute, legal, valid and binding
obligations of Parent and Buyer, as applicable, enforceable against Parent and
Buyer in accordance with their respective terms, subject to the Bankruptcy and
Equity Exception.

Section 5.02 Qualification of Parent and Buyer. Parent and Buyer each has the
corporate or other appropriate power and authority to own, manage, lease and
hold its assets and to operate its business as and where such assets are
presently located and such business is now conducted. Neither the character of
either Parent’s or Buyer’s assets nor the nature of either of their business
requires Parent or Buyer to be duly qualified to do business as a foreign
corporation in any jurisdiction outside those identified in Schedule 5.02,
except where the failure to be so qualified would not, individually or in the
aggregate, have a Buyer Material Adverse Effect. Parent and Buyer are each
qualified as a foreign corporation and is in good standing in each jurisdiction
listed with respect to Parent or Buyer, as applicable, in Schedule 5.02.

 

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Section 5.03 No Conflict. Provided that all Consents contemplated by
Section 5.04 have been obtained or taken, except as set forth on Schedule 5.03,
and except (a) as may result from any facts or circumstances relating to Seller,
Company, Company Subsidiary or their respective Affiliates or (b) in the case of
clauses (ii) and (iii) below, for any such conflicts, violations, breaches,
defaults, rights or Liens as would not reasonably be expected to have a Buyer
Material Adverse Effect and would not materially impair or delay the ability of
Buyer or Parent to consummate the Parent Transactions or Buyer Transactions, as
applicable, or otherwise perform their respective obligations under the Parent
Transaction Agreements or the Buyer Transaction Agreements, the execution,
delivery and performance by Parent of the Parent Transaction Agreements and
Buyer of the Buyer Transaction Agreements do not and will not:

(i) violate or conflict with the certificate or articles of incorporation or
bylaws or similar organizational documents of Parent or Buyer;

(ii) conflict with or violate any Law or Order applicable to Parent or Buyer; or

(iii) result in any breach of, or constitute a default under, or give to any
Person any right to terminate, amend, accelerate or cancel, or result in the
creation of any Lien (other than a Permitted Lien) on the assets or properties
if Parent or Buyer pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument to which Parent
or Buyer is a party or by which any of such assets or properties is bound.

Section 5.04 Consents and Approvals. The execution, delivery and performance by
Parent of the Parent Transaction Agreements and Buyer of the Buyer Transaction
Agreements do not and will not require any Consent, waiver or other action by,
or any filing with or notification to, any Government Authority by or with
respect to Parent or Buyer, except (a) in connection with applicable filing,
notification, waiting period or approval requirements under applicable Antitrust
Laws, (b) where the failure to obtain such Consent or waiver, or to take such
action or make such filing or notification would not reasonably be expected to
have a Buyer Material Adverse Effect and would not impair or delay the ability
of Parent to consummate the Parent Transactions or Buyer to consummate the Buyer
Transactions or otherwise perform its respective obligations under the
applicable Transaction Agreements, in each case, in any material respect, and
(c) as may be necessary as a result of any facts or circumstances relating to
Seller, Company or their respective Affiliates.

Section 5.05 Stock Issuance. At the Closing, the Stock Consideration will have
been duly authorized, validly issued, fully paid, non-assessable and free and
clear of all Liens and free of all transfer restrictions other than those
restrictions under applicable federal and state securities laws and as set forth
in the Transaction Agreements. Upon conversion of the Parent Preferred Stock,
the Conversion Shares will have been duly authorized, validly issued, fully
paid, non-assessable and free and clear of all Liens and free of all transfer
restrictions other than those restrictions under applicable federal and state
securities laws and as set forth in the Transaction Agreements. The Stock
Consideration and the Conversion Shares will be issued in compliance with all
Applicable Laws, including but not limited to the Securities Act and the NASDAQ
Rules. As of the Closing, the Certificate of Designation has been duly and
validly filed with the applicable Government Authority and is in full force and
effect. As of the Closing, the Parent Preferred Stock is senior in priority with
respect to dividends and liquidation proceeds to all other authorized classes of
capital stock of Parent. At the Closing, Parent will not have outstanding any
shares of preferred stock other than the Parent Preferred Stock.

Section 5.06 Compliance with Laws. Parent and Buyer each is and, since
January 1, 2012, has been in compliance with any and all Laws applicable to
Parent and Buyer, as applicable, except as would not reasonably be expected to
have a Buyer Material Adverse Effect. No investigation or review by any
Government Authority with respect to Parent or Buyer is pending or, to the
Knowledge of Parent, threatened, nor has any Government Authority indicated in
writing an intention to conduct the same, in each case other than those the
outcome of which would not reasonably be expected to have a Buyer Material
Adverse Effect. None of the representations and warranties contained in this
Section 5.06 shall be deemed to relate to permits and related matters (which are

 

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governed by Section 5.07), compliance with healthcare laws and related matters
(which are governed by Section 5.08), ethical practices and related matters
(which are governed by Section 5.09), intellectual property and related matters
(which are governed by Section 5.21), environmental and related matters (which
are governed by Section 5.22), employment, employee benefits and related matters
(which are governed by Section 5.23), taxes and related matters (which are
governed by Section 5.24) and the Real Properties and related matters (which are
governed by Section 5.25).

Section 5.07 Permits.

(a) Each of Parent and Buyer, each clinical laboratory owned, operated or
managed by Parent and Buyer and, as applicable, their respective employees,
owns, holds or possesses all Permits, any license, certificate, approval,
consent, permission, clearance, exemption, registration, qualification,
accreditation or authorization issued, granted or given by any Government
Authority, any provider agreement, and/or any accreditation by a private
accreditation organization that are necessary to entitle Parent, Buyer and each
clinical laboratory owned, operated or managed by Parent and Buyer, to own or
lease, operate and use its assets and to carry on and conduct its business
substantially as currently conducted (collectively, the “Parent Permits”).
Schedule 5.07(a) sets forth a list of each Parent Permit held as of the
Agreement Date that is necessary to entitle Parent, Buyer and each clinical
laboratory owned, operated or managed by Parent and Buyer to own, lease, operate
and use its assets and to carry on and conduct its business substantially as
currently conducted as of the Agreement Date. Each of the Parent Permits is
valid, subsisting and in full force and effect. Each of Parent and Buyer, each
clinical laboratory owned, operated or managed by Parent and Buyer and, as
applicable, their respective employees has fulfilled and performed its
obligations in all material respects under each of the Parent Permits. No
written or, to the Knowledge of Parent, oral notice of cancellation, of default
or of any material dispute concerning any Parent Permit, or of any event,
condition or state of facts described in the preceding clause, has been received
by Parent, Buyer, or a clinical laboratory owned, operated or managed by Parent
and Buyer or, as applicable, their respective employees. To the Knowledge of
Parent, no notice of cancellation, of default or of any material dispute
concerning any Parent Permit is threatened.

(b) Parent and Buyer and their respective officers, directors and employees,
have obtained all required approvals, registrations and authorizations from,
have made all appropriate applications and other submissions to, and have
prepared and maintained all records, studies and other documentation needed to
satisfy and demonstrate compliance in all material respects with the
requirements of, any Government Authorities necessary for operation of its
present business activities relating to the Buyer Lab Testing Services or its
business in compliance with all applicable Laws.

(c) Parent and Buyer have not made any false statement in, or material omission
from, the applications, approvals, reports or other submissions to any
Government Authorities or in or from any other records and documentation
prepared or maintained to comply with the requirements of any Government
Authorities relating to the Buyer Lab Testing Services or its business.

(d) Parent and Buyer are in compliance, in all material respects, with all
applicable regulations and requirements of Government Authorities relating to
the Buyer Lab Testing Services, including any requirements for investigating
customer complaints and inquiries.

(e) Schedule 5.07(e) sets forth a list of all authorizations, consents,
approvals, franchises, licenses and Permits required by any Person (other than a
Government Authority) that are necessary to entitle Parent, Buyer and each
clinical laboratory owned, operated or managed by Parent or Buyer to operated
its business as presently operated (for the purposes of this Section 5.07 only,
the “Other Person Authorizations”). All of the Other Person Authorizations have
been duly issued or obtained and are in full force and effect, and Parent, Buyer
and each clinical laboratory owned, operated or managed by Parent and Buyer are
in compliance in all material respects with the terms of the Other Person
Authorizations. Parent, Buyer and each clinical laboratory owned,

 

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operated or managed by Parent and Buyer have no reason to believe that the Other
Person Authorizations will not be renewed by the appropriate Person in the
ordinary course.

(f) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent and Buyer in Section 5.07 are the
sole and exclusive representations and warranties made regarding Parent Permits
and related matters.

Section 5.08 Compliance with Healthcare Laws.

(a) Each of Parent and Buyer is, and has been since September 30, 2009, in
compliance in all material respects with all applicable Healthcare Laws.

(b) None of Parent or Buyer, or their respective officers, directors or managing
employees or, to the Knowledge of Parent, their respective non-managing
employees, contractors or agents, or individuals with direct or indirect
ownership interests (or any combination thereof) of 5% or more in Parent or
Buyer (as those terms are defined in 42 C.F.R. § 1001.1001): (i) have engaged in
any activities that are prohibited under, or would be cause for civil or
criminal penalties or mandatory or permissive exclusion from, any Federal Health
Care Program under Sections 1128, 1128A, 1128B, 1128G or 1877 of the SSA,
Section 3729 of Title 31 of the United States Code, or related state or local
statutes, and including knowingly and willfully offering, paying, soliciting or
receiving any remuneration (including any kickback or bribe), directly or
indirectly, overtly or covertly, in cash or in kind in return for, or to induce,
the purchase, lease or order, or the arranging for or recommending of the
purchase, lease or order, of any good, facility, item or service for which
payment may be made in whole or in part under any such program; (ii) have had a
civil monetary penalty assessed against them under Section 1128A of the SSA,
proceedings initiated to impose such a penalty; (iii) have been excluded from
participation under any Federal Health Care Program under Section 1128 of the
SSA or otherwise suspended or debarred from contracting with the federal
government, or had proceedings initiated to impose such exclusion or debarment;
or (iv) have been charged or convicted (as defined in 42 C.F.R. § 1001.2) of any
of the categories of offenses described in Sections 1128(a) or 1128(b)(1),
(b)(2) or (b)(3) of the SSA.

(c) Except as set forth on Schedule 5.08(c), each of Parent and Buyer, and each
clinical laboratory owned, operated or managed by Parent and Buyer, is not
currently, nor has it been in the past: (A) subject to a corporate integrity
agreement, deferred prosecution agreement, consent decree, settlement agreement
or similar agreements or orders mandating or prohibiting future or past
activities; (B) filing (or planning to file) a disclosure pursuant to the
Self-Referral Disclosure Protocol or OIG’s Self Disclosure Protocol; (C) to the
Knowledge of Parent, under any Health Care Investigations; (D) on “pre-payment
review” by any Medicare administrative contractor or by CMS; (E) party to an
arrangement or contract with a referral source for which compensation does not
reflect fair market value for services actually rendered consistent with the
respective obligations of Parent, Buyer and, solely in connection with such
arrangement or contract, the other party thereto under the Healthcare Laws;
(F) a defendant in any qui tam or civil or criminal False Claims Act litigation;
(G) excluded from participation under any Federal Health Care Program under
Section 1128 of the SSA; (H) in receipt of a civil investigative demand or
subpoena from the Department of Justice of any OIG written or, to the Knowledge
of Parent, threatened inquiry, subpoena or demand; or (I) suspended or debarred
from contracting with the federal government.

(d) All contracts and other consulting or financial arrangements and
relationships entered into by Parent or Buyer with customers, vendors,
suppliers, employees and/or contractors comply in all material respects with the
Stark Law (42 U.S.C. § 1395nn), and all applicable regulations promulgated
thereunder. The foregoing representation and warranty shall similarly be true
and correct as it relates to any prohibition under any similar applicable state
“self-referral” laws.

(e) Each of Parent and Buyer operates its business in compliance in all material
respects with all applicable Laws relating to medical records and medical
information privacy, including all Privacy Laws. To the

 

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Knowledge of Parent, neither Parent nor Buyer has received any written inquiries
from the Office of Civil Rights of the U.S. Department of Health and Human
Services, CMS, the Federal Trade Commission, any state Attorney General or any
other Government Authority regarding Parent’s or Buyer’s compliance with the
Privacy Laws. To the Knowledge of Parent, each of Parent and Buyer has complied
with the terms of Business Associate Agreements (as defined in the HIPAA
Regulations) where in effect in all material respects. To the Knowledge of
Parent, there has been no unauthorized use or disclosure of Protected Health
Information (as defined in the HIPAA Regulations) by Parent or Buyer.

(f) Each of Parent and Buyer, and as applicable each clinical laboratory owned,
operated or managed by Parent and Buyer, has the requisite provider agreement,
provider number or other Parent Permit to bill any Federal Health Care Program
or non-governmental third party payor program from which Parent or Buyer
receives reimbursement for Buyer Lab Testing Services (collectively, “Buyer
Payor Programs”). Each of Parent and Buyer is in compliance in all material
respects with applicable conditions of participation in Buyer Payor Programs.
Parent’s and Buyer’s claims, billing, refunds, overpayments, adjustments and
documentation practices, and to the Knowledge of Parent, those of Parent’s and
Buyer’s contractors or agents, are, and have been since September 30, 2009, in
compliance in all material respects with applicable requirements of Buyer Payor
Programs. There is no investigation, audit, claim review, suit, inquiry,
proceeding or other action pending, or to the Knowledge of Parent, threatened,
which could result in a revocation, suspension, termination, probation,
restriction, limitation, or non-renewal of any Buyer Payor Program provider
number, result in Parent’s and Buyer’s exclusion from any Buyer Payor Program,
or result in a recoupment or refund of payments made to Parent or Buyer by any
Buyer Payor Program (other than routine refunds or denials of claims undertaken
in the ordinary course of business).

(g) Each of Parent and Buyer has in place a compliance program that adheres to
the U.S. federal sentencing guidelines for an effective compliance program and
includes the recommendations made in the OIG Compliance Program Guidance for
Clinical Laboratories published at 63 Fed. Reg. 45076 (August 24, 1998) in all
material respects.

(h) Parent and Buyer have furnished to Seller correct and complete copies, or if
agreed to by Seller in its sole discretion, summaries of, since January 1, 2011
all (1) material communications of Parent and Buyer with any Government
Authority with respect to Healthcare Laws and (2) written materials presented to
any compliance oversight committee of Parent or Buyer and the corresponding
minutes of any such meetings.

(i) To the extent that Parent or Buyer is participating in any research or
clinical trials project, such research or clinical trials project is performed
in compliance in all material respects with the applicable Healthcare Laws.

(j) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent and Buyer in Sections 5.08 and
5.20 are the sole and exclusive representations and warranties made regarding
compliance with Healthcare Laws, health care investigations, compliance with
Privacy Laws, reimbursement compliance and other related matters.

Section 5.09 Ethical Practices.

(a) Since January 1, 2012, neither Parent, Buyer nor, to the Knowledge of
Parent, any director, manager, officer, agent, consultant, distributor, employee
or any other person acting for, or on behalf of, Parent or Buyer has, directly
or indirectly: (i) violated or is in violation in any material respect of any
Improper Payment Laws in any jurisdiction; (ii) made, undertaken, offered to
make, promised to make or authorized the payment or giving of any Prohibited
Payments; (iii) to the Knowledge of Parent, been subject to any Prohibited
Payment Investigations; (iv) used funds or other assets, or made any promise or
undertaking in such regard, for the establishment or maintenance of a Prohibited
Fund; (v) made any false or fictitious entries in any books or records of Parent
or Buyer relating to any Prohibited Payment or Prohibited Fund; (vi) received
any unlawful

 

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discounts or rebates in violation of any Laws relating to antitrust or
competition; or (vii) breached or waived any code of ethics or similar foreign,
federal or state policy regarding business conduct.

(b) Parent and Buyer have established reasonable internal controls and
procedures intended to ensure compliance with Improper Payment Laws.

(c) Since January 1, 2012, the operations of Parent and Buyer are and have been
conducted in compliance in all material respects with all Money Laundering Laws,
and no Action involving Parent or Buyer with respect to Money Laundering Laws is
pending and, to the Knowledge of Parent, no such Actions are threatened.

(d) Neither Parent, Buyer nor, to the Knowledge of Parent, any of their
respective directors, managers, officers, agents, distributors, employees or
nor, to the Knowledge of Parent, any other persons acting on behalf of any of
the foregoing: (i) is, or is owned or Controlled by, a Prohibited Person;
(ii) directly or indirectly, has conducted, conducts or is otherwise involved
with any business with or involving any Government Authority (or any
sub-division thereof), or any person, entity or project, targeted by, or located
in any country that is the subject of, any of the sanctions administered by OFAC
or any other Sanctions; (iii) directly or indirectly supports or facilitates, or
plans to support or facilitate or otherwise become involved with, any such
person, Government Authority, entity or project; or (iv) is or ever has been in
violation of or subject to an investigation relating to Sanctions.

(e) Neither Parent nor Buyer is currently and, since January 1, 2012, has not
been, a party to any contract or bid with, or since January 1, 2012 conducted
business directly or indirectly with, any Prohibited Persons.

(f) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent and Buyer in this Section 5.09 are
the sole and exclusive representations and warranties made regarding ethical
practices, Improper Payment Laws, Money Laundering Laws, Sanctions, Prohibited
Persons and other related matters.

Section 5.10 Securities Matters. Buyer is an “accredited investor” (as such term
is defined in Rule 501 of Regulation D under the Securities Act). The Shares are
being acquired by Buyer for its own account, and not with a view to, or for the
offer or sale in connection with, any public distribution or sale of the Shares
or any interest in them. Each of Parent and Buyer has sufficient knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risks of its investment in the Shares, and Buyer is capable of
bearing the economic risks of such investment, including a complete loss of its
investment in the Shares. Buyer acknowledges that the Shares have not been
registered under the Securities Act, or any securities Laws or any state or
other jurisdiction (U.S. or non-U.S.), and understands and agrees that it may
not sell or dispose of any Shares except pursuant to a registered offering in
compliance with, or in a transaction exempt from, the registration requirements
of the Securities Act and any other applicable securities Laws of any state or
other jurisdiction (U.S. or non-U.S.).

Section 5.11 Financial Ability.

(a) Attached hereto as Exhibit D is a true and complete copy of each executed
commitment letter to Buyer (the “Commitment Letters”) from AllianceBernstein
L.P. and Wells Fargo Bank, N.A. (collectively, the “Lenders”) pursuant to which
the Lenders, severally and not jointly, have committed to provide Buyer with
debt financing for the Transactions in an aggregate amount of $65,000,000 (the
“Financing”), which amount is greater than or equal to the full amount of the
debt financing required to consummate the Transactions on the terms contemplated
by the Transaction Documents and in each case to pay all of Buyer’s and Parent’s
related fees and expenses.

 

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(b) Each Commitment Letter is a legal, valid and binding obligation of Buyer
and, to the Knowledge of Parent, the other party or parties thereto, and is in
full force and effect.

(c) There are no side letters (including fee letter(s) relating to fees with
respect to the Financing) or other contracts, agreements or understandings to
which Parent or any of its Affiliates is a party which would adversely affect
the amount or availability (including the timing) of the full amount of the
Financing other than as expressly set forth in the Commitment Letters.

(d) Except as specifically set forth in the Commitment Letters, (i) there are no
conditions precedent to the obligations of the Lenders to fund the Financing and
(ii) there are no contingencies pursuant to any contract, agreement or other
understanding relating to the Transactions to which Parent or any of its
Affiliates is a party that could permit any of the Lenders to reduce the total
amount of the Financing or impose any additional condition precedent to the
availability of the Financing.

(e) As of the Agreement Date, Parent (i) is not aware of any fact or occurrence
that makes any of the representations or warranties of Buyer in the Commitment
Letters inaccurate in any material respect, (ii) has no reason to believe that
Buyer will be unable to satisfy on a timely basis any term or condition of
closing to be satisfied by it or its Affiliates contained in the Commitment
Letters, and (iii) has no reason to believe that any portion of the Financing
required to consummate the Transactions will not be made available to Buyer on
the Closing Date. Buyer has fully paid any and all commitment fees and other
fees required by the Commitment Letters to be paid as of the Agreement Date.

(f) As of the Agreement Date, (i) no Commitment Letter has been amended or
modified (provided, that the existence or exercise of any “market flex
provisions” contained in any Commitment Letter or fee letter executed in
connection therewith or the addition of further lenders, agents, arrangers,
bookrunners, syndication agents or similar entities shall not constitute an
amendment or modification of any Commitment Letter), (ii) to the Knowledge of
Parent, no such amendment or modification is contemplated, and (iii) the
commitments contained in each Commitment Letter have not been withdrawn,
decreased or rescinded in any respect.

(g) Each of Parent and Buyer has, and will have at the Closing, (i) the
resources and capabilities (financial and otherwise) to perform its respective
obligations under the Transaction Agreements and (ii) immediately available
funds in connection with the Financing in an amount equal to or in excess of the
Closing Cash Payment (assuming that all rights to flex the terms of the
Financing are exercised to their maximum extent), which will provide Buyer with
acquisition financing at the Closing sufficient to consummate the Transactions,
pay all of Parent’s and Buyer’s fees and expenses incurred in connection with
the Transactions and undertake its respective other obligations at Closing upon
the terms contemplated by the Transaction Documents. Neither Parent nor Buyer
has incurred any obligation, commitment, restriction or other Liability of any
kind, and is not contemplating or aware of any obligation, commitment,
restriction or other Liability of any kind, in either case which could impair or
adversely affect such resources, funds or capabilities.

Section 5.12 Brokers. Except for fees and expenses of Stephens Inc. and Houlihan
Lokey Capital, Inc. (“Houlihan Lokey”), no broker, finder or investment banker
is entitled to any brokerage, finder’s or other fee or commission from Parent,
Buyer or any of their respective Affiliates in connection with any Transaction.

Section 5.13 Solvency. Immediately after giving effect to the consummation of
the Transactions (including any financings being entered into in connection
therewith), and assuming the accuracy of the representations and warranties made
by Seller in Article IV:

(a) the fair saleable value (determined on a going concern basis) of the assets
of Buyer and Company and their respective Subsidiaries will be greater than the
total amount of their Liabilities;

(b) Buyer, Company and their respective Subsidiaries will be solvent and able to
pay their respective debts and obligations in the ordinary course of business
consistent with past practice as they become due;

 

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(c) no transfer of property is being made and no obligation is being incurred in
connection with the Transactions with the intent to hinder, delay or defraud
either present or future creditors of any of Parent, Buyer and their respective
Subsidiaries (which, for purposes of this Section 5.13(c) shall include Company)
in connection with the Transactions. Neither Parent nor Buyer have incurred, or
plan to incur, debts beyond their ability to pay as they become absolute and
matured; and

(d) Buyer, Company and their respective Subsidiaries will have adequate capital
to carry on their respective businesses and all businesses in which they are
about to engage.

Section 5.14 Parent Stockholder Approval. The affirmative vote of (a) a majority
of the outstanding shares of Common Stock, with respect to the approval of the
amendment to Parent’s organizational documents increasing the authorized number
of shares of (i) Common Stock from one hundred million (100,000,000) shares to
two hundred fifty million (250,000,000) shares and (ii) Preferred Stock from ten
million (10,000,000) shares to fifty million (50,000,000) shares, and (b) a
majority of the votes cast at the Parent Stockholder Meeting, with respect to
the approval of the Stock Issuance in compliance with NASDAQ Rules, in each
case, by holders of the shares of Common Stock entitled to vote thereon on the
record date for the Parent Stockholder Meeting are the only votes of the
stockholders of Parent necessary to approve the transactions contemplated by
this Agreement (the “Parent Stockholder Approval”). None of the information
included or incorporated by reference in the Proxy Statement (other than that
specifically provided in writing by Seller for inclusion therein) will, on the
date it is first mailed to the shareholders of Parent and at the time of the
Parent Stockholder Meeting, 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 therein, in light of the circumstances under which
they are made, not misleading. The Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act. Notwithstanding the
foregoing, Parent makes no representation or warranty with respect to any
information supplied by Seller for inclusion or incorporation by reference in
the Proxy Statement.

Section 5.15 Certain Matters as to Parent and Buyer. Each of Parent’s and
Buyer’s funds are derived from legitimate business activities. Neither Parent
nor Buyer is a Prohibited Person with whom Seller is prohibited from engaging in
any Transaction due to any Sanctions Laws or violations thereof.

Section 5.16 SEC Reports; Financial Statements; Registration Rights.

(a) Parent has timely filed all forms, reports, statements, certifications and
other documents (including all exhibits, amendments and supplements thereto)
required to be filed by it with the SEC since January 1, 2012 under the Exchange
Act or the Securities Act (all such forms, reports, statements, certificates and
other documents filed since January 1, 2012, collectively, the “Parent SEC
Documents”). As of their respective dates, or, if amended, as of the date of the
last such amendment, each of the Parent SEC Documents complied in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the Sarbanes-Oxley Act, as the case may be, each as in effect on the
date so filed. As of their respective filing dates and in the case of proxy
statements on the date of mailing (or, if amended or superseded by a subsequent
filing, as of the date of such amendment or superseding filing), none of the
Parent SEC Documents (including any financial statements or schedules included
therein) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated or incorporated by reference therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Each Parent SEC
Document that is a registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act, as of the date such
registration statement or amendment became effective, did not, and each such
Parent SEC Document filed subsequent to the Agreement Date and prior to the
Closing Date will not, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading. No Subsidiary of Parent is, or since
January 1, 2012 has been, required to file any form, report, registration
statement or other document with the SEC. As used in this Section 5.16, the term
“filed” shall be broadly construed to include any manner in which a document or
information was filed, furnished, transmitted, supplied or otherwise made
available to the SEC.

 

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(b) Parent has made available to Seller copies of all comment letters received
by Parent from the SEC since January 1, 2012 relating to the Parent SEC
Documents, together with all written responses of Parent thereto. There are no
outstanding or unresolved comments in any such comment letters received by
Parent from the SEC. To the Knowledge of Parent none of the Parent SEC Documents
is the subject of any ongoing review by the SEC.

(c) The audited consolidated financial statements of Parent (including any
related notes thereto) contained in or incorporated by reference in the Parent
SEC Documents were prepared in accordance with GAAP applied on a consistent
basis throughout the period involved (except as may be indicated in the notes
thereto) and fairly present in all material respects the consolidated financial
position of Parent and its Subsidiaries at the date thereof and the results of
their operations and cash flows for the periods indicated, all in accordance
with GAAP. The unaudited consolidated financial statements of Parent (including
any related notes thereto) included in Parent’s quarterly reports on Form 10-Q
filed with the SEC since December 31, 2014 have been prepared in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
may be indicated in the notes thereto or may be permitted by the SEC under the
Exchange Act) and fairly present in all material respects the consolidated
financial position of Parent and its Subsidiaries as of the respective dates
thereof and the results of their operations and cash flows for the periods
indicated (subject to normal period-end adjustments), all in accordance with
GAAP. The financial statements referred to in this Section 5.16 reflect the
consistent application of such accounting principles throughout the periods
involved, except as disclosed in the notes to such financial statements. No
financial statements of any Person other than Parent and its Subsidiaries are,
or since January 1, 2012 have been, required by GAAP to be included in the
consolidated financial statements of Parent.

(d) Parent maintains disclosure controls and procedures (within the meaning of
Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) designed to
ensure that information required to be disclosed by Parent in the reports that
it files and submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms,
including that information required to be disclosed by Parent in the reports
that it files and submits under the Exchange Act is accumulated and communicated
to management of Parent as appropriate to allow timely decisions regarding
required disclosure. Parent maintains a system of internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated
under the Exchange Act) designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with GAAP. Parent has disclosed, based on
its most recent evaluation, to Parent’s auditors and the audit committee of
Parent Board (i) any significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting that are
reasonably likely to adversely affect in any material respect Parent’s ability
to record, process, summarize and report financial information and (ii) any
fraud, whether or not material, that involves management or other employees who
have a significant role in Parent’s internal control over financial reporting.
There were no significant deficiencies or material weaknesses identified in
management’s assessment of internal control over financial reporting as of and
for the year-ended December 31, 2014 (nor has any such deficiency or weakness
been identified since such date).

(e) Other than as set forth on Schedule 5.16(e), Parent (i) has no agreement,
arrangement or understandings that is currently in effect to register any
securities of Parent or any of its subsidiaries under the Securities Act or
under any state securities law and has not granted registration rights to any
Person (other than agreements, arrangements or understandings with respect to
registration rights that are no longer in effect) and (ii) has agreement,
arrangement or understandings that is currently in effect with respect to the
appointment or nomination of any directors. None of the Transactions conflict
with any of the terms of the agreements listed on Schedule 5.16(e).

Section 5.17 Capital Structure of Parent and Buyer.

(a) The authorized equity and capital stock of Parent consists solely
of 10,000,000 shares of “blank check” preferred stock, none of which have been
issued, and 100,000,000 shares of Common Stock. As of the

 

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Agreement Date, there are issued and outstanding (i) 60,608,614 shares of Common
Stock, (ii) 5,466,471 Parent Stock Options to purchase an aggregate of 5,466,471
shares of Common Stock (of which Parent Stock Options to purchase an aggregate
of 2,763,747 shares of Common Stock were exercisable) pursuant to Parent Stock
Plans, (iii) 650,000 shares of Common Stock reserved for issuance pursuant to
outstanding warrants and (iv) no shares of Common Stock held in treasury. There
are 1,144,940 shares of Common Stock reserved for issuance pursuant to future
awards under Parent’s Amended and Restated Equity Incentive Plan and 348,564
shares of Common Stock reserved for issuance pursuant to the Parent’s Employee
Stock Purchase Plan. All of the Parent Common Stock and Parent Preferred Stock
to be issued as the Stock Consideration pursuant to this Agreement will be, duly
authorized and validly issued, fully paid and nonassessable, and none of the
Parent Common Stock or Parent Preferred Stock to be issued as the Stock
Consideration will be, issued in violation of (i) any preemptive or other rights
of any Person to acquire securities of Company, or (ii) any applicable federal
or state securities laws, and the rules and regulations promulgated thereunder.
Other than as set forth in the second sentence of this Section 5.17(a), there
are no options, subscriptions, warrants, calls, or rights of conversion or other
similar rights (preemptive or otherwise), agreements, arrangements or
commitments obligating Parent to issue or sell any shares of its capital stock,
other Equity Interests or securities convertible into or exchangeable for its
shares or other Equity Interests or any shares or other Equity Interests of
Parent, other than as provided in this Agreement. There are no voting trusts,
stockholder agreements, proxies or other agreements in effect with respect to
the voting or transfer of the Equity Interests of Parent.

(b) Parent owns all of the issued and outstanding equity and capital stock of
Buyer.

(c) The authorized capital stock of Buyer consists of one hundred (100) shares
of common stock, all of which are issued and outstanding (the “Buyer Common
Stock”). Parent owns all of the Buyer Common Stock beneficially and of record,
free and clear of all Liens, except (i) any Lien arising out of, under or in
connection with the Securities Act or any other applicable securities Laws;
(ii) any Lien arising out of, under or in connection with this Agreement or any
other Transaction Agreement; or (iii) any Lien created by or through, or
resulting from any facts or circumstances relating to, Company, Company
Subsidiary or their respective Affiliates, and no Equity Interests of Buyer are
held in Buyer’s treasury. All of the shares of Buyer Common Stock have been duly
authorized and validly issued, are fully paid and non-assessable and were not
issued in violation of (i) any preemptive or other rights of any Person to
acquire securities of Buyer, or (ii) any applicable federal or state securities
laws, and the rules and regulations promulgated thereunder. There are no
options, subscriptions, warrants, calls, or rights of conversion or other
similar rights (preemptive or otherwise), agreements, arrangements or
commitments obligating Buyer to issue or sell any shares of its capital stock,
other Equity Interests or securities convertible into or exchangeable for its
shares or other Equity Interests or any shares or other Equity Interests of
Buyer, other than as provided in this Agreement. There are no voting trusts,
stockholder agreements, proxies or other agreements in effect with respect to
the voting or transfer of the Buyer Common Stock or other Equity Interests of
Buyer.

(d) Except as Set forth on Schedule 5.17(e), neither Parent nor Buyer owns,
directly or indirectly, any outstanding securities or other Equity Interests in,
any other Person.

(e) A copy of Parent’s and Buyer’s articles of incorporation and bylaws, current
as of the Agreement Date, have been provided to Seller, and each such copy is
true, accurate and complete and reflects all amendments made through the
Agreement Date.

Section 5.18 No Undisclosed Liabilities. To the Knowledge of Parent, other than
(i) as set forth in the consolidated balance sheet of Parent and its
subsidiaries included in Parent’s annual report on Form 10-K for the fiscal year
ended December 31, 2014, (ii) Liabilities for Taxes, (iii) Liabilities incurred
in the ordinary course of business consistent with past practice since
December 31, 2014 and (iv) Liabilities that would not reasonably be expected to
have a Buyer Material Adverse Effect, Parent does not have any Liabilities
including, but not limited to, Liabilities for violation of Laws, Liabilities
for overbilling Government Programs or third party payors for Services, breach
of contract or tort, that are required to be reflected on a balance sheet
prepared in accordance with GAAP.

 

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Section 5.19 Absence of Certain Changes or Events. Except as contemplated by the
Transaction Agreements or in connection with the preparation for or the
consummation of the Transactions, during the period from January 1, 2015 through
the Agreement Date, (a) Parent and Buyer has each conducted its business in all
material respects in the ordinary course of business consistent with past
practice, (b) as of the Agreement Date, there has not been any Buyer Material
Adverse Effect or any event that would materially impair or delay the ability of
Parent to consummate the Parent Transactions, Buyer to consummate the Buyer
Transactions or either to otherwise perform its respective obligations under the
applicable Transaction Agreements and (c) except as set forth on Schedule 5.19
neither Parent nor Buyer has taken any of the actions specified in
Sections 6.01(b)(i)–(xi).

Section 5.20 Absence of Litigation. As of the Agreement Date, no Actions are
pending or, to the Knowledge of Parent, threatened against Parent or Buyer that,
if decided adversely, would reasonably be expected to have a Buyer Material
Adverse Effect or would prevent or materially impair or delay the ability of
Parent to consummate the Parent Transactions or Buyer to consummate the Buyer
Transactions. Schedule 5.20 includes a true and correct listing of all Actions
that were settled or adjudicated with respect to Parent or Buyer since
January 1, 2012.

Section 5.21 Intellectual Property.

(a) To the Knowledge of Parent, the Intellectual Property and Technology owned
by Parent, constitute all material Intellectual Property necessary to the
operation of each of Parent’s and Buyer’s business in all material respects as
it is conducted on the Agreement Date.

(b) To the Knowledge of Parent, the operation of each Parent’s and Buyer’s
business by Parent and Buyer, as applicable, as currently conducted does not
infringe upon or misappropriate the Intellectual Property of any third party in
a manner that would reasonably be expected to have a Buyer Material Adverse
Effect.

(c) Neither Parent nor Buyer has received any written claim or notice from any
Person during the one (1)-year period ending on the Agreement Date alleging that
the operation of either of Parent’s or Buyer’s business by Parent or Buyer, as
applicable, infringes upon or misappropriates any Intellectual Property of any
third party which, if proven or established, would reasonably be expected to
have a Buyer Material Adverse Effect. As of the Agreement Date, there are no
infringement Actions pending or, to the Knowledge of Parent, threatened in
writing against Parent or Buyer alleging that the operation of the either of
Parent’s or Buyer’s business by Parent or Buyer, as applicable, infringes upon
or misappropriates any Intellectual Property of any third party which, if proven
or established, would reasonably be expected to have a Buyer Material Adverse
Effect.

(d) To the Knowledge of Parent, as of the Agreement Date no Person is engaging
in any activity that infringes in any material respect upon the Parent’s
Intellectual Property or the Parent’s Technology, except for any such
infringements that do not materially impair the ability of Parent or Buyer, as
applicable, to operate their business as conducted on the Agreement Date or that
would not reasonably be expected to have a Buyer Material Adverse Effect.

(e) Neither Parent nor Buyer has received during the one (1)-year period ending
on the Agreement Date written notice of any claims, challenging the validity,
effectiveness or ownership by Parent or Buyer, as applicable, of any Parent
Intellectual Property.

(f) To the Knowledge of Parent, all employees and third parties with whom Parent
or Buyer have shared the source code to any Software owned by Parent is
obligated to treat as confidential such source code.

(g) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent in this Section 5.21 are the sole
and exclusive representations and warranties made regarding Parent’s
Intellectual Property or Technology

 

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Section 5.22 Environmental Matters.

(a) Except as disclosed on Schedule 5.22:

(i) there are no Actions pending or, to the Knowledge of Parent, threatened in
writing, against Parent or Buyer with respect to either’s business or, to the
Knowledge of Parent, either’s owned and leased real properties, alleging that
Parent or Buyer is violating, or asserting Liability of Parent or Buyer under,
Environmental Law; and

(ii) Parent and Buyer each is currently in compliance in all material respects
with all applicable Environmental Laws, including obtaining and maintaining in
effect all Environmental Permits required by applicable Environmental Laws.
Parent and Buyer each is in compliance, in all material respects, with all state
and federal regulations with respect to the disposal of medical waste and
Hazardous Materials, including but not limited to xylene, in the laboratory.

(b) There are no Environmental Claims, pending or, to the Knowledge of Parent,
threatened against Parent or Buyer, or judgments or orders relating to any
Hazardous Materials issued against Company or Company Subsidiary and relating to
any owned or leased real properties currently or formerly owned, leased or
otherwise used by Parent or Buyer. Neither Parent nor Buyer has assumed any
Liability of any Person for cleanup in connection with any Environmental Claim.

(c) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent and Buyer in this Section 5.22 are
the sole and exclusive representations and warranties made by Parent regarding
environmental, health or safety matters, Environmental Laws, Environmental
Permits or Hazardous Materials.

Section 5.23 Employee Benefits Matters; Labor.

(a) Since January 1, 2015, none of the Buyer Employee Plans nor any trust
created thereunder or with respect thereto has engaged in any “prohibited
transaction” or “party-in-interest transaction” as such terms are defined in
Section 4975 of the Code and Section 406 of ERISA which could subject either
Parent or Buyer to a material Tax or penalty on prohibited transactions or
party-in-interest transactions pursuant to Section 4975 of the Code or
Section 502(i) of ERISA.

(b) Parent and Buyer each (i) complies in all material respects with all
applicable Laws with respect to employment, employment practices, terms and
conditions of employment, hiring, termination of employment, occupational safety
and health, wages and hours, in each case with respect to its employees; and
(ii) is not liable for any material payment to any trust or other fund governed
by or maintained by or on behalf of any Government Authority with respect to
unemployment compensation benefits, social security or other benefits or
obligations for its employees (other than routine payments to be made in the
normal course of business and consistent with past practice).

(c) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent and Buyer in this Section 5.23 are
the sole and exclusive representations and warranties made regarding employees,
Buyer Employee Plans or other employment or employee benefits matters.

Section 5.24 Taxes.

(a) All material Tax Returns that are required to be filed by Parent and Buyer
have been timely filed (taking into account requests for extensions to file such
Tax Returns), and all such Tax Returns are true, correct, and complete in all
material respects. All material Taxes owed by Parent and Buyer, whether or not
shown as due on such Tax Returns, have been timely paid in full, except for
Taxes being contested in good faith by appropriate proceedings and for which
adequate provision therefor in accordance with GAAP has been made in the
financial statements or the books and records of the business of either Parent
or Buyer, as applicable.

 

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(b) No deficiencies for any Taxes have been proposed, asserted or assessed in
writing by a Taxing Authority against Parent or Buyer that are still pending.
There are no pending Tax audits, examinations or administrative or judicial
proceedings with respect to any Tax liability of Parent or Buyer. Neither Parent
nor Buyer has received from any Taxing Authority (including jurisdictions where
neither Parent nor Buyer has filed Tax Returns) any written notice indicating an
intent to open an unresolved Tax audit or other review with respect to Taxes
owed by Parent or Buyer. There are no liens for Taxes upon the assets of either
Parent or Buyer, except for liens for Taxes not yet due and payable or liens for
Taxes that are being contested in good faith by appropriate proceedings and for
which adequate reserves have been provided on the books and records of Parent or
Buyer, as applicable, in each case in accordance with GAAP.

(c) No extensions of the period for assessment of any Taxes are in effect with
respect to Parent or Buyer other than as the result of extending the due date of
a Tax Return. No closing agreements, private letter rulings, technical advice
memoranda or similar agreements or rulings relating to Taxes have been entered
into or issued by any Taxing Authority with or in respect of any Tax matter
affecting Parent or Buyer that affect post-Closing Tax periods. Neither Parent
nor Buyer is presently contesting any Tax of Parent or Buyer before any
Government Authority.

(d) No material Tax Return filed by Parent or Buyer is under current examination
by any Taxing Authority. No unresolved written claim has been made within the
last three (3) years by any Government Authority in a jurisdiction where a Tax
Return is not filed by Parent or Buyer that any such Tax Return is required to
be filed or that Parent, Buyer or any item or asset of either is or may be
subject to taxation by that jurisdiction.

(e) There are no Liens for Taxes on the assets of either Parent or Buyer other
than Liens for Taxes not yet due and payable or Taxes being contested in good
faith.

(f) All material Taxes required to be withheld, collected or deposited by Parent
and Buyer have been timely withheld, collected or deposited as the case may be,
and to the extent required have been paid to the proper Taxing Authority.

(g) Excluding agreements the principal subject matter of which is not Taxes,
neither Parent nor Buyer is a party to, is bound by or has any obligation under
any Tax sharing, Tax indemnity agreement, or similar agreement, in each case,
that will not terminate on or before the Closing Date.

(h) Neither Parent nor Buyer has entered into any “listed transactions” as
defined in Treasury Regulations Section 1.6011-4(b)(2).

(i) Neither Parent nor Buyer will be required to include any item of income in,
or exclude any item of deduction from, taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of any (i) change in
method of accounting for a taxable period ending on or prior to the Closing Date
made by Parent or Buyer prior to the Closing; (ii) “closing agreement” as
described in Section 7121 of the Code (or any corresponding or similar provision
of state, local or foreign Tax Law) executed by Parent or Buyer prior to the
Closing; (iii) election under Section 108(i) of the Code made by Parent or Buyer
prior to the Closing; (iv) installment sale or open transaction disposition made
on or prior to the Closing Date that does not result in the receipt of cash by
Parent or Buyer in Tax periods (or portions thereof) beginning after the Closing
Date; (v) prepaid amount that is not reflected in the financial statements or
the books and records of the business of either Parent or Buyer on or prior to
the Closing Date; or (vi) use of an improper method of accounting for any Tax
period (and the portion of any Straddle Period) ending on or before the Closing
Date by Parent or Buyer with respect to items of income or deductions originally
reflected by Parent or Buyer in Tax Returns for Tax periods ending on or before
the Closing Date.

(j) Neither Parent nor Buyer has been a “distributing corporation” or a
“controlled corporation” in connection with a transaction that was purported or
intended to be governed in whole or in part by Sections 355 or 361 of the Code
within the past two (2) years.

 

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(k) Neither Parent nor Buyer has any current plan or intention to merge (which
for the purposes of this Section 5.24(k) shall include any transaction treated
as a merger under state Law applicable to Company) Company. Parent does not have
any plan or intention to liquidate or merge Buyer.

(l) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent and Buyer in this Section 5.24 are
the sole and exclusive representations and warranties made regarding Parent’s
and Buyer’s Taxes or other Tax matters.

Section 5.25 Real Property.

(a) Schedule 5.25 sets forth a list, as of the Agreement Date, of Parent’s and
Buyer’s owned real property and leased real property. Parent or Buyer, as
applicable, has good and valid title to all of its owned real property as of the
Agreement Date and valid title to the leasehold estate (as lessee or sublessee)
in all of its leased real property set forth on Schedule 5.25, in each case free
and clear of all Liens, except for Permitted Liens and except for:

(i) Liens that secure Debt that is reflected on the consolidated balance sheet
of Parent and its subsidiaries included in Parent’s annual report on Form 10-K
for the fiscal year ended December 31, 2014;

(ii) zoning, building and other generally applicable land use restrictions; and

(iii) Liens that have been placed by a third party on the fee title of real
property constituting Parent’s leased real property or real property over which
Parent has easement rights, and subordination or similar agreements relating
thereto.

(b) All leases and subleases for Parent’s or Buyer’s leased real property under
which Parent or Buyer is a lessee or sublessee are in full force and effect and
are enforceable, in all material respects, in accordance with their respective
terms, subject to the Bankruptcy and Equity Exception, and no written notices of
material default under any such lease or sublease have been sent or received by
Parent, Buyer or their respective Affiliates during the period from January 1,
2012 through the Agreement Date.

(c) None of Parent, Buyer or their respective Affiliates has received any
written notice from any Government Authority asserting any violation or alleged
violation of applicable Laws with respect to any of Parent’s of Buyer’s owned or
leased properties that remains uncured as of the Agreement Date and that would
reasonably be expected to have a Buyer Material Adverse Effect.

(d) None of Parent, Buyer or their respective Affiliates has received written
notice of (x) any condemnation, eminent domain or similar proceeding affecting
any portion of any of such buildings or premises or any access thereto, and to
the Knowledge of Parent no such proceedings are contemplated or (y) any special
assessment or pending improvement liens to be made by any Government Authority
which could materially and adversely affect any of such buildings or premises.

(e) Notwithstanding anything in this Agreement to the contrary, the
representations and warranties made by Parent and Buyer in this Section 5.25 are
the sole and exclusive representations and warranties made regarding Parent’s or
Buyer’s owned or leased properties or any other real property matters pertaining
to Parent or Buyer.

Section 5.26 Opinion of Financial Advisors. Parent has received the opinion of
Houlihan Lokey to the effect that, as of the date of the opinion and based upon
and subject to the assumptions, qualifications, matters and limitations set
forth therein, the Purchase Price to be paid by Buyer to Seller is fair to
Parent from a financial point of view.

 

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Section 5.27 Parent Board Recommendation. The Parent Board, at a meeting duly
called and held, has (a) determined that this Agreement and the transactions
contemplated by this Agreement, including the Transactions, taken together, are
advisable and in the best interests of the stockholders of Parent and took all
action board action necessary for the approval of the Proposals and the matters
contemplated thereby and (b) resolved unanimously to recommend that the
stockholders of Parent approve and adopt the Proposals (the “Parent Board
Recommendation”).

Section 5.28 Anti-Takeover Provisions . (a) Parent and the Parent Board have
taken all necessary action to exempt Seller, this Agreement, the Transaction
Agreements and the Transactions from any “fair price,” “moratorium,” “control
share acquisition” or other antitakeover statute or similar statute or
regulation under the Nevada Revised Statutes (“NRS”), including, but not limited
to, NRS Sections 78.378 – 78.3793, inclusive, and NRS Sections 78.411-78.444,
inclusive (each, a “Takeover Statute”); (b) no other “fair price,” “moratorium,”
“control share acquisition” or other antitakeover statute or similar statute or
regulation, applies or purports to apply to this Agreement, the Transaction
Agreements or the Transactions; and (c) Parent has not adopted, effected,
implemented or proposed to adopt, effect or implement any “shareholders’ rights
plan,” “poison pill” or similar arrangement adverse to Seller or its Affiliates.

ARTICLE VI

ADDITIONAL AGREEMENTS

Section 6.01 Conduct of Business Before the Closing.

(a) Except as required by applicable Law or as otherwise contemplated by or
necessary to effectuate the Transaction Agreements, and except for matters
identified on Schedule 6.01(a), during the Pre-Closing Period, unless Buyer
otherwise consents in advance (which consent shall not be unreasonably withheld,
conditioned or delayed), Seller will, and will cause Company and Company
Subsidiary to, conduct the Business in the ordinary course of business
consistent with past practice. Without limiting the foregoing, except as
required by applicable Law or as otherwise contemplated by or necessary to
effectuate the Transaction Agreements, and except for matters identified on
Schedule 6.01(a), during the Pre-Closing Period, unless Buyer otherwise consents
in advance (which consent shall not be unreasonably withheld, conditioned or
delayed), Seller covenants and agrees that, neither Company nor Company
Subsidiary shall:

(i) amend or otherwise change its articles of incorporation or bylaws or any
equivalent organizational documents;

(ii) issue, sell, pledge, dispose of or encumber any of Company’s or Company
Subsidiary’s Equity Interests, or grant to any Person any right to acquire any
of Company’s or Company Subsidiary’s Equity Interests;

(iii) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of Company’s
or Company Subsidiary’s Equity Interests, except for any dividend or
distribution payable in cash by Company Subsidiary to Company or by Company or
Company Subsidiary to Seller or any of its Affiliates;

(iv) reclassify, split, combine or subdivide any shares of capital stock of
Company or Company Subsidiary or redeem, repurchase or otherwise acquire any
shares of capital stock of Company or Company Subsidiary;

(v) (x) acquire (whether by merger, consolidation or acquisition of stock or
assets or otherwise) any corporation, partnership or other business organization
or division thereof or any assets, in each case, other

 

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than purchases of inventory and other non-material assets in the ordinary course
of business or pursuant to existing contracts; or (y) sell or otherwise dispose
of (whether by merger, consolidation or sale of stock or assets or otherwise)
any assets of Company or Company Subsidiary, other than sales or dispositions of
finished goods inventory in the ordinary course of business consistent with past
practice;

(vi) (A) make or rescind any material election relating to Taxes outside of the
ordinary course of business, (B) settle or compromise any material Tax liability
or refund, (C) implement or adopt any material change in its Tax methods of
accounting outside of the ordinary course of business, except (x) as may be
appropriate to conform to changes in statutory or regulatory accounting rules or
GAAP or regulatory requirements with respect thereto, (y) as may be required by
changes in the Tax methods of accounting, policies or practices of Seller other
than, for the avoidance of doubt, with respect to a matter governed by
Section 6.01(a)(vi)(E), or (z) as may be required by a change in applicable Law,
(D) file any material amended Tax Return or claim for refund of Taxes,
(E) adjust the Tax basis of any asset outside of the ordinary course of business
(for this purpose, ordinary course of business with respect to the adjustment to
the Tax basis of any receivable shall mean the accounting policy set forth in
Schedule 6.01(a)(vi)), or (F) enter into any ruling request, closing agreement
or similar agreement with any Taxing Authority; in each case to the extent such
action could be expected to increase the Tax liability of Company or Company
Subsidiary in any taxable period (or portion thereof) beginning after the
Closing Date; notwithstanding the foregoing, neither Seller, Company nor Company
Subsidiary shall be required to take any action or avoid taking any action
(except as specified in Section 6.01(a)(vi)(E)) pursuant to this
Section 6.01(a)(vi) unless the Buyer Indemnified Parties would incur a Loss as
the result of such action for which Loss the Buyer Indemnified Parties are not
indemnified by Seller under this Agreement and Seller does not otherwise agree
to indemnify the Buyer Indemnified Parties for such Loss;

(vii) agree to any exclusivity, non-competition or similar provision or covenant
restricting Company or Company Subsidiary from competing in any line of business
or with any Person or in any area or engaging in any activity or business
(including with respect to the development, manufacture, marketing or
distribution of their respective products or services), or pursuant to which any
benefit or right would be required to be given or lost as a result of so
competing or engaging, or which would have any effect on Company or Company
Subsidiary after the Closing;

(viii) adopt a shareholders rights plan;

(ix) grant any registration rights to any Person or reach any agreement
regarding Equity Interests of Company or Company Subsidiary, arrangement or
understanding with respect to any such registration rights with any Person;

(x) grant any severance or termination pay to any Business Employee, other than
those made in Company’s or Company Subsidiary’s ordinary course of business and
consistent with past practices or to the extent required by law, or pursuant to
Company’s or Company Subsidiary’s existing employment, retention, severance and
similar agreements with any Business Employee as disclosed in the Disclosure
Schedule;

(xi) extend an offer of employment to a candidate for an officer position of
vice president or above or any position with annual compensation equal to or
greater than $150,000 without prior consultation with Parent;

(xii) except (i) in the ordinary course of business, or (ii) as provided for in
Exhibit I, or (iii) as required by Law, or (iv) as permitted by
Section 6.01(a)(x) and/or 6.01(a)(xi) or any Employee Plan of Business Plan in
effect as of the date of this Agreement and disclosed in the Disclosure
Schedule, adopt or pay, accelerate, increase or accrue salary or other payments
or benefits or promise or make discretionary employer contributions to, under,
or with respect to any pension, profit-sharing, bonus, extra compensation,
incentive, deferred compensation, group insurance, severance pay, retirement, or
other employee benefit plan, agreement, or

 

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arrangement, or any employment or consulting agreement with or for the benefit
of any Business Employee, or consultant to the Business, or amend any such
existing plan, agreement, or arrangement;

(xiii) agree to take any of the foregoing actions.

(b) Except as required by applicable Law or as otherwise contemplated by or
necessary to effectuate the Transaction Agreements, including consummation of
the Permitted Financing (if any), and except for matters identified on
Schedule 6.01(b), during the Pre-Closing Period unless Seller otherwise consents
in advance (which consent shall not be unreasonably withheld, conditioned or
delayed), Parent will, and will cause its Subsidiaries (including Buyer) to,
conduct their businesses in the ordinary course of business consistent with past
practice. Without limiting the foregoing, except as required by applicable Law
or as otherwise contemplated by or necessary to effectuate the Transaction
Agreements, including consummation of the Permitted Financing (other than with
respect to Sections 6.01(b)(i) and (b)(ix)-(xi)), and except for matters
identified on Schedule 6.01(b), during the Pre-Closing Period unless Seller
otherwise consents in advance (which consent shall not be unreasonably withheld,
conditioned or delayed), Parent covenants and agrees that, neither Parent nor
any of its Subsidiaries (including Buyer) shall:

(i) amend or otherwise change its articles of incorporation or bylaws or any
equivalent organizational documents including, for the avoidance of doubt, in
connection with a Permitted Financing (except with respect to the Certificate of
Designation as expressly contemplated herein and for administerial changes for
Subsidiaries);

(ii) issue, sell, pledge, dispose of or encumber any of its or its Subsidiaries’
Equity Interests, or grant to any Person any right to acquire any of its or its
Subsidiaries’ Equity Interests, except (x) in connection with a Permitted
Financing, (y) pursuant to the exercise of Parent Stock Options or settlement of
other awards outstanding as of the Agreement Date or (z) the grant of Parent
Stock Options or other awards under any Parent Stock Plan (and issuances of
Equity Interests pursuant thereto) made to employees, independent contractors,
consultants, or medical doctors in the ordinary course of business consistent
with past practices including in connection with the hiring of new employees,
independent contractors, consultants or medical doctors, in each case under
contract with Parent or Buyer;

(iii) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its Equity
Interests, except for any dividend or distribution by a Subsidiary of Parent to
Parent or to another Subsidiary or Subsidiaries of Parent;

(iv) reclassify, split, combine or subdivide any shares of capital stock of
Parent or redeem, repurchase or otherwise acquire any shares of capital stock of
Parent;

(v) (x) acquire (whether by merger, consolidation or acquisition of stock or
assets or otherwise) any corporation, partnership or other business organization
or division thereof or any assets, in each case (a “Third Party Acquisition”),
other than purchases of inventory and other non-material assets in the ordinary
course of business or pursuant to existing contracts; or (y) sell or otherwise
dispose of (whether by merger, consolidation or sale of stock or assets or
otherwise) any corporation, partnership or other business organization or
division thereof or any assets of Parent or its Subsidiaries, other than sales
or dispositions of finished goods inventory in the ordinary course of business
consistent with past practice;

(vi) implement or adopt any material change in its methods of accounting, except
as may be appropriate to conform to changes in statutory or regulatory
accounting rules or GAAP or regulatory requirements with respect thereto;

(vii) agree to any exclusivity, non-competition or similar provision or covenant
restricting Parent, any of its Subsidiaries or any of their respective
Affiliates, from competing in any line of business or with any

 

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Person or in any area or engaging in any activity or business (including with
respect to the development, manufacture, marketing or distribution of their
respective products or services), or pursuant to which any benefit or right
would be required to be given or lost as a result of so competing or engaging,
or which would have any effect on Seller or any of its Affiliates after the
Closing;

(viii) adopt a shareholders rights plan;

(ix) fail to enter into a standstill and lock-up agreement with any Person, or
two or more Persons deemed to be a “group” for purposes of Section 13(d)(3) of
the Exchange Act, if in connection with any Permitted Financing such Person or
Persons beneficially own (as determined for purposes of Rule 13d-3 under the
Exchange Act) twenty percent (20%) or more of the outstanding shares of Common
Stock, which agreement must contain standstill and lock-up provisions which are
no less favorable to Parent than those to be contained in the Investor Rights
Agreement to be entered into at Closing;

(x) grant any registration rights to any Person or reach any agreement,
arrangement or understanding with respect to registration rights with any Person
(including, for the avoidance of doubt, in connection with a Permitted
Financing), other than at Closing pursuant to the Registration Rights Agreement;

(xi) increase or decrease the number of seats on the Parent Board or grant any
Person the right to nominate or appoint any director to the Parent Board
(including, for the avoidance of doubt, in connection with a Permitted
Financing), other than at the Closing pursuant to the Investor Rights Agreement;
or

(xii) agree to take any of the foregoing actions.

Section 6.02 Access to Information.

(a) During the Pre-Closing Period, upon reasonable prior notice, Seller shall,
and shall cause Company or Company Subsidiary to, and Parent shall, and shall
cause Buyer to, (i) afford the Representatives of the other Party reasonable
access, during normal business hours, to its properties, books and records with
respect to the Transactions and (ii) furnish to the Representatives of the other
Party such additional financial and operating data and other information
regarding the Transactions as the other Party or its Representatives may from
time to time reasonably request for purposes of consummating the Transactions.

(b) Notwithstanding anything in this Agreement to the contrary,

(i) (A) in no event shall Seller, Company, Company Subsidiary or their
respective Affiliates be obligated to provide any (1) access or information in
violation of any applicable Law, (2) information with respect to bids, the
identity of any bidder, confidentiality or non-disclosure agreements, letters of
intent, expressions of interest or other proposals received in connection with
transactions comparable to those contemplated by this Agreement or any
information or analysis relating to any such communications, (3) information the
disclosure of which could jeopardize any applicable privilege (including the
attorney-client privilege) available to Seller, Company, Company Subsidiary or
any of their respective Affiliates relating to such information or
(4) information the disclosure of which could cause Seller, Company, Company
Subsidiary or any of their respective Affiliates to breach a confidentiality
obligation to which it is bound, and (B) such investigation shall not
unreasonably interfere with any of the businesses, personnel or operations of
Seller, Company, Company Subsidiary or any of their respective Affiliates or the
Business;

(ii) (A) in no event shall Buyer, Parent or their respective Affiliates be
obligated to provide any (1) access or information in violation of any
applicable Law, (2) information with respect to bids, the identity of any
bidder, confidentiality or non-disclosure agreements, letters of intent,
expressions of interest or other proposals received in connection with
transactions comparable to those contemplated by this Agreement or any
information or analysis relating to any such communications, (3) information the
disclosure of which could

 

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jeopardize any applicable privilege (including the attorney-client privilege)
available to Buyer, Parent or any of their respective Affiliates relating to
such information or (4) information the disclosure of which could cause Buyer,
Parent or any of their respective Affiliates to breach a confidentiality
obligation to which it is bound, and (B) such investigation shall not
unreasonably interfere with any of the businesses, personnel or operations of
Buyer, Parent or any of their respective Affiliates or their businesses;

(iii) the auditors and accountants of Buyer, Parent, or any of their respective
Affiliates shall not be obligated to make any work papers available to any
Person except in accordance with such auditors’ and accountants’ normal
disclosure procedures and then only after such Person has signed a customary
agreement relating to such access to work papers in form and substance
reasonably acceptable to such auditors or accountants;

(iv) the auditors and accountants of Seller, Company, Company Subsidiary, any of
their respective Affiliates or the Business shall not be obligated to make any
work papers available to any Person except in accordance with such auditors’ and
accountants’ normal disclosure procedures and then only after such Person has
signed a customary agreement relating to such access to work papers in form and
substance reasonably acceptable to such auditors or accountants;

(v) neither Parent nor Buyer shall conduct, without the prior written consent of
Seller, which Seller may withhold for any or no reason, any environmental
investigation at any property affiliated with the Business or with Seller,
Company, Company Subsidiary or any of their respective Affiliates, including any
sampling, testing or other intrusive indoor or outdoor investigation of air,
surface water, groundwater, soil or anything else at or in connection with any
property associated or affiliated in any way with the Business, Seller, Company,
Company Subsidiary or any of their respective Affiliates;

(vi) before the Closing, without the prior written consent of Seller, which
Seller may withhold for any or no reason, none of Parent, Buyer nor any of their
respective Representatives shall contact any employees of, suppliers to, or
customers of, Seller, Company, Company Subsidiary (except for customers which
are also customers of Parent or Buyer) or any of their respective Affiliates or
Representatives in connection with or with respect to this Agreement, any other
Transaction Agreement or any Transaction, or to otherwise discuss the business
or operations of Company, Company Subsidiary or the Business. Notwithstanding
the forgoing, Buyer and Seller agree to develop a list of approved talking
points that can be used with common customers of Buyer and Seller, who may
inquire of Buyer or Seller the impact of the Transaction on their ongoing
relationship with Buyer or Seller, and will instruct their field sales forces
and any other Representatives to only speak to matters contained in and in
accordance with such script;

(vii) Seller shall not be required, before the Closing, to disclose, or cause or
seek to cause the disclosure of, to Parent, Buyer or their respective Affiliates
or Representatives (or provide access to any properties, books or records of
Seller or any of its Affiliates that would reasonably be expected to result in
the disclosure to such persons or others of) any confidential information
relating to Trade Secrets, proprietary know-how, processes or patent, trademark,
trade name, service mark or copyright applications or product development, or
pricing and marketing plans, nor shall Seller be required to permit or cause or
seek to cause others to permit Parent, Buyer or their respective Affiliates or
Representatives to have access to or to copy or remove from the properties of
Seller or any of its Affiliates any documents, drawings or other materials that
might reveal any such confidential information.

(c) If so requested by Seller, Parent and/or Buyer shall enter into a mutually
satisfactory customary joint defense agreement or common interest agreement with
Seller, Company, Company Subsidiary or their respective Affiliates with respect
to any information provided to Parent or Buyer, or to which Parent or Buyer gain
access, pursuant to this Section 6.02.

Section 6.03 Confidentiality. The terms of the Confidentiality Agreement are
incorporated into this Agreement by reference and shall continue in full force
and effect (and all obligations thereunder shall be

 

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binding upon Parent and its Representatives as if parties thereto) until the
Closing, at which time the obligations under the Confidentiality Agreement shall
terminate; provided, however, that Parent’s confidentiality obligations shall
terminate only in respect of that portion of the Evaluation Material (as defined
in the Confidentiality Agreement) exclusively relating to Company, Company
Subsidiary or the Business, and for all other Evaluation Material and Notes (as
defined in the Confidentiality Agreement) the Confidentiality Agreement shall
continue in full force and effect in accordance with its terms. If for any
reason the Closing does not occur, the Confidentiality Agreement shall continue
in full force and effect in accordance with its terms.

Section 6.04 Regulatory and Other Authorizations; Consents.

(a) Each of Parent and Buyer shall use commercially reasonable efforts, and
shall cause their respective Affiliates to use commercially reasonable efforts,
to (i) promptly obtain all Consents, Permits and Orders of all Government
Authorities that may be, or become, necessary or appropriate for its execution
and delivery of, and performance of its obligations pursuant to, the Parent
Transaction Agreements (including the consummation of the Parent Transactions)
and the Buyer Transaction Agreements (including the consummation of the Buyer
Transactions) (collectively, the “Government Approvals”) and all applicable
consents required by the NASDAQ Rules for the Stock Issuance, (ii) promptly
secure the issuance, reissuance or transfer of all licenses and Permits,
including Environmental Permits, that may be or become necessary or appropriate
to operate the Business following the consummation of the Transactions;
(iii) take all such actions as may be requested by any such Government Authority
to obtain such Government Approvals, licenses and Permits and (iv) avoid the
entry of, or effect the dissolution of, any permanent, preliminary or temporary
Order, that would otherwise have the effect of preventing or materially delaying
the consummation of the Transactions. Seller will cooperate with the reasonable
requests of Buyer and Parent in seeking promptly to obtain all such Government
Approvals and the issuance, reissuance or transfer of such licenses and Permits,
provided that such required efforts shall not include any obligation to agree to
or to implement any divestiture of any assets or business operations, or any
restraint or limitation upon the business operations of Buyer, Parent or Seller.

(b) Seller and Buyer shall make appropriate filings of notification and report
forms pursuant to the HSR Act with respect to the Transactions as promptly as
reasonably practicable after the Agreement Date and will supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act. In addition, each Party agrees to make
promptly (and in any event within the required time periods for filing under
applicable Law) any filing that may be required by Law with respect to the
Transactions under any other Antitrust Law, and respond as promptly as
practicable to any inquiries or requests for additional information and
documentary material received from any Government Authority in connection
therewith. Neither Party shall (i) agree to extend any waiting period or agree
to refile under any Antitrust Law or (ii) enter into any agreement with any
Government Authority agreeing not to consummate the Transactions, in each case
except with the prior written consent of the other Party, which consent shall
not be unreasonably withheld, conditioned or delayed. Buyer shall have sole
responsibility for the payment of all filing fees associated with Buyer’s HSR
Act filings and any other similar filings required under applicable Antitrust
Laws in any other jurisdictions. Seller shall have sole responsibility for the
payment of all filing fees associated with Seller’s HSR Act filings and any
other similar filing required under applicable Antitrust Laws in any other
jurisdictions.

(c) Parent and Buyer, on the one hand, and Seller, on the other hand, shall
promptly notify the other of any oral or written communication it receives from
any Government Authority relating to the matters that are the subject of this
Section 6.04, where practicable permit the other and its or their
Representatives to review in advance and to receive copies of any communication
proposed to be made by such Party to any Government Authority and provide the
other with copies of all correspondence, filings (other than the initial HSR Act
filings) or other communications between them or any of their Representatives,
on the one hand, and any Government Authority or members of its staff, on the
other hand, subject to Section 6.02(b)(vii). Parent and Buyer, on the one hand,
and Seller, on the other hand, shall not agree to participate in any meeting or
discussion with any Government Authority in respect of any such filings,
investigation or other inquiry unless it consults with the other in advance
where practicable and, to the extent permitted by such Government Authority,
where practicable

 

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gives the other the opportunity to attend and participate at such meeting.
Subject to the Confidentiality Agreement and to Section 6.02(b)(vii), the
Parties will coordinate and cooperate fully with each other in exchanging such
information and providing such assistance as the other Parties may reasonably
request in connection with the foregoing and in seeking termination or
expiration of any applicable waiting periods under the HSR Act and where
practicable any other applicable Antitrust Law. Nothing in this Section 6.04(b)
shall be applicable to Tax matters.

(d) Without limiting any other provision contained in this Section 6.04, Parent
and Buyer shall use best efforts to resolve such objections, if any, as may be
asserted by any Government Authority with respect to the Transactions under the
HSR Act and any other applicable Antitrust Law.

(e) At the request of Seller, Buyer shall contest, and shall cause its
Affiliates to contest, until it becomes final and nonappealable,
administratively or in court, any ruling, Order or other Action of any
Government Authority or any other Person challenging the Transactions, provided
that such required efforts shall not include any obligation to agree to or to
implement any divestiture of any assets or business operations, or any restraint
or limitation upon the business operations of Buyer, Parent, Company, Company
Subsidiary, or Seller.

(f) Parent shall not, and shall not permit any of its Affiliates to, take any
action (including acquiring or agreeing to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity in, or
by any other manner, any Person or portion thereof, or otherwise acquiring or
agreeing to acquire any assets) that would reasonably be expected to have the
effect of (i) delaying, impairing or impeding the receipt of any required
Government Approval or the issuance, reissuance or transfer of any Environmental
Permit; (ii) delaying, impairing or impeding the expiration or termination of
any applicable waiting period with respect to a Government Approval; or
(iii) otherwise delaying the consummation of the Transactions.

(g) Prior to the expiration or earlier termination of the applicable waiting
period imposed under the HSR Act for the Transactions, Seller shall not, and
shall not permit any of its Affiliates to, acquire (directly or indirectly) such
number of shares of Common Stock that would require either (i) an amendment to
Seller’s HSR Act filings for the Transactions or (ii) any additional filing
under the HSR Act.

(h) Each Party agrees to cooperate to obtain any other consents and approvals
from any third person other than a Government Authority that may be required in
connection with the Transactions (“Required Third Party Consents”).
Notwithstanding anything in this Agreement to the contrary, neither Seller nor
any of its Affiliates shall be required to compensate any third party, commence
or participate in any Action or offer or grant any accommodation (financial or
otherwise) to any third party to obtain any such Required Third Party Consent.
For the avoidance of doubt, unless otherwise expressly provided for in this
Agreement, no representation, warranty or covenant of any Party contained in the
Transaction Agreements shall be breached or deemed breached, and no condition
shall be deemed not satisfied by such Party, based on (i) the failure to obtain
any Required Third Party Consents or (ii) any Action commenced or threatened by
or on behalf of any Person arising out of or relating to the failure to obtain
any such Required Third Party Consents.

(i) Notwithstanding anything in this Agreement to the contrary (including
Section 6.01), Parent acknowledges on behalf of itself and its Affiliates and
its and their Representatives, successors and assigns that the operation of the
Business shall remain in the dominion and control of Seller until the Closing
and that none of Parent, any of its Affiliates or its or their respective
successors or assigns will provide, directly or indirectly, any directions,
orders, advice, aid, assistance or information to any director, officer,
Business Employee or other employee of Seller, Company or Company Subsidiary,
except as specifically contemplated or permitted by this Article VI or as
otherwise consented to in writing in advance by an executive officer of Seller.

Section 6.05 Stockholder Approval.

(a) Parent shall take all action necessary under Applicable Law and the articles
of incorporation and bylaws of Parent to establish a record date, duly call,
give notice of, convene and hold a meeting of the holders of

 

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Common Stock to approve the Proposals (the “Parent Stockholder Meeting”). The
Parent Stockholder Meeting shall be held on a date selected by Parent in
consultation with Seller as promptly as practicable, and in any event (to the
extent permissible under Applicable Law) the Original Date shall be within
forty-five (45) days following the date on which the definitive Proxy Statement
is mailed by Parent to the holders of Common Stock for the purpose of obtaining
the Parent Stockholder Approval pursuant to this Section 6.05. Parent shall
(i) ensure that the Parent Stockholder Meeting is called, noticed, convened,
held and conducted, and that all Persons solicited in connection with Parent
Stockholder Meeting are solicited, in compliance with all Applicable Law and
(ii) use reasonable best efforts to solicit from its stockholders proxies in
favor of the Proposals, including such other actions as are required by
Applicable Law. The Proposals shall be the only matters which Parent shall
propose to be acted on by Parent’s stockholders at the Parent Stockholder
Meeting unless otherwise approved in writing by Seller. Parent shall retain a
nationally recognized proxy soliciting firm reasonably acceptable to Seller,
which proxy soliciting firm shall assist Parent in obtaining the Parent
Stockholder Approval.

(b) Parent shall consult with Seller regarding the date of the Parent
Stockholder Meeting and shall not postpone or adjourn the Parent Stockholder
Meeting without the prior written consent of Seller (such consent not to be
unreasonably withheld, conditioned or delayed); provided, however, if on the
date for which the Parent Stockholder Meeting is scheduled (the “Original
Date”), Parent has not received proxies representing a sufficient number of
shares for the Parent Stockholder Approval, whether or not a quorum is present,
Seller shall have the right to require Parent, and, upon the exercise by Seller
of such, Parent shall postpone or adjourn the Parent Stockholder Meeting to a
date which shall not be more than ten (10) days after the Original Date. If
Parent continues not to receive proxies representing a sufficient number of
shares for the Parent Stockholder Approval, whether or not a quorum is present,
Parent may, in its sole discretion, make one or more successive postponements or
adjournments of the Parent Stockholder Meeting as long as the date of the Parent
Stockholder Meeting is not postponed or adjourned to a date beyond the Outside
Date (as defined in Section 11.01(d)) in reliance on this subsection.

(c) The Proxy Statement shall include the Parent Board Recommendation and the
Parent Board Recommendation shall not be withdrawn, modified or qualified, and
no resolution by the Parent Board or any committee thereof to withdraw, modify
or qualify the Parent Board Recommendation shall be adopted or proposed, except
to the extent that the Parent Board shall have effected an Adverse
Recommendation Change in accordance with Section 6.12(g).

(d) Parent agrees that, unless this Agreement has been terminated in accordance
with Section 11.01, its obligations under this Section 6.05 and under
Section 6.06 shall not be affected by the commencement, public proposal, public
disclosure or communication to Parent of any Parent Acquisition Proposal or by
the effecting of an Adverse Recommendation Change by the Parent Board.

Section 6.06 Proxy Statement.

(a) As promptly as practicable after the date of this Agreement and in any event
within ten (10) days (subject to Section 6.06(b)) after the date of this
Agreement, Parent shall prepare, in consultation with Seller, and cause to be
filed with the SEC a preliminary proxy statement to be sent to the stockholders
of Parent relating to the Parent Stockholder Meeting (together with any
amendments or supplements thereto, the “Proxy Statement”), and use its
reasonable best efforts, in consultation with Seller, to:

(i) obtain and furnish the information required to be included by the SEC in the
preliminary Proxy Statement;

(ii) respond promptly to any comments made by the SEC or its staff with respect
to the preliminary Proxy Statement;

(iii) cause a definitive Proxy Statement (together with any amendments and
supplements thereto) to be mailed to its stockholders containing all information
required under applicable Law to be

 

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furnished to Parent’s stockholders in connection with the Proposals in
connection with the Parent Stockholder Meeting to be called by Parent in
accordance with Section 6.05. Such definitive Proxy Statement shall be mailed by
Parent to the holders of Common Stock as promptly as practicable (and in any
event within five (5) Business Days) following the later of (i) receipt and
resolution of the SEC comments on the preliminary Proxy Statement and (ii) the
expiration of the 10-day waiting period provided in Rule 14a-6(a) promulgated
under the Exchange Act;

(iv) promptly amend or supplement any information contained in the preliminary
or definitive Proxy Statement (including any amendments or supplements thereof)
if and to the extent that it shall have become false or misleading in any
material respect and take all steps necessary to cause the Proxy Statement as so
amended or supplemented to be filed with the SEC and to be disseminated to
Parent’s stockholders, in each case as and to the extent required by Applicable
Law; and

(v) cause the preliminary and definitive Proxy Statement, on each relevant
filing date, on the date of mailing to Parent’s stockholders and at the time of
the Parent Stockholder Meeting, not to 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 therein, in light of the
circumstances under which they are made, not misleading, and cause the Proxy
Statement to comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations promulgated thereunder.

(b) Seller and its counsel shall be given two (2) Business Days to comment on
the preliminary and the definitive Proxy Statement and any amendment or
supplement to the preliminary or the definitive Proxy Statement, as the case may
be, each time before any such document is filed with the SEC, and Parent shall
give reasonable and good faith consideration to any comments made by Seller and
its counsel. Seller shall furnish to Parent the information concerning Seller,
Company and Company Subsidiary required by the Exchange Act and the rules and
regulations promulgated thereunder to be set forth in the Proxy Statement in
accordance with the first sentence of this Section 6.06(b) and shall otherwise
reasonably assist and cooperate with Parent in the preparation of the Proxy
Statement and the resolution of comments from the SEC (or the staff of the SEC).
In the event that such information required by the Exchange Act to be included
in the preliminary Proxy Statement is not furnished to Parent within two
(2) Business Days of receipt of the preliminary Proxy Statement by Seller, then
the ten (10) day time frame set forth in Section 6.06(a) shall be extended
correspondingly (on a day-to-day basis). Parent shall (i) provide Seller and its
counsel with (a) any comments or other communications, whether written or oral,
that Parent or its counsel may receive from time to time from the SEC or its
staff with respect to the Proxy Statement promptly, and in any event within
twenty-four (24) hours after receipt of those comments or other communications
and (b) a reasonable opportunity to participate in the response of Parent to
those comments and to provide comments on that response (to which reasonable and
good faith consideration shall be given), including by participating with Parent
or its counsel in any discussions or meetings with the SEC or its staff, and
(ii) keep Seller reasonably informed as to the status of such comments and the
resolution thereof with the SEC or its staff.

Section 6.07 Shared Contracts. Notwithstanding anything to the contrary in the
Transaction Agreements, except as otherwise provided on Schedule 6.07, Seller
and its Affiliates (other than Company and Company Subsidiary) shall retain, and
Seller or its Affiliates may take (or cause) any and all actions prior to the
Closing that may be necessary to effectuate such retention of, any Shared
Contract. Notwithstanding anything to the contrary contained herein, in no event
shall Seller or any of its Affiliates be required to obtain any Consent or in
connection with any action taken (or caused) pursuant to this Section 6.07.

Section 6.08 Intercompany Obligations. Seller shall take such action and make
such payments as may be necessary so that, as of the Closing Date, there shall
be no intercompany obligations (other than (a) pursuant to the Transaction
Agreements, (b) as reflected in the Estimated Working Capital Statement or
(c) as set forth on Schedule 6.08) between Company, Company Subsidiary, or CPS,
on the one hand, and Seller and its Affiliates, on the other hand.

 

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Section 6.09 Other Transaction Agreements. At or before the Closing, Seller (or
an Affiliate of Seller to which Seller has assigned its Obligations under this
Agreement in accordance with Section 13.06), and Parent or Buyer (or an
Affiliate of Parent or Buyer, respectively, to which Parent or Buyer,
respectively, has assigned its Obligations under this Agreement in accordance
with Section 13.06) shall execute and deliver:

(a) The Lockup Agreements;

(b) the MultiOmyx License Agreement, in the form attached hereto as Exhibit E
(the “MultiOmyx License Agreement”);

(c) the Transition Services Agreement, in the form attached hereto as Exhibit F,
(the “Transition Services Agreement”);

(d) the Investor Rights Agreement, in the form attached hereto as Exhibit G (the
“Investor Board Rights, Lock-up & Standstill Agreement”); and

(e) the Registration Rights Agreement, in the form attached hereto as Exhibit H
(the “Registration Rights Agreement”).

Section 6.10 Cooperation. During the Pre-Closing Period, (a) each Party shall,
and shall cause their respective Affiliates to, (i) refrain from taking any
actions that would reasonably be expected to impair, delay or impede the Closing
and (ii) without limiting the foregoing, use reasonable best efforts to cause
their respective Closing Conditions to be met as promptly as practicable and in
any event on or before the Outside Date (including the filing by Parent of the
Certificate of Designation) and (b) each Party shall keep the other reasonably
apprised of the status of the matters relating to the completion of the
Transactions, including with respect to the negotiations relating to the
satisfaction of the Closing Conditions.

Section 6.11 Financing.

(a) During the Pre-Closing Period, subject to the limitations set forth below,
and unless otherwise agreed by Buyer, Seller will instruct the management of
Company and Company Subsidiary to use their commercially reasonable efforts to
cooperate with Buyer as reasonably requested by Buyer in connection with Buyer’s
arrangement of any debt financing to be consummated contemporaneous with the
Closing in respect of the Transactions; provided, however, that such cooperation
does not (i) interfere with the normal operations of the Business; (ii) include
any actions that Company, Company Subsidiary or Seller reasonably believes could
(A) result in a violation of any contract or confidentiality agreement or the
loss of any legal or other privilege or (B) cause any representation or warranty
in the Transaction Agreements to be breached or any Closing Condition to fail to
be satisfied; (iii) involve approaching landlords or any other bailees or other
third parties prior to Closing to discuss landlord waivers, leasehold mortgages,
bailee waivers, estoppels or other agreements limiting the rights of such third
parties; (iv) involve consenting to the pre-filing of UCC-1s or any other grant
of Liens or other encumbrances that result in Company, Company Subsidiary,
Seller or any Affiliate of Seller being responsible to any third parties for any
representations or warranties prior to the Closing Date; (v) require the giving
of representations or warranties to any third parties or the indemnification
thereof; (vi) require the delivery of any projections or pro forma financial
information to any third parties other than as expressly contemplated in
Section 6.19 or previously provided to Buyer on or prior to the Agreement Date;
or (vii) require the delivery of any financial statements in a form or subject
to a standard different than those provided to Buyer on or prior to the
Agreement Date. Subject to the limitations set forth in this Section 6.11(a),
such cooperation will include using commercially reasonable efforts to make
appropriate officers of Company and Company Subsidiary available for
participation in a reasonable number of meetings and due diligence sessions,
assistance in the preparation of offering memoranda, private placement memoranda
and similar documents, the execution and delivery of any definitive financing
documents as may be reasonably requested by Buyer or any prospective lender to
Buyer, seeking to arrange for customary payoff letters, lien terminations and
instruments of discharge to

 

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be delivered at Closing providing for the payoff, discharge and termination on
the Closing Date of all indebtedness required under this Agreement to be paid
off, discharged and terminated at Closing, using commercially reasonable efforts
to obtain the assistance of the independent accountants of Seller, Company
and/or Company Subsidiary to provide reasonable and customary assistance and
cooperation in connection with the Financing, including (A) participating in a
reasonable number of drafting sessions and accounting due diligence sessions and
(B) providing consents for use of their reports in any materials relating to the
Financing, and providing all documentation and other information required by
bank regulatory authorities under applicable “know-your-customer” and anti-money
laundering rules and regulations, including the Patriot Act, that has been
reasonably requested by Buyer or a Financing Source not less than ten
(10) Business Days prior to the Closing Date; provided, however, neither Seller,
Company, Company Subsidiary nor any Affiliate of Seller shall be required to
deliver or cause the delivery of any legal opinions or accountants’ comfort
letters or reliance letters. Buyer agrees that the effectiveness of any
documents executed by or on behalf of Company or Company Subsidiary in
connection with the Financing shall be subject to, and not effective until, the
consummation of the Closing. As a condition to Seller’s obligations pursuant to
this Section 6.11(a), Buyer shall promptly, upon request by Seller, reimburse
Seller for all reasonable out-of-pocket costs and expenses (including attorney’s
fees and expenses and disbursements) incurred by Seller or any Affiliate of
Seller in connection with the cooperation contemplated by this Section 6.11(a)
and shall reimburse, defend, indemnify and hold harmless any Seller and its
Affiliates from, against and in respect of any and all Losses resulting from, or
that exist or arise due to or in connection with the arrangement of the
Financing and any information used in connection therewith. For the avoidance of
doubt, the indemnification obligations contained in the immediately preceding
sentence will not be subject to limitations of liability contained elsewhere in
this Agreement or any other Transaction Agreement.

(b) Buyer shall use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable to arrange or consummate the Financing at the Closing on the terms
and conditions described in the Commitment Letters, including using commercially
reasonable efforts to (i) comply with and maintain each Commitment Letter in
effect, (ii) negotiate definitive agreements with respect thereto on terms and
conditions contained therein and execute and deliver to Seller complete and
correct copies thereof concurrently with such execution, (iii) comply with and
perform the obligations applicable to it pursuant to the Commitment Letters,
(iv) satisfy on a timely basis all conditions and obligations applicable to
Buyer in such definitive agreements that are within its control, and (v) upon
the satisfaction of the conditions precedent set forth in the Commitment
Letters, consummate the Financing at the Closing (which, for the avoidance of
doubt, shall include agreeing to consummate the Financing even if any flex
rights are exercised to their maximum extent and instructing the Lenders and the
other Persons providing such Financing to provide such Financing upon
satisfaction of such conditions).

(c) If any portion of the Financing becomes unavailable on the terms (including
any flex rights) and conditions contemplated in any Commitment Letter due to a
breach by the Lenders, or otherwise, Buyer shall use commercially reasonable
efforts to arrange to obtain alternative financing for any such portion in an
amount sufficient to consummate the Transactions and perform all of its
obligations hereunder on terms and conditions that are similar, in the
aggregate, than those set forth in the applicable Commitment Letter, from
alternative sources as promptly as practicable following the occurrence of such
event; provided, however, that, without the written consent of Seller, in no
event shall any such alternative financing materially impair or delay beyond the
Outside Date the ability of Buyer or Parent to consummate the Transactions or
otherwise include any conversion rights for Equity Interests of Buyer or any of
its Subsidiaries. If any new Commitment Letter is obtained, (i) any reference in
this Agreement to the “Financing” shall mean the debt financing contemplated by
such Commitment Letter and (ii) any reference in this Agreement to the
“Commitment Letter” shall be deemed to include the original Commitment Letters
to the extent still then in effect or any new Commitment Letter that may be
obtained by Buyer (together with any accompanying fee letter). Buyer shall
deliver to Seller, concurrently with the execution thereof, complete and correct
copies of all agreements pursuant to which any such alternative source shall
have committed to provide Buyer with any portion of the Financing concurrently
with the execution thereof.

 

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(d) Buyer shall keep Seller informed on a reasonably current basis in reasonable
detail of the status of its efforts to arrange the Financing. Buyer shall not
permit any replacement, or material supplement, amendment or modification to be
made to, or any material waiver of any provision or remedy under, any Commitment
Letter without obtaining Seller’s prior written consent, which consent shall not
be unreasonably conditioned, delayed or withheld. For the avoidance of doubt,
Buyer shall be entitled to enter into supplements, amendments or modifications
to any Commitment Letter that do not impact any lender’s commitment to provide
the Financing on the Closing Date or change any material conditions related to
such Financing or otherwise materially impair or delay the ability of Buyer or
Parent to consummate the Transactions. Upon any permitted amendment, supplement,
modification or replacement of any Commitment Letter in accordance with this
Section 6.11(d), the term “Commitment Letters” shall mean any and all commitment
letters as may be provided from all sources of Financing as so amended,
supplemented, modified or replaced, and references to “Financing” and/or any
alternative financing therefor shall include the financing contemplated by any
Commitment Letter as so amended, supplemented, modified or replaced.

(e) Buyer shall provide Seller prompt (but in any event, within two (2) Business
Days) notice (i) upon becoming aware of any breach, default, repudiation,
cancellation or termination (or any event or circumstance that, with or without
notice, lapse of time or both, could reasonably be expected to give rise to any
breach, default, repudiation, cancellation or termination) by any party to any
Commitment Letter or such other agreements or documents (including any
definitive agreements) relating to the Financing or any termination of a
Commitment Letter or such other agreements or documents (including any
definitive agreements) relating to the Financing, (ii) upon receipt by Buyer or
any of its Affiliates or Representatives of any notice or other communication of
any such breach, default, repudiation, cancellation or termination, (iii) of any
dispute or disagreement between or among the parties to any Commitment Letter or
the definitive documents related to the Financing with respect to the obligation
to fund any of the Financing or the amount of the Financing to be funded at the
Closing, and (iv) if for any reason Buyer believes in good faith that it will
not be able to obtain all or any portion of the Financing on the terms, in the
manner or from the sources contemplated by any Commitment Letter or the
definitive documents related to the Financing in any manner which may or will
impair, delay or prevent the consummation of the Transactions. As soon as
reasonably practicable, but in any event within two (2) Business Days after the
date Seller delivers Buyer a written request, Buyer shall provide any
information reasonably requested by Seller relating to any circumstance referred
to in clause (i), (ii) or (iii) of the immediately preceding sentence.

(f) The condition set forth in Section 10.02(a)(ii), as it applies to any
obligations of Seller or any of its Affiliates under this Section 6.11, shall be
deemed satisfied if any such Person’s breach(es), if any, of its obligations
under this Section 6.11 did not cause the failure of the Financing to be
obtained.

Section 6.12 No Solicitation; Exclusivity.

(a) Except for the Financing Discussions, Parent shall, and shall cause each of
its Subsidiaries and Affiliates and each of its and their Representatives to,
immediately cease and cause to be terminated any and all existing activities,
discussions or negotiations with any Persons (other than Seller and its
Representatives) conducted on or prior to the Agreement Date with respect to any
Parent Acquisition Proposal, and shall promptly after the Agreement Date
instruct each Person that has in the twelve months prior to the Agreement Date
executed a confidentiality agreement relating to a Parent Acquisition Proposal
with or for the benefit of Parent or any of its Subsidiaries to promptly return
or destroy, in accordance with the terms of such confidentiality agreement, all
information, documents and materials relating to the Parent Acquisition Proposal
or to Parent or any of its Subsidiaries and their business previously furnished
by or on behalf of Parent or any of its Subsidiaries or any of their
Representatives to such Person or such Person’s Representatives. Parent shall
not terminate, waive, amend or modify any provision of, or grant permission
under, any standstill or confidentiality agreement to which Parent or any of its
Subsidiaries is a party, and Parent or any of its Subsidiaries shall enforce the
provisions of each such agreement.

(b) Seller shall, and shall cause each of its Subsidiaries and Affiliates and
each of its and their Representatives to, immediately cease and cause to be
terminated any and all existing activities, discussions or

 

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negotiations with any Persons (other than Parent and Buyer and their
Representatives) conducted on or prior to the Agreement Date with respect to any
Company Acquisition Proposal, and shall promptly after the Agreement Date
instruct each Person that has in the twelve (12) months prior to the Agreement
Date executed a confidentiality agreement relating to a Company Acquisition
Proposal with or for the benefit of Seller or any of its Subsidiaries to
promptly return or destroy, in accordance with the terms of such confidentiality
agreement, all information, documents and materials relating to the Company
Acquisition Proposal or to Company and the Business previously furnished by or
on behalf of Seller or Company or any of their Representatives to such Person or
such Person’s Representatives. Neither Seller nor its Affiliates shall
terminate, waive, amend or modify any provision of, or grant permission under,
any standstill or confidentiality agreement to which Seller or any of its
Affiliates is a party, and Seller or any of its Affiliates shall enforce the
provisions of each such agreement.

(c) Except as set forth in Section 6.12(e) through Section 6.12(j), Parent
agrees that neither it nor any of its Subsidiaries shall, and that it shall
cause each of its and their Representatives and each of its Affiliates (and each
of their respective Representatives) not to, directly or indirectly:
(i) solicit, initiate, seek or knowingly encourage, facilitate, induce or
support, or take any action to solicit, initiate, seek or knowingly encourage,
facilitate, induce or support any announcement, communication, inquiry,
expression of interest, proposal or offer that constitutes or that could
reasonably be expected to lead to, a Parent Acquisition Proposal from any Person
(other than Seller, its Affiliates and their Representatives); (ii) enter into,
participate or engage in, maintain or continue any discussions or negotiations
relating to, any Parent Acquisition Proposal with any Person (other than Seller,
its Affiliates and their Representatives); (iii) provide or cause to be provided
to any Person (other than Seller, its Affiliates and their Representatives) any
non-public information or data relating to Parent or any of its Subsidiaries, in
connection with, or with or for the purpose of encouraging or facilitating, a
Parent Acquisition Proposal or that could reasonably be expected to be used for
the purposes of formulating any inquiry, expression of interest, proposal or
offer relating to a Parent Acquisition Proposal from a Person; (iv) approve,
endorse or recommend, or publicly propose to approve, endorse or recommend, or
execute or enter into any letter of intent, agreement in principle, merger
agreement, acquisition agreement, arrangement or other agreement relating to a
Parent Acquisition Proposal or that could reasonably be expected to lead to a
Parent Acquisition Proposal, or enter into any agreement or agreement in
principle requiring Parent or Buyer to abandon, terminate or fail to consummate
the Transactions contemplated hereby or breach their respective obligations
hereunder; or (v) submit any Parent Acquisition Proposal or any matter related
thereto to the vote of the stockholders of Parent. For the avoidance of doubt,
nothing herein shall prevent Parent from holding Financing Discussions;
provided, that neither Parent nor Buyer may publicly propose to approve, endorse
or recommend, or execute or enter into any letter of intent, agreement in
principle, subscription agreement, arrangement or other agreement relating to a
Financing Discussion without Seller’s prior written consent, which shall not be
unreasonably conditioned, delayed or withheld.

(d) Seller agrees that neither it nor any of its Subsidiaries shall, and that it
shall cause each of its and their Representatives and each of its Affiliates
(and each of their respective Representatives) not to, directly or indirectly:
(i) solicit, initiate, seek or knowingly encourage, facilitate, induce or
support, or take any action to solicit, initiate, seek or knowingly encourage,
facilitate, induce or support any announcement, communication, inquiry,
expression of interest, proposal or offer that constitutes or that could
reasonably be expected to lead to, a Company Acquisition Proposal from any
Person (other than Parent and Buyer and their Affiliates and their
Representatives); (ii) enter into, participate or engage in, maintain or
continue any discussions or negotiations relating to, any Company Acquisition
Proposal with any Person (other than Parent and Buyer and their Affiliates and
their Representatives); (iii) provide or cause to be provided to any Person
(other than Parent and Buyer and their Affiliates and their Representatives) any
non-public information or data relating to Company, in connection with, or with
or for the purpose of encouraging or facilitating, a Company Acquisition
Proposal or that could reasonably be expected to be used for the purposes of
formulating any inquiry, expression of interest, proposal or offer relating to a
Company Acquisition Proposal from a Person; (iv) approve, endorse or recommend,
or publicly propose to approve, endorse or recommend, or execute or enter into
any letter of intent, agreement in principle, merger agreement, acquisition
agreement, arrangement or other agreement relating to a Company Acquisition
Proposal or that could reasonably be expected to lead to a Company Acquisition
Proposal, or enter

 

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into any agreement or agreement in principle requiring Seller, Company or
Company Subsidiary to abandon, terminate or fail to consummate the Transactions
contemplated hereby or breach their respective obligations hereunder; or
(v) submit any Company Acquisition Proposal or any matter related thereto to the
vote of the stockholders of Company.

(e) Notwithstanding anything to the contrary in Section 6.12(c), at any time
prior to obtaining the Parent Stockholder Approval, if (i) Parent receives an
unsolicited bona fide written Parent Acquisition Proposal from a Person which
was made on or after the date of this Agreement and did not result from any
breach of this Section 6.12, and (ii) the Parent Board (x) determines in good
faith (after consultation with Parent’s outside legal counsel and financial
advisors) that such Parent Acquisition Proposal constitutes or would reasonably
be expected to lead to a Superior Proposal and (y) determines in good faith
(after consultation with Parent’s outside legal counsel) that the failure to do
so would reasonably be expected to constitute a breach of the directors’
fiduciary duties under Applicable Law, then Parent may (A) furnish information
with respect to Parent and its Subsidiaries to the Person making such Parent
Acquisition Proposal and (B) participate in discussions or negotiations with
such Person and its Representatives regarding such Parent Acquisition Proposal;
provided, however, that Parent will not, and will not permit its Subsidiaries or
its or their Representatives to, furnish any information or enter into, maintain
or participate in any such discussions or negotiations except pursuant to a
customary confidentiality and standstill agreement on terms no less restrictive
than those contained in the Confidentiality Agreement (except for any changes
specifically necessary in order for Parent to be able to comply with its
obligations under this Agreement and the inclusion of a customary standstill
provision); provided, further, however, that Parent shall provide (or provide
access) to Seller and Company the information, including the properties, assets,
books, records and other information of Parent and its Subsidiaries, as provided
to such Person, and that was not previously provided to Seller, at or prior to
the time such information or data is provided to such Person.

(f) Parent shall promptly (and in any event within 24 hours after notice is
received by Parent) advise Seller in writing of (i) any inquiries, proposals or
offers regarding any Parent Acquisition Proposal received by Parent or its
Subsidiaries or any of their Representatives, (ii) any request to Parent or its
or its Subsidiaries or any of their Representatives for non-public information
relating to Parent or its Subsidiaries, other than requests for information not
reasonably expected to be related to a Parent Acquisition Proposal, and
(iii) any inquiry or request made to Parent or its Subsidiaries or any of their
Representatives to discuss or negotiate a Parent Acquisition Proposal or any
inquiry or request which Parent reasonably believes could lead to a Parent
Acquisition Proposal, which notification shall include, in each case, the
identity of the Person making any such inquiry, request or Parent Acquisition
Proposal, and copies of any written materials provided in connection therewith
and summaries of any material terms of any such Parent Acquisition Proposal
conveyed verbally.

(g) Except as set forth in this Section 6.12(g), Section 6.12(h) and
Section 6.12(i), neither the Parent Board nor any committee thereof shall
(i) withdraw, change, amend, qualify or modify in a manner adverse to Seller or
Company, or publicly propose to withdraw, change, amend, qualify or modify in a
manner adverse to Seller or Company, its Parent Board Recommendation (any of
such actions, an “Adverse Recommendation Change”), (ii) approve or recommend any
Parent Acquisition Proposal, or (iii) publicly propose to take any such actions.
Notwithstanding anything to the contrary in this Section 6.12, if, prior to
obtaining Parent Stockholder Approval, Parent receives a Parent Acquisition
Proposal, with respect to which no breach of Section 6.12 has occurred, and that
the Parent Board or any committee thereof determines in good faith (after
consultation with Parent’s outside legal counsel and financial advisors)
constitutes a Superior Proposal, the Parent Board may effect an Adverse
Recommendation Change; provided, however, that the Parent Board may not effect
an Adverse Recommendation Change pursuant to the preceding clause unless Parent
has first complied with the provision of Section 6.12(h) and, after so
complying, the Parent Board or any committee thereof determines in good faith
(after consultation with Parent’s outside legal counsel) that the failure to do
so would reasonably be expected to constitute a breach of the directors’
fiduciary duties under Applicable Law and that such Parent Acquisition Proposal
continues to constitute a Superior Proposal.

 

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(h) The Parent Board (or any committee thereof) shall not take any action set
forth in Section 6.12(g) unless the Parent Board has first (i) provided written
notice to Seller (a “Notice of Superior Proposal”) advising Seller that the
Parent Board has received a Superior Proposal, which notice shall specify the
material terms and conditions of such Superior Proposal, identify the Person
making such Superior Proposal and include a copy of any relevant transaction
documents (it being understood and agreed that any amendment to the financial
terms or any other material term of such Superior Proposal shall require a new
Notice of Superior Proposal, which shall require a new notice period of two
Business Days, and compliance with this Section 6.12(h) with respect to such new
notice), (ii) negotiated, and caused Parent and its Representatives to
negotiate, during the four Business Day period following Seller’s receipt of the
Notice of Superior Proposal (or two Business Day period following an amended
proposal), as applicable, or if at the time received by Seller there are less
than four Business Days (or two Business Days in connection with an amended
proposal) before the Parent Stockholders Meeting, as much notice as reasonably
practicable (such period, the “Notice Period”), with Seller to enable Seller to
make a counteroffer or propose to amend the terms of this Agreement, and
(iii) after complying with the preceding clauses (i) and (ii), determined in
good faith (after consultation with Parent’s outside legal counsel and financial
advisors), in light of any counteroffer or proposed amendment to the terms of
this Agreement during the Notice Period, that the Superior Proposal continues to
constitute a Superior Proposal.

(i) Nothing set forth in this Agreement shall prevent Parent or the Parent Board
from (i) taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under
the Exchange Act (or any similar communication to stockholders in connection
with the making or amendment of a tender offer or exchange offer) or from
(ii) making any required disclosure to Parent’s stockholders with regard to a
Parent Acquisition Proposal if, in the good faith judgment of the Parent Board,
after consultation with outside counsel, failure to disclose such information
would reasonably be expected to violate its disclosure obligations under
applicable Law; provided, however, that, in either case, any such disclosure
constituting an Adverse Recommendation Change must comply with the provisions of
Section 6.12(g) and Section 6.12(h).

(j) For the avoidance of doubt, and notwithstanding anything to the contrary
herein, in no event shall any Third Party Acquisition constitute, or be deemed
to be, a Superior Proposal.

Section 6.13 Stockholder Litigation. Parent shall (a) keep Seller fully informed
on a current basis regarding any stockholder litigation against Parent or its
directors or officers relating to the transactions contemplated by this
Agreement, whether commenced prior to or after the execution and delivery of
this Agreement, and (b) give Seller the opportunity to participate in the
defense or settlement of any such stockholder litigation.

Section 6.14 No Control of Other Party’s Business. Nothing contained in this
Agreement shall give Parent or Buyer, directly or indirectly, the right to
control or direct Company’s, Company Subsidiary’s or any of their respective
Subsidiaries’ operations prior to the Closing. Prior to the Closing, each of
Company, Company Subsidiary and Parent shall exercise, consistent with the terms
and conditions of this Agreement, complete control and supervision over its and
its Subsidiaries’ respective operations.

Section 6.15 Takeover Laws. If any “fair price,” “moratorium,” “control share
acquisition” or similar takeover Law (collectively, “Takeover Laws”) is or
becomes applicable to this Agreement, the Stock Issuance, the Voting Agreements
or any of the other Transactions contemplated hereby, Parent and the Parent
Board shall take all action necessary to ensure that the Stock Issuance and the
other transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
eliminate or minimize the effect of such Takeover Law on this Agreement, the
Stock Issuance and the other transactions contemplated hereby.

Section 6.16 Notification of Certain Matters. Parent (on behalf of itself and
Buyer) and Seller (on behalf of itself and Company and Company Subsidiary) shall
promptly notify each other of (a) any notice or other communication received by
such party or its Representatives from any Government Authority in connection
with

 

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the transactions contemplated hereby or from any Person alleging that the
consent of such Person is or may be required in connection with the transactions
contemplated hereby, if the subject matter of such communication could be
material to Company, Company Subsidiary, Parent, Buyer or the prompt
consummation of the transactions contemplated hereby, (b) any Action commenced
or, to such party’s knowledge, threatened against, relating to or involving or
otherwise affecting such party or any of its Subsidiaries which relates to or is
reasonably expected to affect the prompt consummation of the transactions
contemplated hereby, (c) the discovery of any fact or circumstance that, or the
occurrence or non-occurrence of any event the occurrence or non-occurrence of
which, has caused or would cause or result in any of the conditions set forth in
Article X not being satisfied or satisfaction of those conditions being
materially delayed, (d) the occurrence or non-occurrence of any event, change,
circumstance, effect or state of facts, individually or in the aggregate, that
has caused or is reasonably likely to cause any representation or warranty
contained in this Agreement of such party to be untrue or inaccurate in any
material respect, or (e) any material failure of Seller, Parent or Buyer, as the
case may be, or any officer, director, employee, agent or Representative of
Seller, Parent or Buyer, as applicable, to comply with any covenant, or
agreement to be complied with under this Agreement; provided, however, that the
delivery of any notice pursuant to this Section 6.16 shall not (i) cure any
breach of, or non-compliance with, any other provision of this Agreement or
(ii) limit the remedies available to the party receiving such notice; provided
further, that failure to give prompt notice pursuant to this Section 6.16 shall
not constitute a failure of a condition set forth in Article X except to the
extent that the underlying fact or circumstance not so notified would, standing
alone, constitute such a failure.

Section 6.17 Parent Guaranty. Parent hereby irrevocably and unconditionally
guarantees to Seller the performance by Buyer of each and every obligation of
Buyer arising out of or related to any Transaction Agreement or in connection
with the consummation of the Transactions, including but not limited to the
payment of the Purchase Price when and as the same may become due and payable
and the punctual and faithful performance, keeping, observance and fulfillment
by Buyer of all of its agreements, conditions, covenants and obligations
pursuant to each of the Transaction Agreements and in connection with the
consummation of the Transactions (the “Parent Guaranty”). This Parent Guaranty
includes obligations arising under successive transactions continuing,
compromising, extending, increasing, modifying, releasing or renewing such
obligations, changing the terms and conditions thereof or creating new or
additional obligations after prior such obligations have been satisfied in whole
or in part. To the maximum extent permitted by law, Parent hereby waives any
right to revoke this Parent Guaranty. This Parent Guaranty is the primary and
original obligation of Parent, is not merely the creation of a surety
relationship, and is an absolute, unconditional and continuing guaranty of
payment and performance which shall remain in full force and effect without
respect to future changes in conditions. Parent agrees that its liability under
this Parent Guaranty shall be immediate and shall not be contingent upon the
exercise or enforcement by Seller of whatever remedies it may have against
Buyer.

Section 6.18 NASDAQ Listing. Parent shall use its reasonable best efforts to
have the Parent Common Stock to be issued to Seller and the Conversion Shares
issuable upon conversion of the Parent Preferred Stock approved for listing on
the NASDAQ Capital Market.

Section 6.19 Additional Financial Statements. If this Agreement has not been
terminated in accordance with its terms prior to November 10, 2015, Seller shall
prepare and deliver to Buyer the combined unaudited balance sheet and the
related statements of operations and cash flows of Company as of September 30,
2015 (the “Interim September Financial Statements”) on or before November 10,
2015. The Interim September Financial Statements shall be prepared in a manner
consistent with the Interim Financial Statements. In the event the Closing takes
place after January 31, 2016 and provided that this Agreement has not been
previously terminated in accordance with its terms, Seller shall prepare and
deliver to Buyer the combined audited balance sheet and the related statements
of operations and cash flows of Company as of December 31, 2015 (the “FY 2015
Financial Statements”) on or before March 15, 2016. The FY 2015 Financial
Statements shall be prepared in a manner consistent with the Audited Financial
Statements and shall be accompanied by an opinion of Company’s independent
auditors.

 

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Section 6.20 Books and Records. During the Pre-Closing Period, Seller and its
Affiliates agree to prepare an inventory of all known Seller Business Records,
and will work in good faith with Representatives of Buyer to develop a plan to
transfer original paper copies of any such Seller Business Records or complete
electronic copies of any electronically stored Seller Business Records to Buyer
after the Closing.

ARTICLE VII

POST-CLOSING COVENANTS

Section 7.01 Access.

(a) From and after the Closing Date, in connection with any reasonable business
purpose, including the preparation of Tax Returns, financial statements, SEC or
bank regulatory reporting obligations, or the determination of any matter
relating to the rights or obligations of Seller or any of its Affiliates under
any Transaction Agreement, upon reasonable prior notice, and except as
determined in good faith to be necessary to (i) ensure compliance with any
applicable Law, (ii) preserve any applicable privilege (including the
attorney-client privilege), or (iii) comply with any contractual confidentiality
obligations, Parent shall, and shall cause each of Buyer, Company, Company
Subsidiary and their respective Affiliates, and their respective Representatives
to (A) afford the Seller and its Representatives and their respective Affiliates
reasonable access, during normal business hours, to the properties, books and
records of Buyer and its Affiliates in respect of Company, Company Subsidiary
and the Business, (B) furnish to Seller and its Representatives and their
respective Affiliates such additional financial and other information regarding
Company, Company Subsidiary, their respective Affiliates and the Business as
Seller or its Representatives may from time to time reasonably request and
(C) make available to Seller and its Representatives and their respective
Affiliates at Seller’s sole expense those employees of Buyer or its Affiliates
whose assistance, expertise, testimony, notes or recollections or presence may
be necessary to assist Seller, its Representatives or their respective
Affiliates in connection with its inquiries for any purpose referred to above,
including the presence of such persons as witnesses in hearings or trials for
such purposes; provided, however, that such investigation shall not unreasonably
interfere with the business or operations of Buyer or any of its Affiliates; and
provided, further, that the auditors and accountants of Buyer or its Affiliates
shall not be obligated to make any work papers available to any Person except in
accordance with such auditors’ and accountants’ normal disclosure procedures and
then only after such Person has signed a customary agreement relating to such
access to work papers in form and substance reasonably acceptable to such
auditors or accountants.

(b) If so requested by Buyer or Parent, on the one hand, or Seller or one of its
Affiliates, on the other hand, Seller or one of its Affiliates, or Buyer, Parent
or one of their respective Affiliates, as the case may be, shall enter into a
customary joint defense agreement or common interest agreement with Parent,
Buyer and their respective Affiliates, or Seller and its Affiliates, as
applicable, with respect to any information to be provided to Seller pursuant to
Section 7.01(a).

Section 7.02 Rights to Seller Names and Seller Marks.

(a) Except as expressly authorized under the Trademark License Agreement,
Parent, Buyer and their respective Affiliates (which, for the purposes of this
Section 7.02, shall include Company and Company Subsidiary) shall cease and
discontinue all uses of the Seller Names and Seller Marks immediately upon the
Closing. Except as expressly authorized under the Trademark License Agreement,
each of Parent and Buyer, for itself and its Affiliates, agrees that the rights
of Company and Company Subsidiary to the Seller Names and Seller Marks pursuant
to the terms of any trademark agreements or otherwise between Seller and its
Affiliates, on the one hand, and Company and Company Subsidiary, on the other
hand, shall terminate on the Closing Date.

(b) Each of Parent and Buyer, for itself and its Affiliates, agrees that after
the Closing Date it and its Affiliates (which, for the purposes of this
Section 7.02, shall include Company and Company Subsidiary) (i) will

 

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not expressly, or by implication, do business as or represent themselves as
Seller or its Affiliates and (ii) with respect to Assets managed, operated or
leased after the Closing Date, will represent to the managers, operators or
lessors of such Assets that such Assets are those of Parent, Buyer or their
respective Affiliates and not those of Seller and its Affiliates and (iii) will
cooperate with Seller or any of its Affiliates in terminating or assigning any
contracts pursuant to which Company or Company Subsidiary license any Seller
Names or Seller Mark to customers or any third party. Each of Parent and Buyer
shall, and shall cause their respective Affiliates to, take all necessary action
to ensure that other users of any Seller Names or Seller Mark shall cease use of
the Seller Names and Seller Marks, except as expressly authorized thereafter
pursuant to the Trademark License Agreement.

(c) Each of Parent and Buyer, for itself and its Affiliates, acknowledges and
agrees that, except to the extent expressly authorized under the Trademark
License Agreement, none of Parent, Buyer nor any of their respective Affiliates
shall have any rights in any of the Seller Names and Seller Marks. None of
Parent, Buyer or any of their respective Affiliates shall contest the ownership
or validity of any rights of Seller or any of its Affiliates in or to any of the
Seller Names and Seller Marks.

(d) Seller and its Affiliates may use the “Clarient” name (including logos and
variations thereof) for ongoing website support and maintenance and as such name
may otherwise be included in existing supplies of promotional materials,
point-of-sale materials, advertising copy, office supplies, documents, purchase
orders, operating manuals, instructional documents and shipping materials, in
any case for a period of ninety (90) days following the Closing Date. Seller,
for itself and its Affiliates, acknowledges and agrees that, except to the
extent expressly authorized pursuant to the immediately preceding sentence,
neither Seller nor any of its Affiliates after the Closing shall have any rights
in the “Clarient” name and shall not contest the ownership or validity of any
rights of Buyer or Parent or any of their Affiliates after the Closing in or to
the “Clarient” name.

Section 7.03 D&O Insurance. As directed by Seller, Parent shall obtain as of the
Closing Date a “tail” insurance policy (the “D&O Tail Policy”) with respect to
Liability of Company’s and Company Subsidiary’s past and present directors,
officers, secretaries and employees. The cost of the D&O Tail Policy shall be
borne by Seller through the calculation of Net Working Capital.

Section 7.04 Insurance.

(a) From and after the Closing Date, Company and Company Subsidiary each shall
cease to be insured by, have access or availability to, be entitled to make
claims on, be entitled to claim benefits from or seek coverage under any of
Seller’s or its Subsidiaries’ or Affiliates’ insurance policies other than the
Transferable Insurance Policies, and, for purposes of this Section 7.04 except
for claims arising from incidents and events prior to the Closing Date that were
properly reported to the relevant insurer prior to the Closing Date.

(b) Notwithstanding Section 7.04(a), with respect to any claim arising from
incidents or events prior to the Closing Date, the Business, Transferred
Employees (as defined in Exhibit I), former employees, Inactive Business
Employees (as defined in Exhibit I), Company or Company Subsidiary that would be
covered by Seller’s (A) third party occurrence-based general liability insurance
policies, (B) workers compensation and any employers’ liability insurance
policies or comparable country programs; and (C) auto liability insurance (the
“Available Insurance Policies”), Company and Company Subsidiary may access, make
claims on, claim benefits from or seek coverage under such policies and programs
for a three-year period concluding on the third anniversary of the Closing Date
(in the case of clause (A) above) or from and after the Closing Date (in the
case of clauses (B) and (C) above), in each case on the terms and subject to the
conditions of such Available Insurance Policies and this Agreement, provided
that:

(i) Company or Company Subsidiary, as applicable, shall report all such claims
or efforts to seek benefits or coverage and shall cooperate with Seller in
pursuing all such claims as per the scheduled notice requirements which have
been provided to Parent and Buyer and shall be solely responsible for notifying
the insurance companies of, and complying with all policy conditions for, such
claims;

 

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(ii) Seller shall have the right but not the duty to monitor or control any
coverage claims or requests for benefits asserted by Company or Company
Subsidiary under the Available Insurance Policies, including the coverage
positions and arguments asserted therein;

(iii) Company and Company Subsidiary shall not, without the written consent of
Seller which consent shall not be unreasonably withheld, (i) erode, exhaust,
settle, release, commute, buy-back or otherwise resolve disputes with respect to
any Available Insurance Policies, or amend, modify or waive any rights under any
such insurance policies and programs or (ii) assign the Available Insurance
Policies or their rights or claims under the Available Insurance Policies.

(c) Notwithstanding anything in this Agreement to the contrary, Seller shall
retain the exclusive right to control all of its insurance policies and programs
(other than the Transferable Insurance Policies), including the Available
Insurance Policies, and the benefits and amounts payable thereunder, including
the right to exhaust, settle, release, commute, buy-back or otherwise resolve
disputes with respect to any of its insurance policies and programs and to
amend, modify or waive any rights under any such insurance policies and
programs, notwithstanding whether any such policies or programs apply to any
Liabilities or claims Company or Company Subsidiary has made or could make in
the future, including coverage claims with respect to claims arising from
incidents or events prior to the Closing Date, provided that Buyer and its
Affiliates shall cause Company and Company Subsidiary each to cooperate with
Seller and share such information as is reasonably necessary to permit Seller to
manage and conduct its insurance matters as Seller deems appropriate and that
Buyer, its Affiliates, Company and Company Subsidiary hereby grant consent for
Seller to inform any affected insurer of the existence of this Agreement and to
provide such insurer with a copy hereof. In addition, Buyer and its Affiliates
shall cause Company and Company Subsidiary to pursue rights of recovery against
third parties with respect to claims or losses for which Company or Company
Subsidiary has the ability to mitigate via contract or tort and shall cooperate
with Seller with respect to pursuit of such rights. The order of priority of any
such recoveries shall inure first to Seller to reimburse any and all costs
incurred by Seller directly or indirectly as a result of such claims or losses.

(d) At Closing, Buyer shall have in effect all insurance programs to comply with
all of Buyer’s contractual and statutory obligations. Buyer assumes
responsibility for Worker’s Compensation beginning on the Closing Date, and will
be responsible for all claims arising from incidents or events on or after the
Closing Date.

(e) With respect to any claim payments made on all open, closed and re-opened
claims covered under Seller’s workers’ compensation, domestic or international
employers’ liability insurance policies or comparable workers’ compensation
self-insurance, state or country programs, Seller will be responsible for all
such claims arising from incidents or events prior to the Closing Date, except
for any such claims covered under Transferable Insurance Policies.

Section 7.05 Books and Records of Company and Company Subsidiary.

(a) Seller and its Affiliates agree to work in good faith with Buyer and its
Representatives to prepare an inventory of all known Seller Business Records
within sixty (60) days of Closing and will transfer to Buyer original paper
copies of any such Seller Business Records or complete electronic copies of
electronically stored Seller Business Records identified on such inventory
within one hundred twenty (120) days after Closing, in each case subject to
applicable Laws.

(b) Seller and its Affiliates shall have the right to retain copies of books and
records (including e-mails) of the Business, including any Seller Business
Records, relating to periods ending on or before the Closing Date. Buyer, on the
one hand, and Seller, on the other hand, agree that they shall preserve and keep
original books and records (including e-mails) in respect of the Business in the
possession of Buyer or its Affiliates or, to the extent remaining in their
possession after the Closing, Seller or its Affiliates for at least the longer
of (a) any applicable statute of limitations and (b) a period of six (6) years
from the Closing Date.

 

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(c) During such six (6)-year or longer period, (i) Representatives of Seller and
its Affiliates, on the one hand, and Representatives of Buyer and its
Affiliates, on the other hand, shall, upon reasonable notice and for any
reasonable business purpose, have access during normal business hours to
examine, inspect and copy such books and records and e-mails, (ii) Buyer shall
use commercially reasonable efforts provide to Seller or its Affiliates or
Representatives, within thirty (30) days after written request therefore by
Seller , copies of such original books and records and e-mails (subject to
applicable Laws) of Company and Company Subsidiary or the Business as Seller or
its Affiliates shall reasonably request in connection with any Action to which
Seller or any of its Affiliates are parties or in connection with the
requirements of any Law applicable to Seller or any of its Affiliates, and
(iii) upon written request by Buyer Seller shall use commercially reasonable
efforts to provide to Buyer or its Affiliates or Representatives, within thirty
(30) days after such written request is provided, or such shorter period if
required for Buyer (or its Affiliates) to comply with applicable Laws or any
Order, copies of such original books and records and e-mails (subject to
applicable Laws) of Seller with respect to the Business as Buyer or its
Affiliates shall reasonably request in connection with any Action to which Buyer
or any of its Affiliates are parties with respect to the Business or in
connection with the requirements of any Law applicable to Buyer or any of its
Affiliates with respect to the Business. Buyer, on the one hand, and Seller, on
the other hand, each agrees that requested records will be made available at one
of its facilities during normal business hours and that Seller or Buyer,
respectively, will be allowed to come on site and make copies or images of any
documents it requires.

(d) After such six (6)-year or longer period, both Parties agree that such books
and records may be destroyed, unless Seller or Buyer, respectively, has provided
the other with notice of the need to retain the documents beyond this time
period. After Seller provides Buyer, or Buyer provides Seller, with notice of
the need to retain certain documents, Seller or any of its Affiliates, on the
one hand, or Buyer or any of its Affiliates, on the other hand shall be given an
opportunity, at their cost and expense, to remove and retain all or any part of
such books and records as it may elect.

Section 7.06 Solvency After Closing. After the Closing, Buyer agrees that it
shall not, and that it shall cause its Subsidiaries (which, for purposes of this
Section 7.06 shall include Company and Company Subsidiary) not to, take or omit
to take any action that could result in a determination pursuant to applicable
Law that, after giving effect to the Transactions (or after giving effect to
such transactions and to such other subsequent actions or omissions), Buyer or
any of its Subsidiaries, including Company and Company Subsidiary, (a) was
insolvent at the time of the Closing, (b) became insolvent as a result of the
Transactions, (c) was left with unreasonably small capital with which to engage
in its business or (d) incurred debts beyond its ability to pay such debts as
they mature, such that the payment of the Purchase Price may be deemed a
“fraudulent conveyance” or impermissible dividend or distribution under
applicable Law or otherwise subject to claims of any creditors of Buyer or any
of its Subsidiaries, including Company, Company Subsidiary or their respective
trustees in bankruptcy proceedings.

Section 7.07 Further Assurances. From time to time following the Closing, the
Parties shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all reasonable further conveyances, notices,
assumptions, releases and acquittances and such instruments, and shall take such
reasonable actions as may be necessary or appropriate to make effective the
transactions contemplated hereby as may be reasonably requested by the other
Parties; provided, however, that nothing in this Section 7.07 shall require any
Party or its Affiliates to pay money to, commence or participate in any Action
with respect to, or offer or grant any accommodation (financial or otherwise)
to, any third party following the Closing.

ARTICLE VIII

EMPLOYEE MATTERS

With respect to employee matters, the Parties agree and acknowledge that the
agreements and covenants set forth in Exhibit I to this Agreement are hereby
incorporated into this Agreement.

 

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ARTICLE IX

TAX MATTERS

Section 9.01 Filing of Tax Returns by Seller.

(a) Seller shall (i) timely prepare and file (or cause to be timely prepared and
filed) all Tax Returns that are required to be filed by or with respect to
Company, Company Subsidiary on an affiliated, consolidated, combined or unitary
basis with Seller or with at least one Affiliate of Seller that is not Company
or Company Subsidiary for Tax years or other periods beginning on or before the
Closing Date with an initial due date (taking into account any properly obtained
extensions) after the Closing Date, and (ii) timely prepare (or cause to be
prepared) all (A) stand-alone income Tax Returns required to be filed by Company
and Company Subsidiary and (B) affiliated, consolidated, combined or unitary
income Tax Returns for a group the parent of which is Company, for Tax years or
other periods ending on or before the Closing Date with an initial due date
(taking into account requests for extensions to file such returns) after the
Closing Date.

(b) Any Tax Return prepared by Seller pursuant to Section 9.01(a) shall
(i) reflect a deduction for the Transaction Deductions to the extent permitted
in accordance with applicable Law, and (ii) to the extent that such Tax Return
shows a net operating loss of Company or Company Subsidiary, such net operating
loss shall be carried back to previous Tax periods to the maximum extent
permitted by applicable Law.

(c) With respect to each Tax Return prepared and filed by Seller pursuant to
Section 9.01(a)(i), Seller shall timely remit (or cause to be timely remitted)
to the appropriate Taxing Authority any Taxes shown as due on such Tax Returns
to the extent that Taxes are required to be remitted upon filing such Tax
Returns (or are otherwise required to be remitted before the Closing Date). To
the extent Parent or Buyer is obligated for such Taxes pursuant to this
Agreement, Parent or Buyer, as applicable, shall reimburse Seller for such Taxes
within thirty (30) days after payment by Seller.

(d) Buyer shall timely file any Tax Return prepared by Seller pursuant to
Section 9.01(a)(ii) and shall timely remit any Taxes which are reflected on such
Tax Returns. Buyer shall permit Seller to review and approve (which approval
shall not be unreasonably withheld) the making of each such payment.

(e) Promptly, but no later than ninety (90) days after the Closing Date (but, in
any event, no later than sixty (60) days before the due date (without
extensions) of the relevant Tax Return), each Party shall provide (or cause to
be provided) to any other Party any information requested by such other Party
relating to Company or Company Subsidiary within its possession to facilitate
the preparation and filing of the Tax Returns described in Sections 9.01(a)
and 9.02(a). In the case of any such requests by Seller, Buyer shall prepare (or
cause to be prepared) such information in a manner consistent with past practice
of the Business.

Section 9.02 Filing of Tax Returns by Buyer.

(a) Except for the Tax Returns described in Section 9.01(a), Buyer shall timely
prepare and file (or cause to be timely prepared and filed) all Tax Returns of
Company and Company Subsidiary with an initial due date (taking into account any
properly obtained extensions) after the Closing Date. Buyer shall remit (or
cause to be remitted) any Taxes due with respect to such Tax Returns. To the
extent Seller is obligated for any such Taxes pursuant to this Agreement and
Parent or Buyer is required to pay such taxes, Seller shall reimburse Parent or
Buyer, as applicable, for such Taxes within thirty (30) days after payment by
Buyer.

(b) Except upon Seller’s written request pursuant to Section 9.04, neither Buyer
nor any Affiliate of Buyer shall (or shall cause or permit Company or Company
Subsidiary to) amend, refile or otherwise modify (or grant an extension of any
statute of limitation with respect to) any Tax Return relating in whole or in
part to Company or Company Subsidiary (or a group the parent of which is
Company) with respect to any taxable year

 

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or other period (or portion thereof) ending on or before the Closing Date (or
with respect to any Straddle Period) without the prior written consent of
Seller, which consent may be withheld in the sole discretion of Seller.

Section 9.03 Straddle Periods.

(a) For all purposes under this Agreement, in the case of any Tax period that
includes but does not end on the Closing Date (a “Straddle Period”), the portion
of Taxes (or any Tax refund and amount credited against any Tax) that are
allocable to the portion of the Straddle Period ending at the end of the Closing
Date will be: (i) in the case of property Taxes and other Taxes imposed on a
periodic basis without regard to income, gross receipts, payroll or sales,
deemed to be the amount of such Taxes (or Tax refund or amount credited against
Tax) for the entire Straddle Period multiplied by a fraction, the numerator of
which is the number of calendar days in the portion of such Straddle Period
ending at the end of the Closing Date and the denominator of which is the number
of calendar days in the entire Straddle Period, and (ii) in the case of all
other Taxes, determined as though the taxable year of Company or Company
Subsidiary, as applicable terminated at the end of the Closing Date. Any
Transaction Deductions shall be reflected as a deduction in the portion of any
Straddle Period ending at the end of the Closing Date.

Section 9.04 Refunds. Following the Closing, to the extent not reflected in the
calculation of Final Working Capital, Buyer shall pay (or cause to be paid) to
Seller (i) any Tax refunds that are received by Company or Company Subsidiary
(or Buyer or Parent on their behalf), and any amounts credited against Tax to
which Company or Company Subsidiary (or Buyer or Parent) becomes entitled, that
relate to Tax periods (or portions of a Straddle Period) ending on or before the
Closing Date; and (ii) any refunds or over accruals of Taxes that are accrued as
a Liability in the Final Working Capital Statement (in each case, including any
interest paid thereon and net of any Taxes incurred in respect of the receipt or
accrual of the refund); provided, however, that Buyer shall be entitled to any
refunds of Taxes to the extent that such refunds are reflected as an asset for
purposes of, and taken into account in, the Final Working Capital Statement.
Upon Seller’s request, Buyer shall file (or cause to be filed) all Tax Returns
(including amended Tax Returns) or other documents claiming any refunds,
including through the carryback of any net operating losses that are
attributable to a Tax period ending on or before the Closing Date, to which
Seller is entitled pursuant to the immediately preceding sentence. Any payments
required to be made under this Section 9.04 shall be made in immediately
available funds, to an account or accounts as directed by Seller, within fifteen
(15) days of the receipt of the refund or the application of any such refunds as
a credit against Tax for which Seller has not otherwise agreed to provide
indemnification under this Agreement, and otherwise in accordance with
Section 3.05.

Section 9.05 Agreed Tax Treatment. Buyer shall be a “C corporation” for purposes
of the Code. Buyer shall (i) cause Company and Company Subsidiary to join
Parent’s “consolidated group” (within the meaning of Treasury
Regulation Section 1.1502-1(h)) effective as of the beginning of the date
following the Closing Date, (ii) to the extent permitted by applicable Law,
treat the Closing Date as the last date of a Tax period of Company and Company
Subsidiary and (iii) treat the sale and purchase of the Shares pursuant to this
Agreement as a transaction in which any gain or loss is fully recognized on the
disposition of the Shares under the Code (the “Agreed Tax Treatment”). Each
Party shall file all Tax Returns consistently with the Agreed Tax Treatment and
shall not take any position inconsistent therewith.

Section 9.06 Post-Closing Actions. Parent shall not, and shall not permit any of
its Affiliates (including, after the Closing for the avoidance of doubt, Company
and Company Subsidiary) to (i)) amend, file, or re-file any Tax Return of
Company or Company Subsidiary that was originally due on or before the Closing
Date, (ii) voluntarily approach any Taxing Authority regarding any Taxes or Tax
Returns of Company or Company Subsidiary that were originally due on or before
the Closing Date, (iii) take any action relating to Taxes, or that could create
a Tax Liability, after the Closing that is outside the ordinary course of
business (other than as expressly contemplated by this Agreement), or
(iv) except upon Seller’s request pursuant to Section 9.04, carryback any net
operating losses to a Tax period (or portion thereof) ending on or before the
Closing Date. Parent shall not, and shall not permit Buyer to and Buyer shall
not, liquidate or merge Buyer during a one

 

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(1) year period starting on the Closing Date. Parent shall not, and shall not
permit Buyer to merge (which for the purposes of this Section 9.06 shall include
any transaction treated as a merger under state Law applicable to Company)
Company during a one (1) year period starting on the Closing Date. For the
avoidance of doubt, nothing in this Section 9.06 shall prohibit Parent, Buyer
(other than any such merger transaction where Buyer is not the surviving entity)
or Company Subsidiary from engaging in any merger transaction with another
entity (other than Company) or from merging Company Subsidiary into Buyer at any
time.

Section 9.07 Transfer Taxes. Notwithstanding anything in this Agreement to the
contrary, Buyer shall be liable for Transfer Taxes imposed or arising with
respect to the Transactions. The Party required by Law to file a Tax Return with
respect to such Transfer Taxes shall timely prepare, with the other Parties’
cooperation, and file such Tax Return. If Seller or any of its Affiliates (other
than Company and Company Subsidiary) files any such Tax Return, Buyer shall
promptly reimburse Seller for any Transfer Taxes paid by Seller or such
Affiliate in connection with the filing of such Tax Return. Buyer and Seller
each agrees to timely sign and deliver (or to cause to be timely signed and
delivered) such certificates or forms as may be necessary or appropriate and
otherwise to cooperate to establish any available exemption from (or otherwise
reduce) such Transfer Taxes.

Section 9.08 Tax Sharing Agreements. To the extent relating to Company or
Company Subsidiary, Seller shall terminate (or cause to be terminated) on or
before the Closing Date all Tax sharing agreements or arrangements (other than
for the avoidance of doubt this Agreement or any other agreement the principal
subject matter of which is not Taxes), if any, to which any of Company or
Company Subsidiary, on the one hand, and Seller or any Affiliate of Seller
(other than Company and Company Subsidiary), on the other hand, are parties, and
neither Seller nor any Affiliate of Seller, on the one hand, or Company or
Company Subsidiary, on the other hand, will have any Liability or entitlement to
any right thereunder to each other on or after the Closing Date.

Section 9.09 Tax Cooperation. Without limiting the obligations set forth in
Sections 6.02 and 7.01, the Parties shall furnish or cause to be furnished to
each other, upon request, as promptly as practicable, such information and
assistance relating to Company, Company Subsidiary or their assets or businesses
(including access to books and records) as is reasonably necessary for the
filing of all Tax Returns, the making of any election related to Taxes, the
preparation for any audit by any Taxing Authority, and the prosecution or
defense of any audit, proposed adjustment or deficiency, assessment, claim, suit
or other proceeding relating to any Taxes or Tax Return. The Parties shall
cooperate with each other in the conduct of any audit or other proceeding
related to Taxes and all other Tax matters relating to Company, Company
Subsidiary or their assets or businesses and each shall execute and deliver such
powers of attorney and other documents as are necessary to carry out the intent
of this Article IX. Buyer agrees that it shall preserve and keep, or cause to be
preserved and kept, all original books and records in respect of the Business
relating to any Taxes with respect to taxable years or other periods (in whole
or in part) ending on or before the Closing Date and in the possession of Buyer
or its Affiliates in accordance with Section 7.04(a).

Section 9.10 Section 338. Neither Parent nor Buyer shall make (or permit to be
made) any election under Section 338 of the Code (or any comparable applicable
provision of state, local or foreign Tax law) with respect to the acquisition of
Company and Company Subsidiary.

Section 9.11 FIRPTA Certificate. Seller shall deliver to Buyer at the Closing a
certificate of non-foreign status that complies with Section 1445 of the Code in
form and substance reasonably satisfactory to Buyer.

 

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ARTICLE X

CONDITIONS TO CLOSING

Section 10.01 Conditions to Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction or Seller’s waiver in its sole discretion, at or before the
Closing, of each of the following conditions:

(a) Representations and Warranties; Covenants. (i) The representations and
warranties of Parent contained in this Agreement shall be true and correct,
except for where the failure to be true and correct would not reasonably be
expected to have a Buyer Material Adverse Effect, as of the Agreement Date and
as of the Closing as if made on the Closing Date (other than representations and
warranties made as of another date, which representations and warranties shall
have been true and correct in all material respects as of such date) and
(ii) the covenants contained in this Agreement required to be complied with by
Parent and/or Buyer, as applicable, on or before the Closing shall have been
complied with in all material respects, and Seller shall have received a
certificate signed by an authorized officers of Parent and Buyer, dated the
Closing Date, to the foregoing effect.

(b) Governmental Approvals. All (i) Required Approvals shall have been obtained,
(ii) Buyer Required Notices shall have been made and (iii) waiting periods
imposed by any Government Authority necessary for the consummation of the
Transactions shall have expired or shall have been terminated.

(c) No Order. There shall be no Order in existence that prohibits or materially
restrains the sale of the Shares or the other Transactions, and there shall be
no proceeding brought by any Government Authority pending before any court of
competent jurisdiction seeking such an Order.

(d) Stockholder Approvals. The Parent Stockholder Approval and the Transaction
Approval shall have been obtained.

(e) Parent Board of Directors. In accordance with its organizational documents,
the size of the Parent Board shall be ten (10) directors as of the Closing, and
there will be at least one vacancy on the Parent Board as of the Closing such
that Seller’s designee to the Parent Board may be appointed as set forth in the
Investor Rights Agreement.

(f) NASDAQ Approval. The Parent Common Stock to be issued to Seller in
connection with this Agreement and the Conversion Shares issuable upon
conversion of the Parent Preferred Stock shall have been approved for listing
subject to notice of issuance on the NASDAQ Capital Market.

(g) Certificate of Designation. The certificate of designation of Parent
authorizing the Parent Preferred Stock (the “Certificate of Designation”), in
the form attached hereto as Exhibit J shall have been duly and validly filed
with the applicable Government Authority.

(h) Legal Opinion. Buyer shall have caused K&L Gates LLP and Snell & Wilmer, LLP
to deliver legal opinions substantially in the form of Exhibit K hereto.

(i) Transaction Agreements. Parent shall have executed and delivered to Seller
all Parent Transaction Agreements, and Buyer shall have executed and delivered
to Seller all Buyer Transaction Agreements.

Section 10.02 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction or Buyer’s waiver in its sole discretion, at or before the
Closing, of each of the following conditions:

(a) Representations and Warranties; Covenants. (i) The representations and
warranties of Seller contained in this Agreement shall be true and correct as of
the Agreement Date and as of the Closing as if made

 

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on the Closing Date (other than representations and warranties that are made as
of a specific date, which representations and warranties shall have been true
and correct as of such date); except for breaches or inaccuracies, as the case
may be, as to matters that, individually or in the aggregate, would not
reasonably be expected to have a Company Material Adverse Effect; provided,
however, that for purposes of determining the satisfaction of this condition, no
effect shall be given to the exceptions of “material” or “Company Material
Adverse Effect” in such representations and warranties; and (ii) the covenants
contained in this Agreement required to be complied with by Seller on or before
the Closing shall have been complied with in all material respects, and Buyer
shall have received a certificate signed by an authorized officer of Seller,
dated the Closing Date, to the foregoing effect.

(b) Governmental Approvals. All (i) Required Approvals shall have been obtained,
(ii) Seller Required Notices shall have been made and (iii) waiting periods
imposed by any Government Authority necessary for the consummation of the
transactions contemplated by this Agreement shall have expired or shall have
been terminated.

(c) No Order. There shall be no Order in existence that prohibits or materially
restrains the sale of the Shares or the other Transactions, and there shall be
no proceeding brought by any Government Authority pending before any court of
competent jurisdiction seeking such an Order.

(d) Stockholder Approvals. The Parent Stockholder Approval and the Transaction
Approval shall have been obtained.

(e) No Company Material Adverse Effect. From the execution of this Agreement
until the Closing, there shall not have occurred a Company Material Adverse
Effect.

(f) Seller Transaction Agreements. Seller shall have executed and delivered, or
caused to be executed and delivered, to Buyer and Parent all Seller Transaction
Agreements.

Section 10.03 Frustration of Closing Conditions. Neither Seller nor Buyer may
rely on the failure of any condition set forth in this Article X to be satisfied
if such failure was caused by such Party’s failure to act in good faith or to
use reasonable best efforts to cause the Closing to occur, including as required
by Section 6.04.

Section 10.04 Waiver of Closing Conditions. Upon the occurrence of the Closing,
any condition set forth in this Article X that was not satisfied as of the
Closing shall be deemed to have been waived as of and from the Closing.

ARTICLE XI

TERMINATION

Section 11.01 Termination. Notwithstanding anything in this Agreement to the
contrary, this Agreement may be terminated before the Closing:

(a) by the mutual written consent of Seller and Buyer;

(b) by Seller, if Parent or Buyer, as applicable shall have breached any
representation or warranty or failed to comply with any covenant or agreement
applicable to Parent or Buyer that would cause any Closing Condition set forth
in Section 10.01(a) not to be satisfied, and such Closing Condition is incapable
of being satisfied by the Outside Date; provided, however, that Seller is not
then in material breach of this Agreement;

(c) by Buyer, if Seller shall have breached any representation or warranty or
failed to comply with any covenant or agreement applicable to Seller that would
cause any Closing Condition set forth in Section 10.02(a)

 

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not to be satisfied, and such Closing Condition is incapable of being satisfied
by the Outside Date; provided, however, that Buyer is not then in material
breach of this Agreement;

(d) by either Seller or Buyer if the Closing shall not have occurred by the date
that is nine (9) months from the Agreement Date (as may be extended pursuant to
the following proviso, the “Outside Date”); provided, however, that if on
July 5, 2016 all Closing Conditions have been satisfied (other than the Closing
Conditions set forth in Section 10.01(b) and Section 10.02(b)), then either
Seller or Buyer may (in its sole discretion) extend the Outside Date for an
additional thirty (30) days by delivery of written notice of such extension to
the other no fewer than five (5) Business Days before the initial Outside Date;
and provided, further, however, that the right to terminate this Agreement under
this Section 11.01(d) shall not be available to either Party whose failure to
take any action required to fulfill any obligation under this Agreement
(including the failure to act in good faith or to use reasonable best efforts to
cause the Closing to occur, including taking the actions required by
Section 6.04)) shall have been the cause of, or shall have resulted in, the
failure of the Closing to occur before such date;

(e) by either Seller or Buyer in the event of the issuance of a final,
nonappealable Order permanently restraining or prohibiting the Closing;
provided, however, the right to terminate this Agreement under this
Section 11.01(e) shall not be available to Buyer if the issuance of such final,
nonappealable Order was primarily due to the failure of Buyer to perform its
obligations under this Agreement;

(f) by either Seller or Buyer if (i) the Parent Stockholder Meeting (including
any adjournments and postponements thereof) shall have been held and completed
and Parent’s stockholders shall have voted on the Proposals and (ii) the Parent
Stockholder Approval shall not have been obtained at such meeting (including at
any adjournment or postponement thereof pursuant to Section 6.05) by the Parent
Stockholder Approval; provided, however, that Buyer shall not be permitted to
terminate this Agreement pursuant to this Section 11.01(f) if the failure to
obtain such Parent Stockholder Approval results from a breach of this Agreement
by Parent or Buyer at or prior to the Closing;

(g) by Seller, if (i) all of the conditions set forth in Section 10.02 (other
than conditions which are to be satisfied by actions taken at the Closing) have
been satisfied and (ii) Parent or Buyer has failed to obtain proceeds pursuant
to the Commitment Letters (including as any Commitment Letters may be amended,
supplemented, modified or replaced in accordance with Section 6.11) sufficient
to fund the Closing Cash Payment and all other fees and expenses as may be
necessary to consummate the transactions contemplated by this Agreement; or

(h) by Seller, if a Triggering Event shall have occurred.

Section 11.02 Notice of Termination. Either Party desiring to terminate this
Agreement pursuant to Section 11.01 shall give written notice of such
termination to the other Party.

Section 11.03 Effect of Termination. In the event of the termination of this
Agreement in accordance with Section 11.01, this Agreement shall thereupon
become null and void and of no further force and effect, except for the
provisions of (a) Section 6.03, (b) Section 11.01, this Section 11.03 and
Section 11.04, (c) Article XIII and (d) Exhibit A. Nothing in this Section 11.03
shall be deemed to release any Party from any Liability for any breach by such
Party of any term of this Agreement or impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement.

Section 11.04 Termination Fees. Notwithstanding Section 11.03, and in addition
to either party’s right to compel specific performance by any other party of its
obligations under this Agreement, if this Agreement is terminated:

(a) (i) by Seller or Buyer pursuant to Section 11.01(d) or (ii) by Seller or
Buyer pursuant to Section 11.01(e) as a result of an Order issued pursuant to
Antitrust Laws, then Buyer shall pay an amount in

 

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cash equal to $15,000,000; provided that, (A) in the case of the preceding
clause (i) only, at the time of such termination of this Agreement, the Closing
Conditions set forth in Section 10.01(b) and Section 10.02(b) shall not have
been satisfied and (B) in the case of clause (ii) only, Seller shall not be
entitled to such payment if Seller is then in material breach of its obligations
under Section 6.04(a), 6.04(b), 6.04(d), 6.04(g) and the penultimate sentence of
6.04(c);

(b) by Seller pursuant to Section 11.01(g), then Buyer shall pay an amount in
cash equal to $15,000,000;

(c) by Seller or Buyer pursuant to Section 11.01(f), then Buyer shall pay an
amount in cash equal to $3,000,000.00;

(d) by Seller pursuant to Section 11.01(h), then Buyer shall pay an amount in
cash equal to $15,000,000.00; or

(e) (i) (A) by Seller pursuant to Section 11.01(b), (B) by Seller or Buyer
pursuant to Section 11.01(d) (only if at such time the Closing Conditions set
forth in Section 10.01(b) and Section 10.02(b) have been satisfied) or (C) by
Seller or Buyer pursuant to Section 11.01(f), and (ii) (A) a Parent Acquisition
Proposal has been made after the Agreement Date and (B) within 12 months of the
termination of this Agreement, Parent (1) enters into a definitive agreement
with respect to a Parent Acquisition Proposal or (2) consummates a Parent
Acquisition Proposal, then Buyer shall pay an amount in cash equal to
$15,000,000,00; provided, that any amounts previously paid by Buyer pursuant to
Section 11.04(c) shall be credited against such amount;

in each case, to Seller by wire transfer of immediately available funds, to a
bank account or accounts specified by Seller in writing to Buyer, concurrent
with such termination in the event of a termination by Buyer pursuant to
Section 11.01(d) or Section 11.01(e) with respect to amounts payable pursuant to
Section 11.04(a) or Section 11.01(f) with respect to amounts payable pursuant to
Section 11.04(c) and as promptly as reasonably practicable (and in any event,
within five (5) Business Days) with respect to all other amounts payable
pursuant to this Section 11.04. Buyer acknowledges that (x) the agreements
contained in this Section 11.04 are an integral part of the Transactions,
(y) the fees payable pursuant to this Section 11.04 are not a penalty, but
constitute liquidated damages, in a reasonable amount that will compensate
Seller in the circumstances in which such fees are payable for the efforts and
resources expended and opportunities foregone while negotiating this Agreement
and in reliance on this Agreement and on the expectation of the consummation of
the Transactions, which amount would otherwise be impossible to calculate with
precision, and (z) that without these agreements, Seller would not have entered
into this Agreement; accordingly, if Buyer fails to timely pay any amount due
pursuant to this Section 11.04, and, in order to obtain the payment, Seller
commences an Action which results in a judgment against Buyer for the payment
set forth in this Section 11.04, Buyer shall pay Seller its reasonable
out-of-pocket expenses (including attorney’s fees and expenses and
disbursements) in connection with such Action, together with interest on such
payment at the Interest Rate through the date such payment was actually
received.

ARTICLE XII

SURVIVAL

Section 12.01 Survival of Representations and Warranties. The rights of the
Parties to indemnification under this Agreement with respect to the
representations and warranties made hereunder shall survive the Closing (i) for
a period of fifteen (15) months; provided, however (ii) that the rights of the
applicable Parties to indemnification under this Agreement with respect to the
representations and warranties in Sections 4.01, 4.02, 4.03, 4.04(i) and 4.17
(collectively, the “Non-Healthcare Fundamental Seller Representations”), and
Sections 5.01, 5.02, 5.03(i), 5.05, 5.13, 5.17, 5.24 and 5.26 (collectively, the
“Non-Healthcare Fundamental Buyer Representations”), shall survive the Closing
for a period of six (6) years, and (iii) that the rights of the

 

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applicable Parties to indemnification under this Agreement with respect to the
representations and warranties in Sections 4.10 and 4.11 (collectively, the
“Healthcare Fundamental Seller Representations”) and Sections 5.07 and 5.08
(collectively, the “Healthcare Fundamental Buyer Representations”) shall survive
the Closing for a period of six (6) years. None of the covenants or other
agreements in contained in this Agreement shall survive the Closing other than
the covenants and agreements that by their terms apply or are to be performed in
whole or in part after the Closing Date, which covenants and agreements shall
survive until the earlier of (a) the period provided in such covenants and
agreements, if any, or until fully performed and (b) the date that is six
(6) years after the Closing Date. Any claim for indemnification pursuant to this
Section 12.01 that is made in accordance with the requirements set forth in
Section 12.05 prior to the expiration of the applicable survival period set
forth in this Section 12.01 with respect to such claim shall survive, subject to
the remaining limitations set forth in this Section 12.01, until such claim is
finally resolved.

Section 12.02 Indemnification by Seller. From and after the Closing, Seller
shall, subject to the provisions of this Article XII, indemnify and hold
harmless each of Buyer, Parent and their respective Affiliates (collectively,
the “Buyer Indemnified Parties”) from and against any and all Losses that are
suffered or incurred by any Buyer Indemnified Party arising out of, resulting
from or relating to any of the following matters:

(a) prior to their expiration in accordance with Section 12.01, the inaccuracy
of any representation or warranty made by Seller in Article IV (in each case,
other than the Non-Healthcare Fundamental Seller Representations and the
Healthcare Fundamental Seller Representations) as of the Closing Date, provided
that each such representation or warranty shall be read disregarding any Company
Material Adverse Effect or materiality qualification, except (i) for such
qualifications in Section 4.07(a) and (b) and (ii) that materiality-based
qualifiers that are included in a defined term shall not be so disregarded;

(b) prior to their expiration in accordance with Section 12.01, the inaccuracy
of any of the Non-Healthcare Fundamental Seller Representations, as of the
Closing Date, provided that each such representation or warranty shall be read
disregarding any Company Material Adverse Effect or materiality qualification,
except that materiality-based qualifiers that are included in a defined term
shall not be so disregarded;

(c) prior to their expiration in accordance with Section 12.01, the inaccuracy
of any of the Healthcare Fundamental Seller Representations, as of the Closing
Date, provided that each such representation or warranty shall be read
disregarding any Company Material Adverse Effect or materiality qualification,
except (i) for such qualification in Section 4.11(g) and Section 4.11(h)(1) and
(ii) that materiality-based qualifiers that are included in a defined term shall
not be so disregarded;

(d) prior to their expiration in accordance with Section 12.01, the failure by
Seller, Company or Company Subsidiary to perform any covenant or agreement made
by Seller or, solely with respect to covenants or agreements that by their terms
apply or are to be performed prior to the Closing, Company or Company Subsidiary
in this Agreement;

(e) as a result of (i) any and all income Taxes imposed on Company or Company
Subsidiary, or with respect to the Business, for any Tax period (and the portion
of any Straddle Period) ending on or before the Closing Date; (ii) any and all
Taxes of any Person (other than Company, Company Subsidiary or Parent or any of
its Affiliates) imposed on Company or Company Subsidiary as a transferee or
successor, by contract or pursuant to any law, rule or regulation (except, in
each case, Taxes imposed pursuant to a contract the principal subject matter of
which is not Taxes), which Taxes are due with respect to any Tax period (and the
portion of any Straddle Period) ending on or before the Closing Date and relate
to an event or transaction occurring prior to the Closing, (iii) any Taxes of
any member (other than Company or Company Subsidiary) of any affiliated,
consolidated, combined or unitary group (other than any such group of which
Parent or any of its Affiliates is a member) for which Company or Company
Subsidiary is liable as a result of Company’s or Company Subsidiary’s being a
member of such group before the Closing, including pursuant to Treasury
Regulations

 

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Section 1.1502-6 (or under any similar provision of foreign, state or local
Law); and (iv) any and all Taxes incurred that arise or result from the failure
of Company, Company Subsidiary or Seller to perform any of their covenants or
agreements in Article IX or Section 6.01(a)(vi), provided, however, that in the
case of Company or Company Subsidiary this clause (iv) shall apply only to such
failures occurring prior to the Closing; and

Section 12.03 Indemnification by Buyer and Parent. From and after the Closing,
Buyer and Parent shall, jointly and severally, subject to the provisions of this
Article XII, indemnify and hold harmless Seller and its respective Affiliates
(collectively, the “Seller Indemnified Parties”) from and against any and all
Losses that are suffered or incurred by any Seller Indemnified Party arising out
of, resulting from or relating to any of the following matters:

(a) prior to their expiration in accordance with Section 12.01, the inaccuracy
of any representation or warranty made by Parent in Article V (in each case,
other than the Non-Healthcare Fundamental Buyer Representations and the
Healthcare Fundamental Buyer Representations), as of the Closing Date, provided
that each such representation or warranty shall be read disregarding any Buyer
Material Adverse Effect or materiality qualification, except (i) for such
qualifications in Section 5.19(a) and (b) and (ii) that materiality-based
qualifiers that are included in the title or definition of a defined term shall
not be so disregarded;

(b) prior to their expiration in accordance with Section 12.01, the inaccuracy
of any of the Non-Healthcare Fundamental Buyer Representations, as of the
Closing Date, provided that each such representation or warranty shall be read
disregarding any Buyer Material Adverse Effect or materiality qualification,
except that materiality-based qualifiers that are included in the title or
definition of a defined term shall not be so disregarded;

(c) prior to their expiration in accordance with Section 12.01, the inaccuracy
of any of the Healthcare Fundamental Buyer Representations, as of the Closing
Date, provided that each such representation or warranty shall be read
disregarding any Buyer Material Adverse Effect or materiality qualification,
except (i) for such qualification in Section 5.08(g) and Section 5.08(h)(1) and
(ii) that materiality-based qualifiers that are included in the title or
definition of a defined term shall not be so disregarded;

(d) prior to their expiration in accordance with Section 12.01, the failure by
Buyer or Parent to perform any material covenant or agreement made by Buyer or
Parent or, , solely with respect to covenants or agreements that by their terms
apply or are to be performed after the Closing, Company or Company Subsidiary,
in this Agreement;

(e) as a result of (i) any and all income Taxes imposed on Parent or Buyer, or
with respect to the business of either Parent or Buyer, for any Tax period for
which Taxes are originally due on or before the Closing Date; (ii) any and all
Taxes of any Person (other than Parent or Buyer or any of their Affiliates)
imposed on Parent or Buyer as a transferee or successor, by contract or pursuant
to any law, rule or regulation (except, in each case, Taxes imposed pursuant to
a contract the principal subject matter of which is not Taxes), which Taxes are
due with respect to any Tax period (and the portion of any Straddle Period)
ending on or before the Closing Date and relate to an event or transaction
occurring prior to the Closing, (iii) any Taxes of any member (other than Parent
or Buyer) of any affiliated, consolidated, combined or unitary group (other than
any such group of which Parent or any of its Affiliates is a member) for which
Parent or Buyer is liable as a result of Parent’s or Buyer’s being a member of
such group before the Closing, including pursuant to Treasury Regulations
Section 1.1502-6 (or under any similar provision of foreign, state or local
Law); and (iv) any and all Taxes incurred that arise or result from the failure
of Parent or Buyer to perform any of their covenants or agreements in Article
IX; and

(f) the Business or operation of, and any actions taken with respect thereto by,
Company, Company Subsidiary, Buyer or Parent after the Closing.

 

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Section 12.04 Character of Indemnity Payments.

(a) Notwithstanding anything in this Agreement to the contrary:

(i) Seller shall not be required to indemnify or hold harmless any Buyer
Indemnified Party against, or reimburse any Buyer Indemnified Party for, any
Losses pursuant to Section 12.02(a) until the aggregate amount of the Buyer
Indemnified Parties’ Losses for which such Buyer Indemnified Parties seek
indemnification pursuant to Section 12.02(a) exceeds $2,000,000 (the “Deductible
Amount”), after which Seller shall only be obligated for such aggregate Losses
of such Buyer Indemnified Parties in excess of the Deductible Amount;

(ii) Buyer and Parent shall not be required to indemnify or hold harmless any
Seller Indemnified Party against, or reimburse any Seller Indemnified Party for,
any Losses pursuant to Section 12.03(a) until the aggregate amount of the Seller
Indemnified Parties’ Losses for which such Seller Indemnified Parties seek
indemnification pursuant to Section 12.03(a) exceeds the Deductible Amount,
after which Buyer and Parent shall only be obligated for such aggregate Losses
of such Seller Indemnified Parties in excess of the Deductible Amount;

(iii) Seller shall not be required to indemnify or hold harmless any Buyer
Indemnified Party against, or reimburse any Buyer Indemnified Party for, any
Losses pursuant to Section 12.02(c) until the aggregate amount of the Buyer
Indemnified Parties’ Losses for which such Buyer Indemnified Parties seek
indemnification pursuant to Section 12.02(c) exceeds $2,000,000 (the “Basket
Amount”), provided, that if such Basket Amount is met, then Seller will be
obligated for all such Losses in connection with Section 12.02(c), including all
such amounts comprising the Basket Amount;

(iv) Buyer and Parent shall not be required to indemnify or hold harmless any
Seller Indemnified Party against, or reimburse any Seller Indemnified Party for,
any Losses pursuant to Section 12.03(c) until the aggregate amount of the Seller
Indemnified Parties’ Losses for which such Seller Indemnified Parties seek
indemnification pursuant to Section 12.03(c) exceeds the Basket Amount,
provided, that if such Basket Amount is met, then Buyer and Parent will be
obligated for all such Losses in connection with Section 12.03(c) , including
all such amounts comprising the Basket Amount;

(v) The cumulative indemnification obligations of Seller pursuant to
Section 12.02(a) and Section 12.02(c) shall in no event exceed $50,000,000 (the
“Cap Amount”);

(vi) The cumulative indemnification obligations of Buyer and Parent pursuant to
Section 12.03(a) and Section 12.03(c) shall in no event exceed the Cap Amount;

(vii) The cumulative indemnification obligations of Seller under this Article
XII or otherwise shall in no event exceed $280,000,000 (the “Cumulative Cap
Amount”), payable in accordance with Section 12.07(e);

(viii) The cumulative indemnification obligations of Buyer and Parent under this
Article XII or otherwise shall in no event exceed the Cumulative Cap Amount; and

(ix) No Buyer Indemnified Party shall be entitled to make a claim for
indemnification under this Article XII with respect to any Losses to the extent
such amounts are reflected in Final Working Capital, Final Indebtedness or Final
Cash but only to the extent of the amount of such Losses so reflected.

(b) Tax. The Parties agree that any indemnification payments made with respect
to this Agreement shall be treated for all Tax purposes as an adjustment to the
Base Cash Purchase Price, unless otherwise required by law (including by a
determination of a Tax Authority that, under applicable law, is not subject to
further review or appeal).

 

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Section 12.05 Notice and Resolution of Claims.

(a) Notice. Each Person entitled to indemnification pursuant to Section 12.02
or Section 12.03 (an “Indemnified Party”) shall give written notice to the
indemnifying party or parties from whom indemnity is sought (an “Indemnifying
Party”) promptly after obtaining knowledge of any pending or threatened claim,
demand or circumstance that the Indemnified Party has determined has given or
would reasonably be expected to give rise to a right of indemnification that
such Person may have under Section 12.02 or 12.03, as applicable (including a
pending or threatened claim or demand asserted by a third party against the
Indemnified Party, such claim being a “Third Party Claim”). The notice shall set
forth in reasonable detail the claim, the basis for indemnification and a good
faith estimate of all related Losses, to the extent practicable. Failure to give
notice shall not release the Indemnifying Party from its obligations under
Section 12.02 or 12.03, as applicable, except to the extent that the failure
prejudices such Indemnifying Party, it being understood that notices for claims
in respect of a breach of a representation, warranty, covenant or agreement must
be delivered before the expiration of any applicable survival period specified
in Section 12.01 for claims with respect to such representation, warranty,
covenant or agreement. Notwithstanding the above, each Indemnified Party shall
give written notice to the Indemnifying Party (“Self-Disclosure Notice”) no less
than twenty (20) days prior to disclosing any circumstances or conduct pursuant
to CMS’ Self-Referral Disclosure Protocol, the OIG’s Self Disclosure Protocol or
a voluntary self-disclosure overpayment on CMS’ Overpayment Refund Form (the
“Self-Disclosure”), but only so long as the circumstances or conduct proposed to
be disclosed would reasonably be expected to give rise to a right of
indemnification that the Indemnified Party may have under Section 12.02 in
excess of the Basket Amount. The Self-Disclosure Notice shall set forth in
reasonable detail the claim, the basis for indemnification and a good faith
estimate of the related Losses, and shall provide a draft of any proposed
self-disclosure submission. In the ten (10) day period after receipt of the
Self-Disclosure Notice, the Indemnified Party shall afford the Indemnifying
Party the opportunity to present its views as to whether any such
Self-Disclosure is necessary and to comment upon and consult with the
Indemnified Party on the draft self-disclosure submission prior to disclosing
such submission to the OIG, CMS or CMS contractor, as applicable. The
Indemnified Party may not submit the Self-Disclosure until the earlier of its
receipt of comments from the Indemnifying Party or the expiration of such ten
(10)-day comment period. The Indemnified Party shall provide a draft of any
proposed settlement agreement to the Indemnifying Party, but only so long as the
circumstances or conduct of the Self-Disclosure continue to be reasonably
expected to give rise to a right of indemnification that the Indemnified Party
may have under Section 12.02 in excess of the Basket Amount. In the ten (10) day
period after receipt of any such proposed settlement agreement, the Indemnifying
Party shall provide either its (a) final approval and consent, which shall not
be unreasonably conditioned, delayed or withheld, or (b) objection to such
proposed settlement agreement, together with reasonable detail as to the basis
therefor. If the Indemnifying Party has provided such approval or consent or if
such ten (10) day period has expired without any response from the Indemnifying
Party, the Indemnified Party may proceed to execute any such settlement
agreement with the OIG, CMS or CMS contractor, as applicable. If the
Indemnifying Party has objected to any such settlement agreement, in the ten
(10) day period after receipt of such objection, the Indemnified Party shall
consult with the Indemnifying Party in good faith negotiations to attempt to
resolve the basis for the objection prior to executing any such settlement
agreement, but in any case the Indemnified Party may proceed to execute any such
settlement agreement with the OIG, CMS or CMS contractor, as applicable, at the
end of such ten (10) day negotiation period.

(b) Defense of Third Party Claims. If a Third Party Claim shall arise, the
Indemnifying Party may assume the defense of such Third Party Claim by providing
written notice to the Indemnified Party within thirty (30) days after receipt of
the notice of such claim. The Person that shall control the defense of any such
Third Party Claim (the “Controlling Party”) shall select counsel, contractors
and consultants of recognized standing and competence after consultation with
the other Party and shall take all steps reasonably necessary in the defense or
settlement of such Third Party Claim, provided that the Indemnified Party shall
retain the right to employ its own counsel and participate in the defense of the
Third Party Claim at its own expense (which shall not be recoverable from the
Indemnifying Party under this Article XII unless (i) the Indemnified Party is
advised by counsel that (x) there may be one or more legal defenses available to
the Indemnified Party which are not

 

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available to the Indemnifying Party, or available to the Indemnifying Party the
assertion of which would be adverse to or in conflict with the interests of the
Indemnified Party, or (y) that representation of both parties by the same
counsel would be otherwise inappropriate under applicable standards of
professional conduct, (ii) the Indemnifying Party shall not have employed
counsel to represent the Indemnified Party within thirty (30) Business Days
after notice of the assertion of any such claim or institution of any such Third
Party Claim, (iii) the Indemnifying Party shall authorize the Indemnified Party
in writing to employ separate counsel at the expense of the Indemnifying Party,
or (iv) such Third Party Claim relates to or arises in connection with any
criminal action, in each of which cases the reasonable expenses of counsel to
the Indemnified Party shall be reimbursed by the Indemnifying Party).
Notwithstanding the foregoing provisions of this Section 12.05, (A) no
Indemnifying Party shall be entitled to settle any Third Party Claim for which
indemnification is sought under Section 12.02 or Section 12.03 without the
Indemnified Party’s prior written consent, which shall not be unreasonably
withheld, conditioned or delayed, unless it has assumed the defense of such
Third Party Claim and as a part of the settlement the Indemnified Party is
released from all liability with respect to the Third Party Claim and the
settlement does not impose any financial or equitable remedy on the Indemnified
Party or any Asset, as applicable, does not cause any restriction or condition
that would apply to or materially adversely affect the Indemnified Party or the
conduct of the Indemnified Party’s business or require the Indemnified Party to
admit any fault, wrongdoing, violation, culpability or failure to act by or on
behalf of the Indemnified Party, and (B) no Indemnified Party shall be entitled
to settle any Third Party Claim for which indemnification is sought under
Section 12.02 or Section 12.03 without the Indemnifying Party’s prior written
consent, which shall not be unreasonably withheld, conditioned or delayed.
Seller or Parent, as the case may be, shall, and shall cause each of its
Affiliates and Representatives to, cooperate fully with the Controlling Party in
the defense of any Third Party Claim. Notwithstanding the foregoing provisions
of this Section 12.05, if the Indemnifying Party does not notify the Indemnified
Party within thirty (30) Business Days after receipt of the Indemnified Party’s
notice of a Third Party Claim of indemnity hereunder that it elects to assume
the control of the defense of any Third Party Claim, the Indemnified Party shall
have the right to contest the Third Party Claim but shall not thereby waive any
right to indemnity therefor pursuant to this Agreement and the costs of such
Actions by the Indemnified Party shall be paid by the Indemnifying Party.

(c) Resolution of Claims. Following timely provided notice of an indemnification
claim under this Agreement in accordance with Section 12.05(a) (other than a
Third Party Claim which is governed by Section 12.05(b)), the Indemnifying Party
will have thirty (30) days from the date notice was provided of such claim (the
“Dispute Period”) to make such investigation of the claim as the Indemnifying
Party deems necessary or advisable. For purposes of such investigation, the
Indemnified Party will make available to the Indemnifying Party all the
information reasonably related to such claim relied upon by, or in the
possession or control of, the Indemnified Party to substantiate such claim. If
the Indemnifying Party disagrees with the validity or amount of all or a portion
of such claim made by the Indemnified Party, the Indemnifying Party will provide
to the Indemnified Party written notice thereof (the “Indemnification Dispute
Notice”) prior to the expiration of the Dispute Period. If no Indemnification
Dispute Notice is timely provided to the Indemnified Party within the Dispute
Period or if the Indemnifying Party provides notice that it does not have a
dispute with respect to such claim for indemnification, then such claim will be
deemed approved and consented to by the Indemnifying Party (such claim being
referred to herein as an “Approved Indemnification Claim”). The Indemnifying
Party will pay the amount of the Approved Indemnification Claim by wire transfer
of immediately available funds (or, with respect to Seller, pursuant to
Section 12.07(e)) to the account designated in writing by the Indemnified Party
within five (5) Business Days after such claim is determined to be an Approved
Indemnification Claim. If a Dispute Notice is provided to the Indemnified Party
within the Dispute Period and the Indemnifying Party and the Indemnified Party
do not agree to the validity and/or amount of such disputed claim, the
Indemnifying Party and the Indemnified Party shall negotiate in good faith for a
period of at least sixty (60) days to resolve the dispute. If the Indemnifying
Party and the Indemnified Party are unable to come to an agreement regarding
such disputed claim during such sixty (60) day period, such dispute shall be
deemed a Transaction Dispute and resolved in accordance with Section 13.13.

 

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Section 12.06 Exclusive Remedies . Except as otherwise expressly set forth in
this Agreement, and except for fraud or intentional misrepresentation, following
the Closing, the indemnification provisions of this Article XII shall be the
sole and exclusive remedies of any Seller Indemnified Party and any Buyer
Indemnified Party, respectively, for any Losses (including any Losses from
claims for breach of contract, warranty, tortious conduct (including negligence)
or otherwise and whether predicated on common law, statute, strict liability, or
otherwise) that it may at any time suffer or incur, or become subject to, as a
result of, or in connection with, any breach of or inaccuracy with respect to
any representation or warranty set forth in this Agreement by Buyer or Seller,
respectively, or any breach or failure by Buyer or Seller, respectively, to
perform or comply with any covenant or agreement set forth herein. Without
limiting the generality of the foregoing, except for fraud or intentional
misrepresentation, the Parties hereby irrevocably waive any right of rescission
they may otherwise have or to which they may become entitled.

Section 12.07 Additional Indemnification Provisions.

(a) With respect to each indemnification obligation contained in this Agreement:
(i) each such obligation shall be reduced by any Tax benefit actually recognized
by the Indemnified Party as the result of the Loss giving rise to the
indemnification obligation and which results in an actual reduction of cash
Taxes paid by the Indemnified Party in the taxable year of the Loss giving rise
to the obligation or any of the subsequent five (5) taxable years (determined in
each of such taxable years on a “with and without basis” by comparing the
Indemnified Parties’ liability for Taxes in such year with and without taking
into account such Loss and the Tax consequences of any reduction in the Buyer’s
Tax basis in the Shares resulting from the indemnification payment (“Share Basis
Reduction”)); provided, however, that if (A) such Tax benefit is recognized
after an indemnification payment is made (but within such five (5) taxable year
period), the relevant Indemnified Party will pay within fifteen (15) days of so
recognizing such Tax benefit to the relevant Indemnifying Party an amount equal
to such reduction in cash Taxes paid, and (B) if any Tax cost is incurred by an
Indemnified Party after the indemnification payment is made (but within such
five (5) taxable year period on account of the indemnification payment
(including, without limitation, the Tax effect of any Share Basis Reduction
resulting therefrom)), the relevant Indemnifying Party will pay within fifteen
(15) days of the Indemnified Party recognizing such Tax cost to the relevant
Indemnified Party an amount equal to such cost (which amount shall in no event
exceed in the aggregate the amount of the related Tax benefit which resulted in
a reduction of an indemnification obligation or payment by the relevant
Indemnified Party to the relevant Indemnifying Party pursuant to this
Section 12.07(a)), (ii) all Losses shall be net of any amounts that have been
recovered by the Indemnified Party pursuant to any indemnification by, or
indemnification agreement with, any third party or any insurance policy or other
cash receipts or sources of reimbursement in respect of such Loss (including the
recovery or reimbursement of payments from a Taxing Authority), (iii) all Losses
will be determined after deducting therefrom the amount of any reserve with
respect to such matter on the Financial Statements, (iv) no representation or
warranty of Seller or Parent shall be deemed untrue or incorrect as a
consequence of the existence of any fact, circumstance or event that is
disclosed in connection with another representation or warranty contained in
this Agreement, and (v) Seller shall not be liable for any Losses to the extent
that such Losses suffered by any Buyer Indemnified Party, on the one hand, and
Parent shall not be liable for any Losses to the extent that such Losses
suffered by any Seller Indemnified Party, on the other hand, (A) result from any
act or omission by such Buyer Indemnified Party or Seller Indemnified Party, as
applicable, (B) result from the failure of such Buyer Indemnified Party or
Seller Indemnified Party, as applicable, to take reasonable action to mitigate
such Losses, (C) are taken into account in the calculation of Final Working
Capital, (D) result from the operation of Company, Company Subsidiary or the
Business, in the case of a Buyer Indemnified Party, or any event or occurrence,
after the Closing, (E) result from the operation of Company, Company Subsidiary
or the Business, in the case of a Seller Indemnified Party, or any event or
occurrence, prior to the Closing, or (F) are caused by or result from any action
(1) that Seller or Parent is required, permitted or requested to take pursuant
Section 6.01 (including pursuant to the consent of Buyer or Seller, as
applicable) or (2) that Seller or Parent having sought Buyer’s or Seller’s
consent, as applicable, pursuant to Section 6.01, did not take as a result of
Buyer or Seller, as applicable, having unreasonably withheld, conditioned or
delayed the requested consent. With respect to clause (i) of this
Section 12.07(a), the Indemnified Party shall first use commercially reasonable
efforts to collect any amounts

 

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under such indemnification agreements, insurance policies or other sources of
reimbursement to the same extent as they would if such Loss were not subject to
indemnification hereunder or otherwise; provided that, (x) in accordance with
and subject to the terms of this Article XII, the Indemnified Party may submit a
claim for indemnification prior to or simultaneously with satisfying such
commercially reasonable efforts to collect such amounts prior to being
indemnified with respect to such Losses, and (y) recovery for any such claims
from the Indemnifying Party shall be permitted in accordance with and subject to
the terms of this Article XII in the event that an insurance, indemnity,
reimbursement or similar recovery is not actually and fully realized, to the
extent of such Losses, by the Indemnified Party within one hundred twenty
(120) days of the date of such claim by the Indemnified Party in accordance with
and subject to the terms of this Article XII; and provided, further, that the
diligence findings, opinions or disposition of any insurance company with
respect to any claim for indemnification, the determination of such insurance
company regarding whether to deny or pay any claim in whole or in part, and all
communications between such insurance company and any Indemnified Party, shall
not be binding on the Parties, any Buyer Indemnified Party or any Seller
Indemnified Party or have any force or effect with respect to any claim for
indemnification hereunder. If an Indemnified Party receives any such insurance
proceeds or indemnity, reimbursement or similar payments after being indemnified
hereunder with respect to some or all of such Losses, the Indemnified Party
shall pay to the Indemnifying Party the lesser of (I) the amount of such
insurance proceeds or indemnity, reimbursement or similar payment, less
reasonable attorney’s fees and other reasonable out-of-pocket expenses incurred
in connection with such recovery and (II) the aggregate amount paid by the
Indemnifying Party to any Indemnified Party with respect to such Losses.

(b) The Indemnified Parties shall not have any right to indemnification under
this Agreement with respect to, or based on, Taxes to the extent such Taxes
(i) except in the case of a claim for indemnification based on a breach of the
representations and warranties set forth in Section 4.17(i) or Section 5.24(i)
or, with respect to Buyer Indemnified Parties, a breach of a covenant set forth
in Section 6.01(a)(vi), are attributable to Tax periods (or portions thereof)
beginning after the Closing Date, (ii) are due to the unavailability in any Tax
period (or portion thereof) beginning after the Closing Date of any net
operating losses, credits or other Tax attribute from a Tax period (or portion
thereof) ending on or before the Closing Date, (iii) result from any
transactions or actions taken by, or omissions by, Buyer or any of its
Affiliates (including, for the avoidance of doubt, Company and Company
Subsidiary) after the Closing, on the one hand, or Seller or any of its
Affiliates, on the other hand, that are not specifically contemplated by this
Agreement, (iv) result from any Parent or Buyer, on the one hand, or Seller, on
the other hand, financing transaction undertaken after the Closing Date (for
this purpose, a financing transaction means an issuance of stock or debt by
Buyer or Parent, on the one hand, or Seller, on the other hand, after the
Closing Date) or (v) except, (A) in the case of a claim for indemnification
based on a breach of the representations and warranties set forth in
Section 4.17(i) or Section 5.24(i) or, with respect to Buyer Indemnified
Parties, a breach of a covenant set forth in Section 6.01(a)(vi) or (B) with
respect to Buyer Indemnified Parties and with respect to any Taxes originally
due after the Closing (or due after Closing as the result of extending the due
date of a Tax Return) that relate to a Tax period (and the portion of any
Straddle Period) ending on or before the Closing Date, do not result from a Tax
Claim.

(c) If an Indemnifying Party makes any payment for any Losses suffered or
incurred by an Indemnified Party pursuant to the provisions of this Article XII,
such Indemnifying Party shall be subrogated, to the extent of such payment, to
all rights and remedies of the Indemnified Party to any insurance benefits or
other claims of the Indemnified Party with respect to such Losses and with
respect to the claim giving rise to such Losses.

(d) The Parties agree that the covenants of Seller, on the one hand, and Buyer,
on the other hand, contained in this Agreement may not be used to circumvent the
negotiated limitations (e.g., knowledge qualifiers, materiality standards,
dollar thresholds, survival periods and the like) contained in such
representations and warranties and procedures with respect to the recovery by a
Buyer Indemnified party on account of the breach by Seller of any of the
representations made in Article IV or the recovery by Seller Indemnified Party
on account of the breach by Parent of any of the representations made in Article
V.

(e) The Parties agree that any indemnification payments by Seller for Losses
incurred by a Buyer Indemnified Party pursuant to this Article XII (i) first,
for amounts up to the amount of the Closing Cash

 

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Payment, shall be paid in cash and (ii) then, for amounts in excess of the
amount of the Closing Cash Payment, shall be paid in Parent Preferred Stock
until all such Parent Preferred Stock then held by Seller is exhausted, and
(iii) then, for any remaining amounts, in Parent Common Stock; provided, that
the value of (A) each share of Parent Preferred Stock shall be equal to the
issue price as set forth in the Certificate of Designation and (B) each share of
Parent Common Stock shall be equal to the volume-weighted average trading price
of the Parent Common Stock for the twenty (20) trading days preceding the
applicable date of payment for the purposes of this Section 12.07(e).

Section 12.08 Acknowledgements. Parent and Buyer, on the one hand, and Seller,
on the other hand, each expressly agrees and acknowledges that none of Seller,
on the one hand, or Parent and Buyer, on the other hand, or any of their
respective Affiliates or their respective Representatives or any other Person
has made, nor shall any such Person be deemed to have made, and each such Person
disclaims, and Buyer, Parent and Seller, as applicable, has not relied upon and
shall make no claim with respect to (i) any representation or warranty, covenant
or agreement, express or implied, with respect to Buyer, Parent, Seller,
Company, Company Subsidiary, the Shares, the Assets, the Liabilities of Buyer,
Company or Company Subsidiary, the Business, the Transactions or otherwise,
other than the representations and warranties set forth in Article IV or Article
V, as applicable (as the same may be modified by the Disclosure Schedules) and
other than such covenants and agreements of Seller, on the one hand, or Parent
or Buyer, on the other hand, that are expressly set forth in this Agreement; or
(ii) any representation or warranty with respect to the accuracy or completeness
of any information regarding Buyer, Parent, Seller, Company, Company Subsidiary,
the Shares, the Assets, the Liabilities of Buyer, Company or Company Subsidiary,
the Business, the Transactions or otherwise that has been furnished or made
available to Seller or Buyer, as applicable, and their respective
Representatives, other than the representations and warranties set forth in
Article IV or Article V, as applicable (as the same may be modified by the
Disclosure Schedules). None of Seller, on the one hand, or Parent or Buyer, on
the other hand, or any of their respective Affiliates or their respective
Representatives shall have or be subject to any Liability to Buyer or Parent, on
the one hand, or Seller, on the other hand, or any other Person resulting from
or in connection with the dissemination to Buyer or Parent or Seller, as
applicable, or their respective Affiliates or their respective Representatives
or any other Person, or the use by Buyer or Parent or Seller, as applicable, or
their respective Affiliates or their respective Representatives or any other
Person, of any information regarding Parent, Buyer, Seller, Company, Company
Subsidiary, the Shares, the Assets, the Liabilities of Buyer, Company or Company
Subsidiary, the Business, the Transactions or otherwise, including any
information, documents or material made available to Buyer or Parent or Seller,
as applicable, or their respective Affiliates or their respective
Representatives in any “data room”, “teaser”, due diligence interview,
management presentation or in any other form in connection with or in
expectation of the entry into this Agreement or consummation of the
Transactions. Without limiting the generality of the foregoing, Buyer and
Parent, on the one hand, and Seller, on the other hand, each agrees and
acknowledges that any cost estimate, financial or other projections or other
predictions that may be contained or referred to in this Agreement, the
Disclosure Schedules or elsewhere, as well as any such information, documents or
other materials (including any such materials set forth in the preceding
sentence) (collectively, the “Projections”) are not, and shall not be deemed to
be, a representation or warranty of Seller, on the one hand, or Buyer or Parent,
on the other hand, or any of their respective Affiliates, and none of Seller, on
the one hand, or Buyer or Parent, on the other hand, or their respective
Affiliates or their respective Representatives will be liable in respect of the
accuracy or completeness of any Projections, except as expressly set forth in
Article IV or Article V, as applicable (as modified by the Disclosure
Schedules).

Section 12.09 Limitation on Liability. Notwithstanding anything in this
Agreement or in any other Transaction Agreement to the contrary, in no event
shall any Indemnified Party have any Liability under any Transaction Agreement
(including under this Article XII) for (i) any consequential, special,
incidental, indirect or punitive damages (except (a) to the extent punitive
damages are paid in connection with a Third Party Claim finally resolved in
accordance with Section 12.05 or (b) fines or penalties imposed by a Government
Authority) or lost profits or similar items (including loss of revenue; income
or profits; any amount calculated based upon any multiple of earnings, book
value or cash flow; diminution of value or loss of business reputation or
opportunity relating to a breach or alleged breach of this Agreement); provided
that such limitation with respect

 

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to lost profits shall not limit any Indemnified Party’s right to recover
contract damages in connection with such Party’s failure to close in breach or
violation of this Agreement, or (ii) any amount that is a possible or potential
Loss that the Indemnified Party believes may be asserted rather than a Loss that
has in fact been paid or incurred by an Indemnified Party pursuant to the
provisions of this Article XII.

ARTICLE XIII

MISCELLANEOUS

Section 13.01 Rules of Construction. The following rules of construction shall
govern the interpretation of this Agreement:

(a) references to “applicable” Law or Laws with respect to a particular Person,
thing or matter means only such Law or Laws as to which the Government Authority
that enacted or promulgated such Law or Laws has jurisdiction over such Person,
thing or matter as would be determined under the Laws of the State of New York
as required to be applied thereunder by a court sitting in the State of New
York; references to any statute, rule, regulation or form (including in the
definition thereof) shall be deemed to include references to such statute, rule,
regulation or form as amended, modified, supplemented or replaced from time to
time (and, in the case of any statute, include any rules and regulations
promulgated under such statute), and all references to any section of any
statute, rule, regulation or form include any successor to such section.

(b) an item arising with respect to a specific representation or warranty shall
be deemed to be “reflected on” or “set forth in” a balance sheet or financial
statements to the extent (i) there is a reserve, accrual or other similar item
underlying a number on such balance sheet or financial statement that is related
to the subject matter of such representation, (ii) such item is otherwise
specifically set forth on the balance sheet or financial statement or (iii) such
item is reflected on the balance sheet or financial statement and is
specifically referred to in the notes thereto.

(c) when calculating the period of time before which, within which or following
which any act is to be done or step taken pursuant to this Agreement, the date
that is referenced in beginning or at the end of the calculation of such period
will be excluded (for example, if an action is to be taken within two (2) days
after a triggering event and such event occurs on a Tuesday, then the action
must be taken by Thursday or if an action is to be taken within two (2) days of
a target date and the target date is a Thursday, the action must be taken by
Tuesday); if the last day of any period referenced herein is a non-Business Day,
the period in question will end on the next succeeding Business Day;

(d) whenever the context requires, words in the singular shall be held to
include the plural and vice versa, and words of one gender shall be held to
include the other gender as the context requires;

(e) (i) the provision of a table of contents, the division into Articles,
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement; and (ii) references to the terms “Article”,
“Section”, “subsection”, “subclause”, “clause”, “Schedule” and “Exhibit” are
references to the Articles, Sections, subsections, subclauses, clauses,
Schedules and Exhibits to this Agreement unless otherwise specified;

(f) (i) the terms “hereof”, “herein”, “hereby”, “hereto”, and derivative or
similar words refer to this entire Agreement, including the Schedules and
Exhibits hereto; (ii) the terms “include”, “includes”, “including” and words of
similar import when used in this Agreement mean “including, without limitation”
unless otherwise specified; (iii) the term “any” means “any and all”; and
(iv) the term “or” shall not be exclusive and shall mean “and/or”;

(g) (i) references to “days” means calendar days unless Business Days are
expressly specified; (ii) references to “written” or “in writing” include in
electronic form; and (iii) references to “$” mean U.S. dollars;

 

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(h) references to any Person includes such Person’s successors and permitted
assigns; and

(i) each Party has participated in the negotiation and drafting of this
Agreement and if an ambiguity or question of interpretation should arise, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or burdening any Party by
virtue of the authorship of any provision in this Agreement; the language used
herein will be deemed to be the language chosen by the Parties to express their
mutual intent, and no rule of strict construction will be applied against any
Party.

Section 13.02 Expenses. Except as otherwise specified in the Transaction
Agreements, each Party will pay its own costs and expenses, including legal,
consulting, financial advisor and accounting fees and expenses, incurred in
connection with the Transactions, irrespective of when incurred or whether or
not the Closing occurs.

Section 13.03 Notices. All notices and other communications under or by reason
of the Transaction Agreements shall be in writing and shall be deemed to have
been duly given or made (a) when personally delivered, (b) when delivered by
facsimile or e-mail transmission with receipt confirmed (followed by delivery of
an original by another delivery method provided for in this Section 13.03); or
(c) one (1) Business Day after deposit with overnight courier service or, in
each case to the addresses and attention parties indicated below (or such other
address, facsimile number, e-mail address or attention party as the recipient
party has specified by prior notice given to the sending party in accordance
with this Section 13.03):

 

If to Seller, to:   

GE Medical Holding AB

Björkgatan 30

75184 Uppsala, Sweden

Attention: Legal Administrator

Facsimile: (+46) 186121810

 

GE Healthcare Life Sciences

350 Campus Drive

Marlborough, Massachusetts 01752-3082

Attention: General Counsel

Facsimile: +1 609 228 6148

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

GE Medical Holding AB

c/o GE Healthcare Limited

Pollards Wood

Nightingales Lane

Chalfont St Giles

Buckinghamshire HP8 4SP

United Kingdom

Attention: Executive Counsel, M&A

Facsimile: +44 1494 545 275

 

Paul Hastings LLP

71 South Wacker Drive, Suite 4500

Chicago, IL 60606

Attention: Thaddeus J. Malik

                  Richard S. Radnay

Facsimile: (312) 499-6100

E-mail:       thaddeusmalik@paulhastings.com

                   richardradnay@paulhastings.com

 

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and

 

Paul Hastings LLP

695 Town Center Drive, Seventeenth Floor

Costa Mesa, CA 92926

Attention: Stephen D. Cooke

Facsimile: (714) 668-6364

E-mail:       stephencooke@paulhastings.com

If to Parent, to:   

NeoGenomics, Inc.

12701 Commonwealth Drive, Suite 9

Fort Myers, FL 33913

Attention: Douglas VanOort

Facsimile: (239) 690-4237

E-mail: dvanoort@neogenomics.com

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

K&L Gates LLP

200 South Biscayne Boulevard, Suite 3900

Miami, FL 33131

Attention: Clayton E. Parker

Facsimile: (305) 358-7095

E-mail: clayton.parker@klgates.com

If to Buyer, to:   

NeoGenomics Laboratories, Inc.

12701 Commonwealth Drive, Suite 9

Fort Myers, FL 33913

Attention: Douglas VanOort

Facsimile: (239) 690-4237

E-mail: dvanoort@neogenomics.com

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

K&L Gates LLP

200 South Biscayne Boulevard, Suite 3900

Miami, FL 33131

Attention: Clayton E. Parker

Facsimile: (305) 358-7095

E-mail: clayton.parker@klgates.com

Section 13.04 Public Announcements. The initial press release with respect to
the execution of this Agreement shall be a NeoGenomics press release that shall
be reasonably agreed upon by the Seller. No Party or any Affiliate or
Representative of any Party shall issue or cause the publication of any press
release or public announcement or otherwise communicate with any news media in
respect of the Transaction Agreements or the Transactions without the prior
written consent of any other Parties (which consent shall not be unreasonably
withheld, conditioned or delayed), except as a Party believes in good faith and
based on reasonable advice of counsel is required by applicable Law or by
applicable rules of any stock exchange or quotation system on which such Party
or its Affiliates lists or trades securities (in which case the disclosing Party
will use its reasonable best efforts to (a) advise the other Parties before
making such disclosure and (b) provide such other Parties a reasonable
opportunity to review and comment on such release or announcement and consider
in good faith any comments with respect thereto. Notwithstanding the foregoing,
the Parties agree to develop a mutually agreed upon set of taking points that
either party may use with the news media or investors without first seeking
written consent of the other party. No Party shall make publicly available any
Transaction Agreement (or any portion of any Transaction Agreement) (whether
before or after the Closing) without the prior written consent of the other
Parties, except as any Party believes in good faith and based on reasonable
advice of counsel is required by applicable Law or by applicable rules of any
stock exchange or quotation system on which such Party or its

 

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Affiliates lists or trades securities (in which case the disclosing Party will
use its reasonable best efforts to advise the other Parties before making such
disclosure and, upon the request of the other Parties, the Parties will work
together in good faith to agree and pursue appropriate confidential treatment
requests with respect to such Transaction Agreements). This Section 13.04 shall
not apply to disclosures by a Party to its Representatives for the purpose of
obtaining advice in connection with the Transactions, it being understood that
such Representatives will be informed of the confidential nature of the
Transactions and Transaction Agreements and will be directed to treat such
information as confidential in accordance with the terms of this Agreement.

Section 13.05 Severability. If any term or provision of this Agreement is held
invalid, illegal or unenforceable in any respect under any applicable Law or as
a matter of public policy, the validity, legality and enforceability of all
other terms and provisions of this Agreement will not in any way be affected or
impaired. If the final judgment of a court of competent jurisdiction or other
Government Authority declares that any term or provision hereof is invalid,
illegal or unenforceable, the Parties agree that the court making such
determination will have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, illegal or unenforceable term or provision with a term
or provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the invalid, illegal or unenforceable term or
provision.

Section 13.06 Assignment. This Agreement will be binding upon and inure to the
benefit of and be enforceable by the respective successors and permitted assigns
of the Parties. No Party may assign (whether by operation of Law or otherwise)
this Agreement or any rights, interests or obligations provided by this
Agreement without the prior written consent of the other Parties; provided,
however, that Seller may assign this Agreement and any or all rights, interests
and obligations under this Agreement to any of its Affiliates upon prior written
notice to Buyer; provided, further, that Buyer may assign any or all rights,
interests and obligations under this Agreement to its lenders providing
financing in connection with the Transactions for collateral security purposes;
provided, further, that no such assignment contemplated by the foregoing clauses
shall release Seller or Buyer, as the case may be, from any Liability or any of
its obligations under this Agreement. Any attempted assignment in violation of
this Section 13.06 shall be void ab initio.

Section 13.07 No Third-Party Beneficiaries. This Agreement and the other
Transaction Agreements are for the sole benefit of the Parties and their
respective successors and permitted assigns, and, except with respect to the D&O
Indemnified Parties pursuant to Section 7.03 and the Seller Indemnified Parties
and Buyer Indemnified Parties as expressly set forth in Article XII, or as
expressly set forth in the applicable Transaction Agreement, nothing in the
Transaction Agreements shall create or be deemed to create any third-party
beneficiary rights in any Person not a party to the Transaction Agreements,
including any Affiliates of any Party. Notwithstanding anything to the contrary
contained in this Agreement, the Financing Sources shall be express third-party
beneficiaries of and entitled to rely on, this Section 13.07 and Section 13.06,
Section 13.12, Section 13.13, Section 13.14, and Section 13.17.

Section 13.08 Entire Agreement. This Agreement (including the Disclosure
Schedules) and the other Transaction Agreements collectively constitute and
contain the entire agreement and understanding of the Parties with respect to
the subject matter hereof and thereof and supersede all prior negotiations,
correspondence, understandings and contracts among the Parties respecting the
subject matter hereof and thereof.

Section 13.09 Amendments. The Transaction Agreements (including all exhibits and
schedules thereto) may be amended, restated supplemented or otherwise modified,
and any provision thereof may be waived, only by written agreement making
specific reference to the applicable Transaction Agreement to be amended,
restated, supplemented or otherwise modified or provision to be waived, in each
case duly executed by each party to such Transaction Agreement.

Section 13.10 Waiver. At any time before the Closing, either Seller or Buyer may
(a) extend the time for the performance of any obligation or other acts of the
other Person, (b) waive any breaches or inaccuracies in the

 

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representations and warranties of the other Person contained in this Agreement
or in any document delivered pursuant to this Agreement, or (c) waive compliance
with any covenant, agreement or condition contained in this Agreement but such
waiver of compliance with any such covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. No failure on the part of any Party to exercise, and no delay in
exercising, any right, power or remedy under any Transaction Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such Party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

Section 13.11 Agreement Controls. In the event that a provision of any other
Transaction Agreement is inconsistent with, conflicts with or contradicts any
term of this Agreement (including, for the avoidance of doubt, any
indemnification provisions), the terms of this Agreement will prevail, unless
and then only to the extent that such Transaction Agreement specifically
provides that a term of this Agreement is being altered, modified, expanded or
diminished, in which case such Transaction Agreement shall govern with respect
to such matter and the remaining terms of this Agreement shall be unaffected.

Section 13.12 Governing Law. Subject to Section 3.05, the Transaction
Agreements, and any Action arising out of or relating in any way to any
Transaction Agreement, whether in contract, tort, common law, statutory law,
equity, or otherwise, including any question regarding its existence, validity,
or scope, or involving the Financing (each, a “Transaction Dispute”), shall be
governed by, construed and enforced in accordance with the Laws of the State of
New York without giving effect to any choice of law rules that would cause the
application of Laws of any jurisdiction other than those of the State of New
York.

Section 13.13 Dispute Resolution; Consent to Jurisdiction.

(a) Except as set forth in Section 3.05 with respect to any dispute to be
resolved by the Independent Accounting Firm, any Transaction Dispute will
exclusively be brought and resolved in the U.S. District Court for the Southern
District of New York (where federal jurisdiction exists) or the Commercial
Division of the Courts of the State of New York sitting in the County of New
York (where federal jurisdiction does not exist), and the appellate courts
having jurisdiction of appeals in such courts. In that context, and without
limiting the generality of the foregoing, each Party irrevocably and
unconditionally:

(i) submits for itself and its property to the exclusive jurisdiction of such
courts with respect to any Transaction Dispute and for recognition and
enforcement of any judgment in respect thereof, and agrees that all claims in
respect of any Transaction Dispute shall be heard and determined in such courts;

(ii) agrees that venue would be proper in such courts, and waives any objection
that it may now or hereafter have that any such court is an improper or
inconvenient forum for the resolution of any Transaction Dispute; and

(iii) agrees that the mailing by certified or registered mail, return receipt
requested, to the Persons listed in Section 13.03 of any process required by any
such court, will be effective service of process; provided, however, that
nothing herein will be deemed to prevent a Party from making service of process
by any means authorized by the Laws of the State of New York.

(b) The foregoing consent to jurisdiction will not constitute submission to
jurisdiction or general consent to service of process in the State of New York
for any purpose except with respect to any Transaction Dispute.

Section 13.14 Waiver of Jury Trial. To the maximum extent permitted by Law, each
Party irrevocably and unconditionally waives any right to trial by jury in any
forum in respect of any Transaction Dispute and covenants that neither it nor
any of its Affiliates or Representatives will assert (whether as plaintiff,
defendant or otherwise) any right to such trial by jury. Each Party certifies
and acknowledges that

 

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(a) such Party has considered the implications of this waiver, (b) such Party
makes this waiver voluntarily and (c) such waiver constitutes a material
inducement upon which such Party is relying and will rely in entering into the
Transaction Agreements. Each Party may file an original counterpart or a copy of
this Section 13.14 with any court as written evidence of the consent of each
Party to the waiver of its right to trial by jury.

Section 13.15 Admissibility into Evidence. All offers of compromise or
settlement among the Parties or their Representatives in connection with the
attempted resolution of any Transaction Dispute (a) shall be deemed to have been
delivered in furtherance of a Transaction Dispute settlement, (b) shall be
exempt from discovery and production and (c) shall not be admissible into
evidence (whether as an admission or otherwise) in any proceeding for the
resolution of the Transaction Dispute.

Section 13.16 Remedies; Specific Performance.

(a) Except to the extent set forth otherwise in this Agreement, all remedies
under this Agreement expressly conferred upon a Party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby, or by Law or equity
upon such Party, and the exercise by a Party of any one remedy will not preclude
the exercise of any other remedy.

(b) Each Party agrees that irreparable damage would occur and the Parties would
not have an adequate remedy at Law if any provision of this Agreement is not
performed in accordance with its specific terms or is otherwise breached.
Accordingly, each Party agrees that the other Parties will be entitled to
injunctive relief from time to time to prevent breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions of this
Agreement without the requirement of posting any bond or other indemnity, in
addition to any other remedy to which it may be entitled, at Law or in equity,
and each Party agrees not to raise any objections to the availability of the
equitable remedy of specific performance to prevent or restrain breaches of this
Agreement, and to specifically enforce the terms of this Agreement to prevent
breaches or threatened breaches of, or to enforce compliance with, the covenants
and obligations of such Party under this Agreement.

Section 13.17 Non-Recourse.

(a) No past, present or future incorporator, stockholder, Representative or
Affiliate of Seller or its Affiliates (including Company and Company Subsidiary)
shall have any Liability for any Liability of Seller under any Transaction
Agreement or for any claim based on, in respect of, or by reason of, any
Transaction.

(b) No Financing Source shall have any Liability arising under, in connection
with or related to this Agreement or for any claim based on, in respect of, or
by reason of this Agreement or its negotiation or execution, and each Party
waives and releases all such claims for Liabilities against any such Financing
Sources. Financing Sources are expressly intended as third-party beneficiaries
of this provision of this Agreement. Section 13.17(b) shall not constitute an
agreement between the Parties, and neither Parent nor Buyer shall have any right
under Section 13.17(b), and Section 13.17(b) shall not affect or amend in any
way any agreements between the Parties provided for in this Agreement.

Section 13.18 Interest. Unless otherwise specified, if any payment required to
be made to a Party under this Agreement is made after the date on which such
payment is due, interest shall accrue on such amount from (but not including)
the due date of the payment to (and including) the date such payment is actually
made at the Interest Rate. All computations of interest pursuant to this
Agreement shall be made on the basis of a year of three hundred sixty five
(365) days, in each case for the actual number of days from (but not including)
the first day to (and including) the last day occurring in the period for which
such interest is payable.

Section 13.19 Disclosure Schedules and Exhibits. The Disclosure Schedules,
Schedules and Exhibits attached to this Agreement shall be construed with and as
an integral part of this Agreement to the same extent as

 

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if the same had been set forth verbatim herein. Any capitalized terms used in
any Exhibit or Schedule or in the Disclosure Schedules but not otherwise defined
therein shall be defined as set forth in this Agreement. The representations and
warranties of Seller set forth in this Agreement are made and given subject to
the disclosures contained in the Disclosure Schedules, and neither Seller nor
any of its Affiliates shall be, or deemed to be, in breach of any such
representations and warranties (and no claim shall lie in respect thereof) in
respect of any such matter so disclosed in the Disclosure Schedules. Inclusion
of information in the Disclosure Schedules will not be construed as an admission
that such information is material to the business, operations or condition
(financial or otherwise) of the Business. The Disclosure Schedules have been
arranged for purposes of convenience in separately titled Schedules
corresponding to the Sections of this Agreement, however, each Schedule of the
Disclosure Schedules (other than the Subject Matter Schedules) shall be deemed
to incorporate by reference all information disclosed in any other Schedule of
the Disclosure Schedules to the extent it is reasonably apparent on its face
that the disclosure of such matter is applicable to such Schedule of the
Disclosure Schedules.

Section 13.20 Privilege.

(a) Each of the Parties acknowledges and agrees that Paul Hastings LLP (“Paul
Hastings”) has acted as counsel to Seller and its Affiliates in connection with
the negotiation of this Agreement and any consummation of the Transactions.

(b) Each of Parent and Buyer consents and agrees to Paul Hastings’s representing
Seller and its Affiliates after the Closing, including with respect to disputes
in which the interests of Seller and its Affiliates may be directly adverse to
Parent or Buyer and their respective Affiliates, and even though Paul Hastings
may have represented Company or Company Subsidiary in a matter substantially
related to any such dispute, or may be handling ongoing matters for Seller and
its Affiliates. Each of Parent and Buyer further consents and agrees to the
communication by Paul Hastings to Seller and its Affiliates in connection with
any such representation of any fact known to Paul Hastings arising by reason of
Paul Hastings’s prior representation of Seller or any of its Affiliates, Company
or Company Subsidiary.

(c) In connection with the foregoing, each of Parent and Buyer irrevocably
waives and agrees not to assert any conflict of interest arising from or in
connection with (i) Paul Hastings’s prior representation of Company or Company
Subsidiary and (ii) Paul Hastings’s representation of Seller and its Affiliates
prior to and after the Closing.

(d) Each of Parent and Buyer further agrees that all communications in any form
or format whatsoever between or among any of Paul Hastings, Company, Company
Subsidiary, any of Seller or its Affiliates, or any of their respective
Representatives that relate in any way to the negotiation, documentation and
consummation of the Transactions, beginning on the date of this Agreement, any
dispute arising under this Agreement (collectively, the “Deal Communications”)
shall be deemed to be retained, owned and controlled collectively by Seller and
shall not pass to or be claimed by Parent or Buyer. All Deal Communications that
are attorney-client privileged (the “Privileged Deal Communications”) shall
remain privileged after the Closing and the privilege and the expectation of
client confidence relating thereto shall belong solely to, and be controlled
solely by, Seller and shall not pass to or be claimed by Parent or Buyer.

(e) In the event that a dispute arises between Parent or Buyer and a third
party, Parent or Buyer, as applicable, may assert the attorney-client privilege
to prevent the disclosure of the Privileged Deal Communications to such third
party; provided, however, that none of Parent, Buyer, Company nor Company
Subsidiary may waive such privilege without the prior written consent of Seller.
In the event that Parent or Buyer, as applicable, is legally required by Order
or otherwise to access or obtain a copy of all or a portion of the Deal
Communications, Parent or Buyer, as applicable, shall immediately (and, in any
event, within three (3) Business Days) notify Seller in writing (including by
making specific reference to this Section) so that Seller can seek a protective
Order, and Parent and Buyer, as applicable, agree to use all commercially
reasonable efforts to assist therewith.

 

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(f) To the extent that files or other materials maintained by Paul Hastings
constitute property of its clients, only Seller shall hold such property rights
and Paul Hastings shall have no duty to reveal or disclose any such files or
other materials or any Deal Communications by reason of any attorney-client
relationship between Paul Hastings, on the one hand, and Buyer or Parent, on the
other hand.

(g) Each of Parent and Buyer agrees that it will not (i) access or use the Deal
Communications, including by way of review of any electronic data,
communications or other information, or by seeking to have Seller or any other
Person waive the attorney-client or other privilege, or by otherwise asserting
that Parent, Buyer, Company or Company Subsidiary has the right to waive the
attorney-client or other privilege or (ii) seek to obtain the Deal
Communications from Paul Hastings. In furtherance of the foregoing, it shall not
be a breach of any provision of this Agreement if, prior to the Closing, Seller,
Company, Company Subsidiary or any of their respective Affiliates or
Representatives take any action to protect from access or remove from the
premises of Company or Company Subsidiary (or any offsite back-up or other
facilities) any Deal Communications, including by segregating, encrypting,
copying, deleting, erasing, exporting or otherwise taking possession of any Deal
Communications (any such action, a “Permitted Removal”). In the event that,
notwithstanding any good-faith attempts by Seller or any of its or its
Affiliates’ respective Representatives to achieve a Permitted Removal of any
Deal Communication, any copy, backup, image, or other form or version or
electronic vestige of any portion of such Deal Communication remains accessible
to or discoverable or retrievable by Parent or Buyer (each, a “Residual
Communication”), each of Parent and Buyer agrees that it will not, and that it
will cause its Affiliates and Representatives not to, intentionally use or
attempt to use any means to access, retrieve, restore, recreate, unarchive or
otherwise gain access to or view any Residual Communication for any purpose.

Section 13.21 Counterparts. Each Transaction Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument. Facsimiles, e-mail
transmission of .pdf signatures or other electronic copies of signatures shall
be deemed to be originals.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, Seller, Parent and Buyer have caused this Stock Purchase
Agreement to be executed on the date first written above by their respective
duly authorized officers.

 

SELLER: GE MEDICAL HOLDING AB By  

/s/ Kieran Murphy

 

  Name: Kieran Murphy   Title: Authorized Signatory

Signature Page to Stock Purchase Agreement

 

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IN WITNESS WHEREOF, Seller, Parent and Buyer have caused this Stock Purchase
Agreement to be executed on the date first written above by their respective
duly authorized officers.

 

PARENT: NEOGENOMICS, INC. By  

/s/ Douglas M. VanOort

  Name: Douglas M. VanOort   Title: Chairman and CEO

 

BUYER: NEOGENOMICS LABORATORIES, INC. By  

/s/ Douglas M. VanOort

 

Name: Douglas M. VanOort

 

Title: Chairman and CEO

Signature Page to Stock Purchase Agreement

 

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EXHIBIT A

DEFINITIONS

“Action” means any action, suit, arbitration, proceeding or investigation by or
before any Government Authority.

“Affiliate” means, with respect to any specified Person, any other Person that,
at the time of determination, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is under common Control with such
specified Person; provided, however, that for the purposes of this Agreement
(a) Seller shall not be deemed an Affiliate of Parent or Buyer, nor, after the
Closing, of Company or Company Subsidiary and (b) after the Closing, Parent and
Buyer shall each be deemed an Affiliate of Company and Company Subsidiary.

“Agreement” means this Stock Purchase Agreement, dated as of October 20, 2015,
by and among Seller, Parent and Buyer, including the Disclosure Schedules and
the Exhibits, and all amendments to such agreement made in accordance with
Section 13.09.

“Antitrust Laws” means the HSR Act and any other antitrust, competition or
pre-merger notification Laws applicable to Parent, Buyer, Seller, Company or
Company Subsidiary under any applicable jurisdiction that are designed to
prohibit, restrict or regulate actions having the purpose or effect of
monopolization , restraint of trade or the lessening of competition, and any
similar Laws designed to regulate, monitor or require the reporting of, or prior
approval for mergers, acquisitions, or foreign investments into a jurisdiction.

“Assets” means the assets and properties that are owned, leased or licensed by
Company and Company Subsidiary; provided, however, that the Assets will not
include any assets or other items listed on Schedule 3.08 or any right, title or
interest therein.

“Bankruptcy and Equity Exception” means the effect on enforceability of (a) any
applicable Law relating to bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or preferential transfers, or similar Law relating to or
affecting creditors’ rights generally and (b) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).

“Business Day” means any day that is not a Saturday, a Sunday or other day on
which commercial banks in the City of New York, New York are required or
authorized by Law to be closed.

“Business Plans” means any Employee Plan maintained exclusively or primarily for
Business Employees.

“Buyer Employee Plans” means (a) all material employee benefit plans (within the
meaning of Section 3(3) of ERISA), (b) all material retirement, superannuation,
welfare benefit, bonus, thirteenth month, stock option, stock purchase, phantom
or stock equivalent, restricted stock, incentive, supplemental retirement,
deferred compensation, profit sharing, retiree health, hospitalization, medical,
dental, vision, life insurance, death benefit, sick pay, disability, severance,
termination indemnity, redundancy pay, educational assistance, holiday pay,
housing assistance, moving expense reimbursement, Code Section 125 flexible
benefit, or vacation plans, programs or agreements and (c) all individual
employment, retention, termination, severance or other similar agreements of
Buyer and Parent.

“Buyer Lab Testing Services” means, since September 30, 2009, all clinical
laboratory testing services offered, sold or performed by Parent or Buyer on
behalf of any client.

“Buyer Material Adverse Effect” means any change, effect, event, occurrence,
state of facts or development that, individually or in the aggregate, is
materially adverse to the business, operations, assets, condition (financial or
otherwise) or results of operations of Parent or Buyer, taken as a whole;
provided,

 

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however, that any adverse effect arising out of, resulting from or attributable
to (a) an event or circumstances or series of events or circumstances affecting
(i) the U.S., Canada or Mexico (or any other country or jurisdiction) or the
global economy generally or capital, financial, banking, credit or securities
markets generally, including changes in interest or exchange rates,
(ii) political conditions generally of the U.S. or any other country or
jurisdiction in which Parent or its Affiliates operates or (iii) any industry
generally in which Parent or any customers thereof operates or in which products
or services of Parent are used or distributed; (b) the negotiation, execution,
pendency or the announcement of, the consummation of the Transactions
contemplated by, or the performance of obligations under, this Agreement or any
other Transaction Agreement, including adverse effects related to compliance
with the covenants or agreements contained herein or the failure to take any
action as a result of any restrictions or prohibitions set forth herein, and any
adverse effect proximately caused by (i) shortfalls or declines in revenue,
margins or profitability, (ii) threatened or actual loss of, or disruption in,
any customer, supplier, vendor, employee or landlord relationships, or
(iii) loss of any personnel; (c) any effect resulting from any publicly
available statement made by Seller, Company, Company Subsidiary or any of their
respective Affiliates concerning Parent or Buyer or any of their respective
employees, customers or suppliers, or otherwise relating to the Transactions;
(d) any changes in applicable Law or GAAP, or accounting principles, practices
or policies Parent is required to adopt, or the enforcement or interpretation
thereof; (e) actions specifically permitted to be taken or omitted pursuant to
this Agreement or actions taken or omitted to be taken at the request or with
the consent of Seller, including any changes or effects that are caused by
actions taken or omitted to be taken at the request of Seller, or that are
caused by Seller’s failure to consent to any of the actions restricted by
Section 6.01(b); (f) the effect of any action taken by Seller, Company, Company
Subsidiary or their respective Affiliates with respect to any Transaction or
with respect to Parent or its Affiliates; (g) any acts of God, including any
earthquakes, hurricanes, tornadoes, floods, tsunami, or other natural disasters,
or any other damage to or destruction of Assets caused by casualty; (h) any
hostilities, acts of war (whether or not declared), sabotage, terrorism or
military actions, or any escalation or worsening of any such hostilities, act of
war, sabotage, terrorism or military actions; (i) any failure to meet internal
or published projections, estimates or forecasts of revenues, earnings, or other
measures of financial or operating performance for any period (provided that the
underlying causes of such failures (subject to the other provisions of this
definition) shall not be excluded); (j) any adverse change or effect that is
cured before Closing; (k) the loss of one or more material contracts other than
expressly pursuant to the “for cause” provisions of the applicable material
contract or the filing of, or announcement of an intent to file, any challenge
to the bidding process for any material contract or the negotiation or execution
of any material contract; (l) any matter disclosed in the Disclosure Schedules
shall not constitute or be deemed to contribute to a Buyer Material Adverse
Effect, (m) changes or effects that are caused by any delay in consummating the
Closing as a result of (i) any violation or breach by Seller of any covenant,
representation or warranty contained in this Agreement or (ii) the institution
of any Action challenging the validity or legality, or seeking to restrain the
consummation of, the Transactions; or (n) the initiation by any Person other
than Parent or Buyer of proceedings under Chapter 11 of the U.S. Bankruptcy Code
or other similar statutes or Laws or any adverse developments related to such
proceedings, and otherwise shall not be taken into account in determining
whether a Buyer Material Adverse Effect has occurred or would be reasonably
likely to occur; except in the case of the immediately preceding clauses (a),
(d), (g) and (h), to the extent the changes described therein have a materially
disproportionate effect on Buyer or Parent, taken as a whole, relative to the
effect on other Persons operating in the same industries in which Buyer and
Parent operate.

“Buyer Required Notices” means the notifications by Buyer set forth on
Schedule 10.01(b).

“Buyer Transaction Agreements” means this Agreement and each other Transaction
Agreement to which Buyer is named as a party on the signature pages thereto.

“Buyer Transactions” means the transactions contemplated by the Buyer
Transaction Agreements.

“Cash” means Company’s and Company Subsidiary’s aggregate unrestricted cash or
cash equivalents (including bank account balances and marketable securities), as
determined in accordance with GAAP, and

 

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calculated net of issued but uncleared checks, drafts and overdrafts and in each
case, calculated without giving effect to any of the transactions contemplated
by this Agreement.

“Closing Conditions” means conditions to the respective obligations of the
Parties to consummate the transactions contemplated by this Agreement, as set
forth in Article X.

“Code” means the U.S. Internal Revenue Code of 1986.

“Company Acquisition Proposal” means, other than the transactions contemplated
by this Agreement or other proposal or offer from Buyer or any of its
Affiliates, any expression of interest, proposal or offer (whether or not in
writing) involving: (i) the sale, lease, exchange, transfer, license,
disposition (including by way of liquidation or dissolution of Company or
Company Subsidiary or by way of the sale of the Shares or any Equity Interests
of Company or Company Subsidiary) or acquisition of the Business or Assets that,
in any such case, constitute or account for ten percent (10%) or more of the
consolidated net revenues, net income or net assets of Company or Company
Subsidiary, taken as a whole; (ii) any merger, consolidation, amalgamation,
share exchange, business combination, issuance of securities, acquisition of
securities, recapitalization, tender offer, exchange offer or other similar
transaction (A) in which a Person or “group” (as defined in the Exchange Act) of
Persons directly or indirectly acquires beneficial or record ownership of
securities representing more than ten (10%) of the outstanding securities of any
class of voting securities of Company or Company Subsidiary or (B) in which
Company or Company Subsidiary issues securities representing more than ten
(10%) of any class of its outstanding voting securities; or (iii) the creation
of additional seats on Company or Company Subsidiary’s board of directors or
granting any Person the right to nominate or appoint a director to Company or
Company Subsidiary’s board of directors.

“Company Intellectual Property” means the Company Registered IP and all other
Intellectual Property that is owned by either of Company or Company Subsidiary.

“Company Material Adverse Effect” means any change, effect, event, occurrence,
state of facts or development that, individually or in the aggregate, is
materially adverse to the business, operations, assets, condition (financial or
otherwise) or results of operations of the Business, taken as a whole; provided,
however, that any adverse effect arising out of, resulting from or attributable
to (a) an event or circumstances or series of events or circumstances affecting
(i) the U.S., Canada or Mexico (or any other country or jurisdiction) or the
global economy generally or capital, financial, banking, credit or securities
markets generally, including changes in interest or exchange rates,
(ii) political conditions generally of the U.S. or any other country or
jurisdiction in which Seller, Company, Company Subsidiary or their respective
Affiliates operates or (iii) any industry generally in which Company, Company
Subsidiary or any customers thereof operates (including any Material Contracts)
or in which products or services of the Business are used or distributed;
(b) the negotiation, execution, pendency or the announcement of, the
consummation of the Transactions contemplated by, or the performance of
obligations under, this Agreement or any other Transaction Agreement, including
adverse effects related to compliance with the covenants or agreements contained
herein or the failure to take any action as a result of any restrictions or
prohibitions set forth herein, and any adverse effect proximately caused by
(i) shortfalls or declines in revenue, margins or profitability, (ii) threatened
or actual loss of, or disruption in, any customer, supplier, vendor, employee or
landlord relationships, or (iii) loss of any personnel; (c) any effect resulting
from any publicly available statement made by Parent or Buyer or any of its
Affiliates concerning Company, Company Subsidiary, the Business, or any
employees, customers or suppliers of the Business, or otherwise relating to the
Transactions; (d) any changes in applicable Law or GAAP, or accounting
principles, practices or policies Company or Company Subsidiary is required to
adopt, or the enforcement or interpretation thereof; (e) actions specifically
permitted to be taken or omitted pursuant to this Agreement or actions taken or
omitted to be taken at the request or with the consent of Parent or Buyer,
including any changes or effects that are caused by actions taken or omitted to
be taken at the request of Parent or Buyer, or that are caused by Parent’s or
Buyer’s failure to consent to any of the actions restricted by Section 6.01(a);
(f) the effect of any action taken by Parent or Buyer or its Affiliates with
respect to any Transaction or with respect to Seller, Company, Company
Subsidiary or their

 

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respective Affiliates; (g) any acts of God, including any earthquakes,
hurricanes, tornadoes, floods, tsunami, or other natural disasters, or any other
damage to or destruction of Assets caused by casualty; (h) any hostilities, acts
of war (whether or not declared), sabotage, terrorism or military actions, or
any escalation or worsening of any such hostilities, act of war, sabotage,
terrorism or military actions; (i) any failure to meet internal or published
projections, estimates or forecasts of revenues, earnings, or other measures of
financial or operating performance for any period (provided that the underlying
causes of such failures (subject to the other provisions of this definition)
shall not be excluded); (j) any adverse change or effect that is cured before
Closing; (k) the loss of one or more Material Contracts other than expressly
pursuant to the “for cause” provisions of the applicable Material Contract or
the filing of, or announcement of an intent to file, any challenge to the
bidding process for any Material Contract or the negotiation or execution of any
Material Contract; (l) any matter disclosed in the Disclosure Schedules shall
not constitute or be deemed to contribute to a Company Material Adverse Effect,
(m) changes or effects that are caused by any delay in consummating the Closing
as a result of (i) any violation or breach by Parent or Buyer of any covenant,
representation or warranty contained in this Agreement or (ii) the institution
of any Action challenging the validity or legality, or seeking to restrain the
consummation of, the Transactions; or (n) the initiation by any Person other
than Seller, Company or Company Subsidiary of proceedings under Chapter 11 of
the U.S. Bankruptcy Code or other similar statutes or Laws or any adverse
developments related to such proceedings, and otherwise shall not be taken into
account in determining whether a Company Material Adverse Effect has occurred or
would be reasonably likely to occur; except in the case of the immediately
preceding clauses (a), (d), (g) and (h), to the extent the changes described
therein have a materially disproportionate effect on the Company or Company
Subsidiary, taken as a whole, relative to the effect on other Persons operating
in the same industries in which Company and Company Subsidiary operate.

“Company Registered IP” means the active patents, patent applications,
registered trademarks, registered service marks, and copyright registrations
that are owned by Company and Company Subsidiary.

“Company Technology” means all Technology owned by either of Company or Company
Subsidiary.

“Confidentiality Agreement” the means the Confidentiality Agreement dated
January 20, 2015, by and between Parent and Seller, as the same may be amended
from time to time in accordance with its terms.

“Consent” means any consent, approval or authorization.

“Control” means, as to any Person, the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise. The terms “Controlled by”,
“Controlled”, “under common Control with” and “Controlling” shall have
correlative meanings.

“Conversion Shares” means the shares of Common Stock to be issued upon
conversion of the Parent Preferred Stock.

“CPS” means Clarient Pathology Services, Inc., a California professional medical
corporation.

“Debt” means financial indebtedness for borrowed money from third party lending
sources, other than trade accounts payable.

“Disclosure Schedules” means the disclosure schedules dated as of the Agreement
Date delivered by Seller to Buyer, and which form a part of this Agreement.

“Effective Time” means 11:59 p.m. (Pacific time) on the Closing Date.

“Employee Plans” means (a) all material employee benefit plans (within the
meaning of Section 3(3) of ERISA) (other than the individual agreements
described in clause (iii) below relating to employees of the Business located
outside of the U.S.), (b) all material retirement, superannuation, welfare
benefit, bonus,

 

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thirteenth month, stock option, stock purchase, phantom or stock equivalent,
restricted stock, incentive, supplemental retirement, deferred compensation,
profit sharing, retiree health, hospitalization, medical, dental, vision, life
insurance, death benefit, sick pay, disability, severance, termination
indemnity, redundancy pay, educational assistance, holiday pay, housing
assistance, moving expense reimbursement, Code Section 125 flexible benefit, or
vacation plans, programs or agreements and (c) all individual employment,
retention, termination, severance or other similar agreements, in each case
pursuant to which any of Company, Company Subsidiary or their respective
Affiliates currently has any obligation with respect to any Business Employee,
other than governmental plans or arrangements, including severance, termination
indemnities or other similar benefits maintained for employees outside of the
U.S.

“Environmental Law” means any applicable Law in effect as of the Agreement Date
relating to protection of the environment, including the use, handling,
transportation, treatment, storage, disposal, release or threat of release or
discharge of Hazardous Materials.

“Environmental Permit” means any Permit that is required by a Government
Authority under any Environmental Law and necessary to the operation of the
Business as of the Agreement Date.

“Equity Interest” means (i) with respect to a corporation, any and all classes
or series of shares of capital stock, (ii) with respect to a partnership,
limited liability company, trust or similar Person, any and all classes or
series of units, interests or other partnership/limited liability company
interests and (iii) with respect to any other entity, any other security
representing ownership interest or participation in such entity.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder.

“Estimated Working Capital” means Seller’s good faith estimate of Net Working
Capital of Company as of the Effective Time.

“Estimated Working Capital Decrease” means the amount, if any, by which Target
Working Capital exceeds Estimated Working Capital set forth on the Estimated
Working Capital Statement.

“Estimated Working Capital Increase” means the amount, if any, by which
Estimated Working Capital set forth on the Estimated Working Capital Statement
exceeds Target Working Capital.

“Estimated Working Capital Statement” means a written statement of Estimated
Working Capital, prepared in accordance with Section 3.07.

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

“Federal Health Care Program” means any plan or program that provides health
care benefits, whether directly, through insurance, or otherwise, that is funded
directly, in whole or in part, by the government of the United States of America
(other than the Federal Employees Health Benefits Program), including the
Medicare, Medicaid and TRICARE programs (described in Title XVIII of the SSA,
Title XIX of the SSA, and Title 10, Chapter 55 of the U.S.C., respectively), or
any state health care program (as defined in Section 1128(h) of the SSA).

“Final Cash” means the calculation of Cash as of the Effective Time as finally
determined pursuant to Section 3.05.

“Final Indebtedness” means the calculation of Indebtedness as of the Effective
Time as finally determined pursuant to Section 3.05.

 

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“Final Working Capital” means the calculation of Net Working Capital of Company
as of the Effective Time as finally determined pursuant to Section 3.05.

“Final Working Capital Decrease” means the amount (if any) by which Target
Working Capital exceeds Final Working Capital.

“Final Working Capital Increase” means the amount (if any) by which Final
Working Capital exceeds Target Working Capital.

“Final Working Capital Statement” means a written statement (a) setting forth
Final Working Capital, the Final Working Capital Increase or Final Working
Capital Decrease, as applicable, and the Post-Closing Adjustment and
(b) indicating any changes to the Estimated Working Capital Statement as finally
determined pursuant to Section 3.05.

“Financing Discussions” means any discussions with potential sources of capital
with parties that may purchase Equity Interests in Parent as part of a Permitted
Financing.

“Financing Sources” means the Persons that have delivered the Commitment
Letters, together with such Persons’ Affiliates and their and their Affiliates’
respective, officers, directors, employees and representatives.

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

“Government Authority” means any government or governmental or regulatory
entity, body thereof or political subdivision thereof, whether federal,
national, state, provincial, local, municipal or foreign, or any agency,
instrumentality or authority thereof or any other entity exercising executive,
legislative, judicial, regulatory or administrative functions or pertaining to
government, including any department, board, commission, court, tribunal or
arbitral body.

“Hazardous Materials” means (a) petroleum, petroleum products, by-products or
breakdown products, radioactive materials, friable asbestos or polychlorinated
biphenyls, and (b) any chemical, material or substance defined or regulated as
toxic or as a pollutant, contaminant or waste under any applicable Environmental
Law.

“Healthcare Law” means any Law relating to the regulation of the healthcare or
clinical laboratory industry or to the payment for services rendered by
healthcare providers, including, without limitation: Title XVIII of the SSA
(Medicare); Title XIX of the SSA (Medicaid); Title 10, Chapter 55 of the U.S.C.
(TRICARE); the Federal Anti-Kickback Law (42 U.S.C. § 1320a-7b); the Stark Law
(42 U.S.C. § 1395nn); the Federal False Claims Act (31 U.S.C. §§ 3729, et seq.);
the Federal Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a); the Federal
Program Fraud Civil Remedies Act (31 U.S.C. § 3801 et seq.); the Federal Health
Care Fraud law (18 U.S.C. § 1347); the criminal false claims statutes (e.g., 18
U.S.C. §§ 287 and 1001); the Medicare Secondary Payor Statute (32 U.S.C. §
1395y(b)); the Federal Food, Drug and Cosmetic Act (21 U.S.C. § 321 et seq.) and
all regulations promulgated thereunder; the Health Insurance Portability and
Accountability Act of 1996 as amended by the Health Information Technology for
Economic and Clinical Health Act of 2009, and their implementing regulations and
any state health care privacy, security or confidentiality Laws; the Patient
Protection and Affordable Care Act (Pub. L 111-148) as amended by the Health
Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) and the
regulations adopted thereunder; Laws pertaining to licensure, certification,
registration or operation requirements of healthcare facilities, services or
equipment, including, but not limited to, the Clinical Laboratory Improvement
Amendments, as amended; CMS manual guidance, and applicable Medicare
administrative contractor guidance pertaining to coding, coverage,
reimbursement, claims submission, billing and collections; state certificate of
need or similar Laws governing the establishment of healthcare facilities or
service or the making of healthcare capital expenditures; state Laws relating to
fee-splitting, patient brokering or the corporate practice of medicine; and any
state physician self-referral prohibition or state anti-kickback Laws.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

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“Indebtedness” means with respect to Company and Company Subsidiary, (a) the
principal of and premium (if any) in respect of (i) financial indebtedness for
borrowed money from third party lending sources, other than trade accounts
payable; and (ii) any notes, debentures, bonds, letters of credit or other
similar instruments or debt securities for the payment of which Company or
Company Subsidiary is responsible or liable; (b) all obligations issued or
assumed as the deferred purchase price of assets, properties or services (but
excluding trade accounts payable and accrued expenses arising in the ordinary
course of business) including earn-outs, payments under non-compete agreements
and seller notes; (c) all obligations as lessee under leases which are required
under GAAP to be treated as capital leases; (d) all obligations of any Person
which are guaranteed by Company or Company Subsidiary; and (e) all accrued
interest, prepayment premiums, penalties, fees and other amounts related to any
item listed in clauses (a) through (d) above.

“Intellectual Property” means all of the following rights arising under the Laws
of the U.S. or any other country: (a) patent rights, including any such rights
granted upon any utility, reissue, reexamination, division, extension,
provisional, continuation, or continuation-in-part applications, and equivalent
or similar rights anywhere in the world in inventions and discoveries,
(b) rights associated with works of authorship, other than rights associated
with Software, whether or not registered, and registrations and applications for
registration thereof, and all rights therein provided by international treaties
or conventions, and (c) rights in trade secrets and other confidential
information (including ideas, formulas, inventions, know-how, processes and
techniques). For the avoidance of doubt, for the purposes of this Agreement,
Intellectual Property excludes any and all rights of any kind or nature in or to
Software, trademarks, service marks, trade names, service names, domain names,
trade dress, logos and other identifiers of same, including all goodwill
associated therewith, and all common law rights, and registrations and
applications for registration thereof, all rights therein provided by
international treaties or conventions, and all reissues, extensions and renewals
of any of the foregoing.

“Interest Rate” means the rate designated from time to time in
Section 6621(a)(2) of the Code, compounded on a daily basis.

“IRS” means the U.S. Internal Revenue Service.

“Knowledge of Parent” means the actual knowledge, without any duty of
investigation or inquiry, of the following Persons as of the Agreement Date:
Douglas VanOort, Steven Jones, George Cardoza and Dr. Maher Albitar.

“Knowledge of Seller” means the actual knowledge, without any duty of
investigation or inquiry, of the following Persons as of the Agreement Date:
Michael Brown, Cindy Collins, Dr. Kenneth Bloom, Michael Horey, Brian
Montgomery, Mark Machulz, Edward Menezes, and J. Allan Cotton.

“Law” means any U.S. federal, state, local or non-U.S. statute, law, ordinance,
regulation, rule, code, Order or other requirement or rule of law (including
common law).

“Leased Real Property” means any real property that is leased by Company or
Company Subsidiary.

“Liabilities” means any liability, debt, guarantee, assurance, commitment or
obligation, whether known or unknown, fixed, absolute or contingent, matured or
unmatured, accrued or unaccrued, liquidated or unliquidated, asserted or
unasserted, due or to become due, whenever or however arising (including whether
arising by operation of Law, or out of any contract or tort based on negligence
or strict liability).

“Lien” means any mortgage, deed of trust, pledge, hypothecation, security
interest, encumbrance, claim, lien or charge of any kind.

“Losses” means all losses, damages, costs, expenses, and liabilities actually
suffered or incurred and paid (including reasonable attorneys’ fees); provided
that Losses shall not include a decrease in Parent’s stock price,

 

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which causes a corresponding decrease in the value of the Stock Consideration,
except that the exclusion of such decrease from Loss shall not preclude Seller
from asserting an indemnification claim in accordance with Article XII to the
extent of a breach by Buyer or Parent of this Agreement arising out of,
resulting from or relating to the underlying facts and circumstances causing or
contributing to such decrease.

“Material Customers” means the ten (10) largest customers of the Business based
on aggregate revenues derived from sales to those customers for fiscal
year 2014.

“Material Suppliers” means the ten (10) largest suppliers of the Business based
on the aggregate amount purchased from each such supplier for fiscal year 2014.

“Medicare” means the program of health benefits for the aged and disabled
administered by the Centers for Medicare and Medicaid Services, and any
successor governmental entity, pursuant to the terms of Title XVIII of the
Social Security Act, codified at 42 U.S.C. § 1395 et seq.

“NASDAQ Rules” means the Listing Rules of the NASDAQ Stock Market.

“Net Working Capital” as of any date means (a) the current assets of Company as
of the Effective Time minus (b) the current Liabilities of Company as of the
Effective Time, in each case established in accordance with the Sample Net
Working Capital Statement.

“Net Working Capital Statements” means, collectively, the Estimated Working
Capital Statement, Proposed Working Capital Statement and the Final Working
Capital Statement.

“OFAC Regulation” means the Foreign Assets Control Regulations, 31 C.F.R.,
Subtitle B, Chapter V, as amended.

“Order” means any order, writ, judgment, injunction, temporary restraining
order, decree, stipulation, determination or award entered by or with any
Government Authority.

“Owned Real Property” means any real property owned by Company or Company
Subsidiary.

“Parent Acquisition Proposal” means, other than the transactions contemplated by
this Agreement or other proposal or offer from Seller or any of its Affiliates,
any expression of interest, proposal or offer (whether or not in writing)
involving: (i) the sale, lease, exchange, transfer, license, disposition
(including by way of liquidation or dissolution of Parent or any of its
Subsidiaries or by way of the sale of any stock of Subsidiary of Parent) or
acquisition of any business or businesses or assets (including any acquisition
of stock of any entity) that, in any such case, constitute or account for 10% or
more of the consolidated net revenues, net income or net assets of Parent and
its Subsidiaries, taken as a whole; (ii) any merger, consolidation,
amalgamation, share exchange, business combination, issuance of securities,
acquisition of securities, recapitalization, tender offer, exchange offer or
other similar transaction (A) in which a Person or “group” (as defined in the
Exchange Act) of Persons directly or indirectly acquires beneficial or record
ownership of securities representing more than 20% of the outstanding securities
of any class of voting securities of Parent or (B) in which Parent issues
securities representing more than 20% of any class of its outstanding voting
securities; or (iii) the creation of additional seats on the Parent Board or
granting any Person the right to nominate or appoint a director to the Parent
Board.

“Parent Board” means the board of directors of Parent.

“Parent Intellectual Property” means the Parent Registered IP and all other
Intellectual Property that is owned by either Parent or Buyer.

“Parent Registered IP” means all active patents, patent applications, registered
trademarks, registered service marks, and copyright transactions that are owned
by Parent and Buyer.

 

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“Parent Technology” means all Technology owned by either of Parent or Buyer.

“Parent Stock Options” means options to purchase Equity Interests of Parent
granted under any Parent Stock Plan.

“Parent Stock Plans” means any employee or director stock option, stock purchase
or equity compensation plan, arrangement or agreement of Parent.

“Parent Transaction Agreements” means this Agreement and each other Transaction
Agreement to which Parent is named as a party on the signature pages thereto.

“Parent Transactions” means the transactions contemplated by the Parent
Transaction Agreements.

“Permits” means all permits, licenses, Consents, registrations, concessions,
grants, franchises, certificates, identification numbers exemptions, waivers,
and filings issued or required by any Government Authority under applicable Law.

“Permitted Financing” means a financing (x) the proceeds of which are used to
finance the Cash Purchase Price Increase Amount and (y) that is consummated
through the issuance of solely Common Stock and/or through the incurrence of
Debt so long as such Debt is not convertible into, or exchangeable or
exercisable for, Equity Interests of Parent or any of its Subsidiaries.

“Permitted Liens” means the following Liens: (a) Liens for Taxes, assessments or
other governmental charges or levies that are not yet due or payable or that are
being contested in good faith by appropriate proceedings or that may thereafter
be paid without penalty; (b) Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, workmen, repairmen and other Liens imposed
by Law and on a basis consistent with past practice; (c) Liens incurred or
deposits made in the ordinary course of business consistent with past practice
in connection with workers’ compensation, unemployment insurance or other types
of social security; (d) defects or imperfections of title, easements, covenants,
rights-of-way, restrictions and other similar charges or encumbrances not
materially interfering with the ordinary conduct of business; (e) Liens not
created by Seller, Company or Company Subsidiary that affect the underlying fee
interest of any Leased Real Property; (f) Liens incurred in the ordinary course
of business consistent with past practice securing Liabilities that are not
material to the Assets; (g) Liens created by or through, or resulting from any
facts or circumstances relating to, Parent or its Affiliates; (h) Liens arising
out of, under or in connection with this Agreement or the other Transaction
Agreements, (i) any set of facts an accurate up-to-date survey would show,
provided such facts do not materially interfere with the ordinary conduct of the
Business; and (j) in the case of Intellectual Property and Technology, licenses,
options to license or covenants not to assert claims of infringement in each
case in existence as of the Agreement Date from Seller or any of their
Affiliates to third parties.

“Person” means any natural person, general or limited partnership, corporation,
company, trust, limited liability company, limited liability partnership, firm,
association or organization or other legal entity.

“Post-Closing Adjustment” means the aggregate amount obtained as follows:
(a) the amount obtained by subtracting (i) the amount (if any) by which
Estimated Working Capital exceeds Final Working Capital from (ii) the amount (if
any) by which Final Working Capital exceeds Estimated Working Capital, plus
(b) the amount obtained by subtracting (i) the amount (if any) by which
Estimated Cash exceeds Final Cash from (ii) the amount (if any) by which Final
Cash exceeds Estimated Cash, plus (c) the amount obtained by subtracting (i) the
amount (if any) by which Final Indebtedness exceeds Estimated Indebtedness from
(ii) the amount (if any) by which Estimated Indebtedness exceeds Final
Indebtedness.

“Pre-Closing Period” means the period beginning on the Agreement Date and ending
on the earlier of the Closing Date and the date this Agreement is terminated in
accordance with its terms.

 

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“Preferred Stock” means Parent’s Series A Preferred Stock, par value $0.001 per
share.

“Prohibited Person” means (i) a Person who is a “designated national,”
“specially designated national,” “specially designated terrorist,” “specially
designated global terrorist,” “foreign terrorist organization,” “specially
designated narcotics trafficker,” or “blocked person,” within the definitions
set forth in the OFAC Regulations, or who otherwise appears on the list of
Specially Designated Nationals and Blocked Persons, Appendix A to the OFAC
Regulations or any other similar list published by OFAC, (ii) the government,
including any political subdivision, agency, instrumentality, or national
thereof, of any country against which the United States maintains economic
sanctions or embargos, (iii) a Person acting or purporting to act, directly or
indirectly, on behalf of, or an entity owned or controlled by, any of the
Persons listed in subparagraphs (i)-(ii) above, (iv) a Person indicted for or
convicted of violating any of the U.S. criminal statutes listed in 22
CFR 120.27, or (v) a Person on any other export control, terrorism, money
laundering or drug trafficking related list administered by any Government
Authority either within or outside the U.S. as that list may be amended,
adjusted or modified from time to time.

“Proposals” means the proposals for (i) the Transaction Approval; (ii) the
approval of the Stock Issuance in compliance with the NASDAQ Rules, (iii) the
approval of the amendment to Parent’s organizational documents increasing the
authorized number of shares of (x) Common Stock from one hundred million
(100,000,000) shares to two hundred fifty million (250,000,000) shares and
(y) Preferred Stock from ten million (10,000,000) shares to fifty million
(50,000,000) shares; (iv) the solicitation of additional proxies if there are
insufficient votes in favor of adoption of the Stock Issuance; and (v) the
approval to increase the number of stock options available for issuance under
Parent’s stock option plan.

“Proposed Working Capital” means Buyer’s good faith, proposed final calculation
of Net Working Capital of Company as of the Effective Time.

“Proposed Working Capital Statement” means (a) a written statement setting forth
Proposed Working Capital, describing in reasonable detail any proposed changes
to the Estimated Working Capital Statement and attaching supporting schedules,
working papers and all other relevant details to enable a review by Seller
thereof (together with all supporting work papers with respect thereto) or (b) a
written statement that Buyer proposes no changes to the Estimated Working
Capital Statement, as applicable.

“Real Properties” means, collectively, the Owned Real Property and the Leased
Real Property.

“Representative” of a Person means the directors, officers, employees, advisors,
agents, consultants, attorneys, accountants, investment bankers or other
representatives of such Person.

“Required Approvals” means the approvals set forth on Schedule 10.01(b).

“Sample Net Working Capital Statement” means the sample statement of Net Working
Capital attached to this Agreement as Exhibit L.

“Sanctions Laws” means (a) sanctions Laws administered or enforced by the
U.S. Department of Treasury’s Office of Foreign Assets Control, the
U.S. Department of State, the U.S. Department of Commerce’s Bureau of Industry
and Security, including any requirements imposed by, or based upon the
obligations or authorities set forth in the U.S. Trading With the Enemy Act, the
U.S. International Emergency Economic Powers Act, the U.S. United Nations
Participation Act, the U.S. Syria Accountability and Lebanese Sovereignty Act,
Iranian Transaction Regulations, the Comprehensive Iran Sanctions Accountability
and Divestment Act of 2010, the Iran Sanctions Act, the National Defense
Authorization Acts for Fiscal Years 2012 and 2013, the Iran Threat Reduction,
and Syria Human Rights Act of 2012, any of the foreign assets control
regulations of the U.S. Department of Treasury (including 31 CFR, Subtitle B,
Chapter V), any enabling legislation or executive order relating thereto, or any
similar sanctions imposed or administered by or based upon the obligations or

 

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authorities of Her Majesty’s Treasury, the European Union, the United Nations
Security Council, or other applicable sanctions authority and (b) any
anti-terrorism or anti-money laundering Law.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, and the rules and
regulations promulgated thereunder.

“SEC” means the United States Securities and Exchange Commission.

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

“Seller Account” means the bank account or accounts specified by Seller in
writing to Buyer at least two (2) Business Days before the Closing Date.

“Seller Business Records” means all books and records (including emails of all
past and current Business Employees) of the Company and Company Subsidiary
(provided that any information in such books and records (including emails) that
is not related to Company, Company Subsidiary or the Business may be redacted or
otherwise removed therefrom) which reside anywhere other than on the premises of
any Company or Company Subsidiary facility or on servers or other computers that
will be transferred to Buyer pursuant to the Transaction.

“Seller Lab Testing Services” means, since September 30, 2009, all clinical
laboratory testing services offered, sold or performed by Company, Company
Subsidiary or CPS on behalf of any client.

“Seller Names and Seller Marks” means the names or marks of Seller or any of its
Affiliates, including “GE” (in block letters or otherwise), the GE monogram,
“General Electric Company”, “General Electric”, “MultiOmyx”, and
“healthymagination”, either alone or in combination with other words and all
marks, trade dress, logos, monograms, domain names and other source identifiers
confusingly similar to or embodying any of the foregoing either alone or in
combination with other words.

“Seller Required Notices” means the notifications by Seller set forth on
Schedule 10.01(b).

“Seller Transaction Agreements” means this Agreement and each other Transaction
Agreement to which Seller is named as a party on the signature pages thereto.

“Seller Transactions” means the transactions contemplated by the Seller
Transaction Agreements.

“Shared Contract” means any written contract or agreement to which Company or
Company Subsidiary is a party that is used by the Business but is not a contract
or agreement exclusively relating to or exclusively held or used in or in
connection with the Business.

“Social Security Act” means the Social Security Act of 1935.

“Software” means all (a) computer programs, including all software
implementation of algorithms, models and methodologies, whether in source code,
object code, human readable form or other form, (b) databases and compilations,
including all data and collections of data, whether machine readable or
otherwise, (c) descriptions, flow charts and other work products used to design,
plan, organize and develop any of the foregoing, screens, user interfaces,
report formats, firmware, development tools, templates, menus, buttons and
icons, and (d) all documentation including user manuals and other training
documentation relating to any of the foregoing.

“SSA” means the United States Social Security Act, codified at Title 42,
Chapter 7, of the United States Code.

 

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“Subject Matter Schedules” means the Schedules pursuant to Sections 4.10
(Permits), 4.11 (Compliance with Healthcare Laws), 4.12 (Ethical Practices),
4.13 (Intellectual Property), 4.14 (Environmental Matters), 4.16 (Employment and
Employee Benefits Matters), 4.17 (Taxes), 4.18 (Real Property), 5.07 (Permits),
5.08 (Compliance with Healthcare Laws), 5.09 (Ethical Practices), 5.21
(Intellectual Property), 5.22 (Environmental Matters), 5.23 (Employment and
Employee Benefits Matters), 5.24 (Taxes) and 5.25 (Real Property).

“Subsidiary” of any specified Person means any other Person of which such first
Person owns (either directly or through one or more other Subsidiaries) a
majority of the outstanding equity securities or securities carrying a majority
of the voting power in the election of the board of directors or other governing
body of such Person, and with respect to which entity such first Person is not
otherwise prohibited contractually or by other legally binding authority from
exercising Control.

“Superior Proposal” means any Parent Acquisition Proposal (i) on terms which the
Parent Board determines in good faith, after consultation with Parent’s outside
legal counsel and financial advisors, to be more favorable from a financial
point of view to Parent’s stockholders, taking into account all the terms and
conditions of such proposal (including the likelihood and timing of
consummation), and this Agreement (including any revisions to the terms of this
Agreement in response to such proposal or otherwise) and (ii) that the Parent
Board believes is reasonably capable of being completed, taking into account
such financial, regulatory, legal and other aspects of such proposal the Parent
Board considers appropriate; provided, that for purposes of the definition of
“Superior Proposal,” the references to “ten percent (10%)” in the definition of
Parent Acquisition Proposal shall be deemed to be references to “50%.”

“Target Working Capital” means $27,000,000.

“Tax” or “Taxes” means any federal, state, provincial, local, foreign or other
income, excise, gross receipts, ad valorem, value-added, sales, use, employment,
franchise, profits, gains, capital gains, personal property, real property,
transfer, payroll, branch, net worth, production, license, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, transfer, withholding, social security premiums (or similar), employer
health, unemployment, disability, registration, alternative, or add-on minimum,
government pension plan premiums and contributions, employment/unemployment
insurance or compensation premiums and contributions, workers’ compensation
premiums, goods and services tax/harmonized sales tax, estimated, intangibles or
other taxes, charges or levies of any kind whatsoever and any installment in
respect thereof (whether payable directly or by withholding), together with any
interest and any penalties, additions to tax or additional amounts imposed by
any Government Authority with respect thereto, whether disputed or not.

“Tax Claim” shall mean any claim by an Taxing Authority.

“Tax Returns” means all returns, reports, elections, declarations, disclosures,
estimates, claims for refunds, statements, information returns, or other
documents filed or required to be filed with any Government Authority relating
to Taxes (including any related or supporting information any schedule or
attachment thereto and any amendment or supplement thereof).

“Taxing Authority” means any Government Authority (including any subdivision and
any revenue agency of a jurisdiction) imposing or responsible for the
administration of any Taxes and the agencies, if any, charged with the
collection of such Taxes for such jurisdiction.

“Technology” means, collectively, all technology, designs, formulae, algorithms,
procedures, methods, discoveries, processes, techniques, ideas, know-how,
research and development, technical data, tools, materials, specifications,
processes, inventions (whether patentable or unpatentable and whether or not
reduced to practice) apparatus, creations, improvements, works of authorship in
any media, confidential, proprietary or non-public information, and other
similar materials, and all recordings, graphs, drawings, reports, analyses and
other

 

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writings, and other tangible embodiments of the foregoing in any form whether or
not listed herein, and all related technology, other than Software.

“Trade Secrets” means confidential and proprietary information, including rights
relating to know-how or trade secrets, including ideas, concepts, methods,
techniques, inventions (whether patentable or unpatentable), and other works,
whether or not developed or reduced to practice, rights in industrial property,
customer, vendor, and prospect lists, and all associated information or
databases, and other confidential or proprietary information, in each case other
than Software.

“Trademark License Agreement” means the Transitional Trademark License Agreement
in the form attached hereto as Exhibit M.

“Transaction Agreements” means this Agreement, the MultiOmyx License Agreement,
the Transition Services Agreement, the Trademark License Agreement, the Investor
Rights Agreement, the Registration Rights Agreement and the Certificate of
Designation, in each case including all exhibits and schedules thereto and all
amendments thereto made in accordance with the respective terms thereof.

“Transaction Approval” means the affirmative vote of a majority of the votes
cast at the Parent Stockholder Meeting with respect to the transactions
contemplated by this Agreement.

“Transaction Deductions” means all Tax deductions resulting from fees on or
expenses incurred by Seller, Company or Company Subsidiary as a result of or in
connection with the transactions contemplated by this Agreement (including
deductions related to the repayment of indebtedness, the payment of closing
bonuses to management, and the payment of any fees or other costs and expenses
associated with the transactions contemplated hereby not required to be
capitalized), provided that any such fees and expenses incurred by Company or
Company Subsidiary were incurred on or prior to the Closing or reflected as a
liability in the calculation of final Net Working Capital.

“Transactions” means the transactions contemplated by this Agreement and the
other Transaction Agreements.

“Transfer Taxes” means any sales Tax, use Tax, direct or indirect real property
transfer or gains Tax, documentary stamp Tax, business and occupation Tax, value
added Tax or similar Taxes and all related fees.

“Treasury Regulations” means the income tax regulations promulgated by the
United States Department of Treasury pursuant to the Code.

“Triggering Event” shall be deemed to have occurred if: (i) the Parent Board
shall have effected an Adverse Recommendation Change (or any action by any
committee of the Parent Board, which if taken by the full Parent Board, would be
an Adverse Recommendation Change); (ii) the Parent shall have failed to include
in the Proxy Statement the Parent Board Recommendation; (iii) the Parent Board
(or any committee thereof) shall have approved, endorsed or recommended any
Parent Acquisition Proposal or Parent or any Subsidiary of Parent shall
otherwise have entered into any letter of intent, agreement in principle or any
other Contract relating to any Parent Acquisition Proposal or agreed to any
non-binding terms with respect to any Parent Acquisition Proposal; (iv) Parent
shall fail to confirm that the Parent Board has rejected without qualification
any Parent Acquisition Proposal which Parent was required to have notified
Seller of pursuant to Section 6.12(f) within five (5) Business Days after Seller
requests such confirmation (or shall fail to reconfirm such un qualified
rejection within two Business Days if requested by Seller provide such
reconfirmation); (v) a tender or exchange offer relating to securities of Parent
shall have been commenced and Parent shall not have sent to its securityholders,
within three Business Days after the commencement of such tender or exchange
offer, a statement disclosing that Parent recommends rejection of such tender or
exchange offer; it being understood that taking no position or indicating its
inability to take a position does not constitute recommending a rejection of
such tender or exchange offer;

 

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(vi) the Parent Board shall have failed to reaffirm, without qualification, its
recommendation of the Proposals or shall have failed to state publicly, without
qualification, that the Transactions are in the best interests of Parent’s
stockholders, within five Business Days after Seller requests in writing that
such action be taken; (vii) a Parent Acquisition Proposal is publicly announced,
and Parent fails to issue a press release indicating without qualification its
rejection of such Parent Acquisition Proposal within five Business Days after
Seller requests in writing that such action be taken; (viii) a Parent
Acquisition Proposal is publicly announced, and Parent fails to issue a press
release reaffirming the Parent Board Recommendation within three Business Days
after such Parent Acquisition Proposal is announced; (ix) any of Parent, its
Affiliates or any of their respective Representatives shall have breached any
provision of Section 6.12; or (x) Parent or Parent Board (or any committee
thereof) publicly proposes to do any of the foregoing.

“U.S.” means the United States of America.

 

Action

  Exhibit A

Adverse Recommendation Change

  Section 6.12(g)

Affiliate

  Exhibit A

Agreed Tax Treatment

  Section 9.05

Agreement

  Exhibit A

Agreement Date

  Preamble

Antitrust Laws

  Exhibit A

Assets

  Exhibit A

Audited Financial Statements

  Section 4.06 Section 4.06

Available Insurance Policies

  Section 7.04(b)

Balance Sheet

  Section 4.06

Bankruptcy and Equity Exception

  Exhibit A

Base Cash Purchase Price

  Section 3.01

Basket Amount

  Section 12.04(a)(iii)

Business

  Preliminary Statements

Business Day

  Exhibit A

Business Employees

  Section 4.16(a)

Business Permits

  Section 4.10(a)

Business Plans

  Exhibit A

Buyer

  Preamble

Buyer Employee Plans

  Exhibit A

Buyer Indemnified Parties

  Section 12.02

Buyer Lab Testing Services

  Exhibit A

Buyer Material Adverse Effect

  Exhibit A

Buyer Payor Programs

  Section 5.08(f)

Buyer Transaction Agreements

  Exhibit A

Buyer Transactions

  Exhibit A

Cap Amount

  Section 12.04(a)(v)

Cash

  Exhibit A

Cash Purchase Price Increase Amount

  Section 3.01

Certificate of Designation

  Section 10.01(g)

Closing

  Section 2.01

Closing Cash Payment

  Section 3.02

Closing Conditions

  Exhibit A

Closing Date

  Section 2.01

Closing Statement

  Section 3.04

CMS

  Section 4.11(c)

COBRA

  Section 4.16(f)(v)

Code

  Exhibit A

 

93

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Commitment Letters

  Section 5.11(a)

Company

  Preliminary Statements

Company Acquisition Proposal

  Exhibit A

Company In-Licenses

  Section 4.13(e)(iii)

Company Intellectual Property

  Exhibit A

Company Material Adverse Effect

  Exhibit A

Company Registered IP

  Exhibit A

Company Subsidiary

  Preliminary Statements

Company Subsidiary Common Stock

  Section 4.02(c)

Company Technology

  Exhibit A

Confidentiality Agreement

  Exhibit A

Consent

  Exhibit A

Control

  Exhibit A

Controlling Party

  Section 12.05

Conversion Shares

  Exhibit A

CPS

  Exhibit A

Deal Communications

  Section 13.20(d)

Debt

  Exhibit A

Deductible Amount

  Section 12.04(a)(i)

Disclosure Schedules

  Exhibit A

Dispute Notice

  Section 3.05(c)

Effective Time

  Exhibit A

Employee Plans

  Exhibit A

Environmental Claims

  Section 4.14(b)

Environmental Law

  Exhibit A

Environmental Permit

  Exhibit A

Equity Interest

  Exhibit A

ERISA

  Exhibit A

ERISA Affiliate

  Section 4.16(f)(i)

Estimated Cash

  Section 3.04

Estimated Indebtedness

  Section 3.04

Estimated Working Capital

  Exhibit A

Estimated Working Capital Decrease

  Exhibit A

Estimated Working Capital Increase

  Exhibit A

Estimated Working Capital Statement

  Exhibit A

Exchange Act

  Exhibit A

FCPA

  Section 4.12

Federal Health Care Program

  Exhibit A

Final Cash

  Exhibit A

Final Indebtedness

  Exhibit A

Final Working Capital

  Exhibit A

Final Working Capital Decrease

  Exhibit A

Final Working Capital Increase

  Exhibit A

Final Working Capital Statement

  Exhibit A

Financial Statements

  Section 4.06

Financing

  Section 5.11(a)

Financing Discussions

  Exhibit A

FY 2015 Financial Statements

  Section 6.19

GAAP

  Exhibit A

Government Approvals

  Section 6.04(a)

Government Authority

  Exhibit A

Grant Thornton

  Section 3.05(c)

 

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Hazardous Materials

  Exhibit A

Health Care Investigations

  Section 4.11(c)

Healthcare Fundamental Buyer Representations

  Section 12.01

Healthcare Fundamental Seller Representations

  Section 12.01

Healthcare Law

  Exhibit A

HIPAA

  Section 4.11(e)

HIPAA Regulations

  Section 4.11(e)

HSR Act

  Exhibit A

ICE

  Section 4.16(g)(ii)

Improper Payment Laws

  Section 4.12

Indebtedness

  Exhibit A

Indemnified Party

  Section 12.05

Indemnifying Party

  Section 12.05

Independent Accounting Firm

  Section 3.05(c)

Intellectual Property

  Exhibit A

Interest Rate

  Exhibit A

Interim September Financial Statements

  Section 6.19

Investor Board Rights, Lock-up & Standstill Agreement

  Section 6.09(d)

IRS

  Exhibit A

Knowledge of Parent

  Exhibit A

Knowledge of Seller

  Exhibit A

Law

  Exhibit A

Leased Real Property

  Exhibit A

Lenders

  Section 5.11(a)

Liabilities

  Exhibit A

Lien

  Exhibit A

Lockup Agreement

  Preliminary Statements

Losses

  Exhibit A

Material Contracts

  Section 4.15(a)

Material Customers

  Exhibit A

Material Suppliers

  Exhibit A

Medicare

  Exhibit A

Money Laundering Laws

  Section 4.12(c)

MultiOmyx License Agreement

  Section 6.09(b)

NASDAQ Rules

  Exhibit A

Net Working Capital

  Exhibit A

Net Working Capital Statements

  Exhibit A

Non-Healthcare Fundamental Buyer Representations

  Section 12.01

Non-Healthcare Fundamental Seller Representations

  Section 12.01

Notice of Superior Proposal

  Section 6.12(h)

Notice Period

  Section 6.12(h)

NRS

  Section 5.28

OIG

  Section 4.11(c)

Order

  Exhibit A

Original Date

  Section 6.05(b)

Other Person Authorizations

  Section 5.07(e), Section 4.10(e)

Outside Date

  Section 11.01(d)

Owned Real Property

  Exhibit A

Parent

  Preamble

Parent Acquisition Proposal

  Exhibit A

Parent Board

  Exhibit A

 

95

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Parent Board Recommendation

  Section 5.27

Parent Common Stock

  Section 3.01

Parent Guaranty

  Section 6.16

Parent Intellectual Property

  Exhibit A

Parent Permits

  Section 5.07(a)

Parent Preferred Stock

  Section 3.01

Parent Registered IP

  Exhibit A

Parent SEC Documents

  Section 5.16(a)

Parent Stock Options

  Exhibit A

Parent Stock Plans

  Exhibit A

Parent Stockholder Approval

  (d)

Parent Stockholder Meeting

  Section 6.05(a)

Parent Technology

  Exhibit A

Parent Transaction Agreements

  Exhibit A

Parent Transactions

  Exhibit A

Parties

  Preamble

Party

  Preamble

Paul Hastings

  Section 13.20(a)

Permits

  Exhibit A

Permitted Financing

  Exhibit A

Permitted Liens

  Exhibit A

Permitted Removal

  Section 13.20(g)

Person

  Exhibit A

Post-Closing Adjustment

  Exhibit A

Pre-Closing Period

  Exhibit A

Privacy Laws

  Section 4.11(e)

Privileged Deal Communications

  Section 13.20(d)

Prohibited Fund

  Section 4.12

Prohibited Payment Investigations

  Section 4.12

Prohibited Payments

  Section 4.12

Prohibited Person

  Exhibit A

Projections

  Section 12.08

Proposals

  Exhibit A

Proposed Cash

  Section 3.05(a)

Proposed Indebtedness

  Section 3.05(a)

Proposed Statement

  Section 3.05(a)

Proposed Working Capital

  Exhibit A

Proposed Working Capital Statement

  Exhibit A

Proxy Statement

  Section 6.06(a)

Purchase Price

  Section 3.01

PwC

  Section 3.05(c)

Real Properties

  Exhibit A

Registration Rights Agreement

  Section 6.09(e)

Representative

  Exhibit A

Required Approvals

  Exhibit A

Required Notices

  Exhibit A, Exhibit A

Required Third Party Consents

  Section 6.04(f)

Residual Communication

  Section 13.20(g)

Resolution Period

  Section 3.05(c)

Review Period

  Section 3.05(b)

Sample Net Working Capital Statement

  Exhibit A

Sanctions

  Section 4.12(d)

 

96

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Sanctions Laws

  Exhibit A

Sarbanes-Oxley Act

  Exhibit A

SEC

  Exhibit A

Securities Act

  Exhibit A

Seller

  Preamble

Seller Account

  Exhibit A

Seller Banker

  Section 4.21

Seller Indemnified Parties

  Section 12.03

Seller Lab Testing Services

  Exhibit A

Seller Names and Seller Marks

  Exhibit A

Seller Payor Programs

  Section 4.11(f)

Seller Transaction Agreements

  Exhibit A

Seller Transactions

  Exhibit A

Services

  Section 4.24

Shared Contract

  Exhibit A

Shares

  Preliminary Statements

Social Security Act

  Exhibit A

Software

  Exhibit A

SSA

  Exhibit A

Stock Consideration

  Section 3.01

Stock Issuance

  Section 3.01

Straddle Period

  Section 9.03(a)

Subsidiary

  Exhibit A

Superior Proposal

  Exhibit A

Takeover Laws

  Section 6.15

Takeover Statute

  Section 5.28

Tangible Company Properties

  Section 4.20

Target Working Capital

  Exhibit A

Tax Returns

  Exhibit A

Taxing Authority

  Exhibit A

Technology

  Exhibit A

Third Party Acquisition

  Section 6.01(b)(v)

Third Party Claim

  Section 12.05

Trade Secrets

  Exhibit A

Trademark License Agreement

  Exhibit A

Transaction Agreements

  Exhibit A

Transaction Dispute

  Section 13.12

Transactions

  Exhibit A

Transfer Taxes

  Exhibit A

Transition Services Agreement

  Section 6.09(c)

Triggering Event

  Exhibit A

U.S.

  Exhibit A

Unaudited Interim Financial Statements

  Section 4.06 Section 4.06

Voting Agreements

  Preliminary Statements

 

97

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Exhibit B

VOTING AGREEMENT

This Voting Agreement (“Agreement”) is made and entered into as of
                    , 2015, by and between GE Medical Holding AB, a private
limited company (privat aktiebolag) organized under the laws of the Kingdom of
Sweden (“Seller”), and              (“Stockholder”), a stockholder of
NeoGenomics, Inc., a Nevada corporation (“Parent”). Certain capitalized terms
used in this Agreement that are not defined herein or in Section 7 shall have
the meaning given to such terms in the Stock Purchase Agreement (as defined
below).

RECITALS

WHEREAS, Stockholder is the holder of record and the “beneficial owner” (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of the
number of shares of Parent Common Stock listed next to his, her or its name on
Schedule A;

WHEREAS, concurrently with the execution and delivery of this Agreement, Seller,
Parent and NeoGenomics Laboratories, Inc., a Florida corporation and subsidiary
of Parent (“Buyer”), are entering into a Stock Purchase Agreement (the “Stock
Purchase Agreement”) which provides, upon the terms and subject to the
conditions set forth therein, for the sale to Buyer of Seller’s right, title and
interest in and to the issued and outstanding shares of common stock of
Clarient, Inc. (the “Stock Purchase”);

WHEREAS, in connection with the Stock Purchase, Parent shall issue
(i) 14,666,667 shares of Parent Preferred Stock and (ii) 15,000,000 shares of
Parent Common Stock, to Seller (collectively, the “Stock Issuance”); and

WHEREAS, as a condition and inducement to Seller’s willingness to enter into the
Stock Purchase Agreement, Stockholder has agreed to execute and deliver this
Agreement.

NOW, THEREFORE, the parties to this Agreement, intending to be legally bound,
agree as follows:

1. Agreement to Vote Subject Securities.

(a) Voting of Subject Securities. Prior to the Termination Date, at every
meeting of the stockholders of Parent called with respect to any of the
following, and at every adjournment or postponement thereof, and on every action
or approval by written consent of the stockholders of Parent with respect to any
of the following, Stockholder shall be present (in person or by proxy) and shall
vote the Subject Securities as follows: (a) in favor of the Proposals and any
other matter required to be approved by Parent’s stockholders in order to effect
the transactions contemplated by the Stock Purchase Agreement and the
consummation thereof; and (b) against the approval or adoption of: (i) any
proposal which is in opposition to the Proposals or any of the transactions
contemplated by the Stock Purchase Agreement or which would reasonably be
expected to interfere with or delay the consummation of any of the transactions
contemplated by the Stock Purchase Agreement, (ii) any liquidation, dissolution,
recapitalization, extraordinary dividend or other significant corporate
reorganization of the Company or any of its Subsidiaries other than a reverse
stock split, (iii) any Acquisition Proposal or any agreement or arrangement
constituting or related to any Acquisition Proposal, and (iv) any other action
or agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of Parent or Buyer under the Stock
Purchase Agreement or which could result in any of the conditions to the
consummation of the Stock Purchase under the Stock Purchase Agreement not being
fulfilled.

(b) Beneficial Owner. If Stockholder is the beneficial owner, but not the record
holder, of the Subject Securities, Stockholder agrees to take all actions
necessary to cause the record holder and any nominees to vote all of the Subject
Securities as provided for in Section 1(a). Stockholder shall cause of all of
the Subject Securities to be counted as present at any meeting of the
stockholders of Parent called pursuant to Section 1(a).

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

2. Irrevocable Proxy.

(a) Grant of Proxy. In furtherance of Stockholder’s covenants and agreements set
forth herein, Stockholder hereby irrevocably grants to, and appoints, until the
termination of this Agreement, Seller and any person or persons designated in
writing by Seller, and each of them individually, as Stockholder’s proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of Stockholder, to vote all of the Subject Securities, or grant a
written consent in respect of the Subject Securities, or execute and deliver a
proxy to vote or grant a written consent in respect of the Subject Securities,
on the matters and in the manner specified in Section 1(a) of this Agreement
(including motions to adjourn and other matters incident to the conduct of any
meeting of stockholders that are in furtherance of the actions specified in
Section 1(a)). Stockholder represents and warrants to Seller that any proxies
heretofore given by it in respect of the Subject Securities are not irrevocable,
and that any such proxies are hereby revoked, and Stockholder agrees to provide
a written notice of revocation of such proxies to the relevant proxy holders (if
any).

(b) Irrevocable Proxy. Stockholder hereby affirms that the irrevocable proxy
given pursuant to Section 2(a) is given in connection with, and in consideration
of, the execution of the Stock Purchase Agreement by Seller, and that such
irrevocable proxy is given to secure the performance of the duties of
Stockholder under this Agreement. Stockholder further affirms that such proxy is
coupled with an interest and may under no circumstances be revoked. Stockholder
hereby ratifies and confirms all that such irrevocable proxy may lawfully do or
cause to be done in compliance with the provisions of Section 2(a) by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Subsection 5 of NRS 78.355 of the Nevada
Revised Statutes until the Termination Date.

3. Agreement to Retain Shares.

(a) Restriction on Transfer. Except as otherwise provided in Section 3(c),
during the period from the date of this Agreement through the Termination Date,
Stockholder shall not, directly or indirectly, cause or permit any Transfer (by
merger, consolidation or otherwise by operation of law) of any of the Subject
Securities.

(b) Restriction on Transfer of Voting Rights. During the period from the date of
this Agreement through the Termination Date, Stockholder will: (i) ensure that
none of the Subject Securities is deposited into a voting trust; (ii) not enter
into any other voting agreement, voting trust or other arrangement with respect
to the Subject Securities; and (iii) not grant any power of attorney or give any
proxy (other than the Proxy granted herein).

(c) Permitted Transfers. Section 3(a) shall not prohibit a transfer of Parent
Common Stock by Stockholder (i) upon the death of Stockholder, or (ii) if
Stockholder is a partnership or limited liability company, to one or more
partners or members of Stockholder or to an affiliated corporation under common
control with Stockholder, or (iii) solely as permitted on Schedule B hereto];
provided, however, that a transfer referred to in clauses (i) or (ii) of this
sentence shall be permitted only if, as a precondition to such transfer, the
transferee agrees in a writing, reasonably satisfactory in form and substance to
Seller, to be bound by the terms of this Agreement.

4. Representations, Warranties and Covenants of Stockholder. Stockholder hereby
represents and warrants to Seller as follows:

(a) Due Authorization, Etc. All consents, approvals, authorizations and orders
necessary for the execution and delivery by Stockholder of this Agreement and
the Proxy have been obtained, and Stockholder has full right, power and
authority to enter into this Agreement and the Proxy. This Agreement and the
Proxy have been duly executed and delivered by Stockholder and constitute valid
and binding agreements of Stockholder enforceable in accordance with their
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors’ rights generally and subject to general principles of equity.

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

(b) No Conflict. The execution and delivery of this Agreement and the Proxy by
Stockholder do not, and the performance of this Agreement and the Proxy by
Stockholder will not (i) conflict with or violate any law, rule, regulation,
order, decree or judgment applicable to Stockholder or by which Stockholder or
any of his, her or its properties is or may be bound or affected; or (ii) result
in or constitute any breach of or default under, or give to any other Person any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of any encumbrance or restriction on any of the Subject Securities
pursuant to, any contract to which Stockholder is a party or by which
Stockholder or any of his, her or its Affiliates or properties is or may be
bound or affected. There is no beneficiary or holder of a voting trust
certificate or other interest of any trust of which Stockholder is settlor or
trustee or any other person or entity, including any Governmental Authority,
whose consent, approval, order or authorization is required by or with respect
to Stockholder for the execution, delivery and performance of this Agreement by
Stockholder or the consummation by Stockholder of the transactions contemplated
hereby.

(c) Title to Securities. As of the date of this Agreement: (a) Stockholder holds
of record (in certificate form) the number of outstanding shares of Parent
Common Stock set forth under the heading “Shares Held of Record in Certificate
Form” on Schedule A hereto; (b) Stockholder Owns the additional securities of
Parent set forth under the heading “Shares Held in Street Name” on Schedule A
hereto; and (c) Stockholder holds the options, warrants and other rights to
acquire shares of Parent Common Stock set forth under the heading “Options and
Other Rights” on Schedule A hereto.

(d) Reliance. Stockholder has had the opportunity to review the Stock Purchase
Agreement and this Agreement with counsel of Stockholder’s own choosing.
Stockholder understands and acknowledges that Seller is entering into the Stock
Purchase Agreement in reliance upon Stockholder’s execution, delivery and
performance of this Agreement.

(e) Absence of Litigation. As of the date hereof, there is no action, suit or
proceeding pending against, or, to the knowledge of Stockholder, threatened
against, Stockholder or any of Stockholder’s properties or assets (including the
Subject Securities) that could reasonably be expected to prevent, delay or
impair the ability of Stockholder to perform its obligations hereunder or to
consummate the transactions contemplated hereby.

(f) Accuracy of Representations. The representations and warranties of
Stockholder contained in this Agreement are accurate in all respects as of the
date of this Agreement, and will, subject to Permitted Transfers, be accurate in
all respects at all times through and including the Termination Date.

5. Additional Agreements and Covenants.

(a) Further Assurances. From time to time and without additional consideration,
Stockholder shall execute and deliver, or cause to be executed and delivered,
such additional transfers, assignments, endorsements, proxies, consents and
other instruments, and shall take such further actions, as Seller may request
for the purpose of carrying out and furthering the intent of this Agreement.
Furthermore, Stockholder will not take or permit to be taken any other action
that would in any way restrict, limit or interfere with the performance of the
obligations and covenants of Stockholder contained in this Agreement.

(b) Confidentiality. Stockholder recognizes that successful consummation of the
transactions contemplated by the Stock Purchase Agreement may be dependent upon
confidentiality with respect to the matters referred to herein. In this
connection, pending public disclosure thereof, Stockholder hereby agrees not to
disclose or discuss such matters with anyone not a party to this Agreement
(other than its spouse, counsel and advisors, if any) without the prior written
consent of Seller, except for disclosures Stockholder’s counsel advises are
necessary in order to comply with applicable Law, in which event Stockholder
shall give notice of such disclosure to Seller as promptly as practicable so as
to enable Seller to seek a protective order from a court of competent
jurisdiction with respect thereto.

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

(c) No Solicitation. Stockholder shall not, and shall direct and use
commercially reasonable efforts to cause its Affiliates and representatives not
to, directly or indirectly, initiate, solicit or knowingly encourage (including
by way of furnishing information) any Acquisition Proposal or assist any third
party in preparing or soliciting an offer relating in any way to an Acquisition
Proposal.

(d) Documentation and Information. Stockholder (i) consents to and authorizes
the publication and disclosure by Seller and Parent of Stockholder’s identity
and holding of Subject Securities, and the nature of Stockholder’s commitments,
arrangements and understandings under this Agreement, in any press release or
disclosure document required in connection with the Stock Purchase Agreement and
any transactions contemplated by the Stock Purchase Agreement, and (ii) agrees
to give to Seller and Parent as promptly as practicable any information related
to the foregoing that Seller and Parent may reasonably require for the
preparation of any such disclosure documents. Stockholder agrees to notify
Seller and Parent as promptly as practicable of any required corrections with
respect to any written information supplied by Stockholder specifically for use
in any such disclosure documents, if and to the extent Stockholder becomes aware
that any such information shall have become false or misleading in any material
respect.

(e) Action in Stockholder Capacity. Stockholder makes no agreement or
understanding herein as a director or officer of Parent. Stockholder is signing
this Agreement in his or her capacity as an Owner of Subject Securities and
nothing in this Agreement limits or affects any actions taken by Stockholder as
an officer or director of Parent.

6. Miscellaneous.

(a) Survival of Representations, Warranties and Agreements. All representations
and warranties made by Stockholder in this Agreement shall survive until the
earlier to occur of (i) the consummation of the Stock Issuance, and (ii) the
Termination Date.

(b) Assignment; Binding Effect. Except as provided herein, Stockholder shall not
assign (whether by operation of Law or otherwise) this Agreement or any rights,
interests or obligations provided by this Agreement, and any attempted
assignment in violation of this Section 6(b) shall be void ab initio. Subject to
the preceding sentence, this Agreement shall be binding on Stockholder and his,
her or its heirs, estate, executors and personal representatives and his, her or
its successors and assigns, and shall inure to the benefit of Seller and its
successors and assigns. Without limiting any of the restrictions set forth in
Section 3(a) or elsewhere in this Agreement, this Agreement shall be binding
upon any Person to whom any Subject Securities are transferred. This Agreement
is for the sole benefit of the parties and their respective successors, and
nothing in this Agreement shall create or be deemed to create any third-party
beneficiary rights in any Person not a party to this Agreement, including any
Affiliates of any party.

(c) Remedies; Specific Performance.

(i) Except to the extent set forth otherwise in this Agreement, all remedies
under this Agreement expressly conferred upon a party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby, or by Law or equity
upon such party, and the exercise by a party of any one remedy will not preclude
the exercise of any other remedy.

(ii) The parties agree that irreparable damage would occur and the parties would
not have an adequate remedy at Law if any of the provisions of this Agreement or
the Proxy were not performed in accordance with its specific terms or were
otherwise breached. Accordingly, Stockholder agrees that the Seller will be
entitled to injunctive relief from time to time to prevent breaches of the
provisions of this Agreement or the Proxy and to enforce specifically the terms
and provisions of this Agreement and the Proxy without the requirement of
posting any bond or other indemnity, in addition to any other remedy to which it
may be entitled, at Law or in equity, and Stockholder agrees not to raise any
objections to the availability of the equitable remedy

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of specific performance to prevent or restrain breaches of this Agreement or the
Proxy, and to specifically enforce the terms of this Agreement and the Proxy to
prevent breaches or threatened breaches of, or to enforce compliance with, the
covenants and obligations of Stockholder under this Agreement and the Proxy.

(d) Waiver. No failure on the part of Seller to exercise, and no delay in
exercising, any right, power or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by Seller preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. Seller shall not be deemed to have
waived any claim available to Seller arising out of this Agreement, or any
power, right, privilege or remedy of Seller under this Agreement, unless the
waiver of such claim, power, right, privilege or remedy is expressly set forth
in a written instrument duly executed and delivered on behalf of Seller; and any
such waiver shall not be applicable or have any effect except in the specific
instance in which it is given.

(e) Governing Law; Venue. This Agreement, the Proxy and any Action arising out
of or relating in any way to this Agreement or the Proxy, whether in contract,
tort, common law, statutory law, equity, or otherwise, including any question
regarding its existence, validity, or scope (each, a “Transaction Dispute),
shall be governed by, construed and enforced in accordance with the Laws of the
State of Nevada without giving effect to any choice of law rules that would
cause the application of laws of any jurisdiction other than those of the State
of Nevada. Any Transaction Dispute will exclusively be brought and resolved in
any state or federal court located in the State of Nevada, and the appellate
courts having jurisdiction of appeals in such courts. In that context, and
without limiting the generality of the foregoing, Stockholder irrevocably and
unconditionally:

(i) submits for itself and its property to the exclusive jurisdiction of such
courts with respect to any Transaction Dispute and for recognition and
enforcement of any judgment in respect thereof, and agrees that all claims in
respect of any Transaction Dispute shall be heard and determined in such courts;

(ii) agrees that venue would be proper in such courts, and waives any objection
that it may now or hereafter have that any such court is an improper or
inconvenient forum for the resolution of any Transaction Dispute; and

(iii) agrees that the mailing by certified or registered mail, return receipt
requested, as specified in Section 6(k), of any process required by any such
court, will be effective service of process; provided, however, that nothing
herein will be deemed to prevent a party from making service of process by any
means authorized by the Laws of the State of Nevada.

Nothing contained in this Section 6(f) shall be deemed to limit or otherwise
affect the right of Seller to commence any Action or otherwise proceed against
Stockholder in any other forum or jurisdiction. The foregoing consent to
jurisdiction will not constitute submission to jurisdiction or general consent
to service of process in the State of Nevada for any purpose except with respect
to any Transaction Dispute.

TO THE MAXIMUM EXTENT PERMITTED BY LAW, STOCKHOLDER IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY
TRANSACTION DISPUTE AND COVENANTS THAT NEITHER IT NOR ANY OF ITS AFFILIATES OR
REPRESENTATIVES WILL ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY
RIGHT TO SUCH TRIAL BY JURY. STOCKHOLDER CERTIFIES AND ACKNOWLEDGES THAT
(A) STOCKHOLDER HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (B) STOCKHOLDER
MAKES THIS WAIVER VOLUNTARILY AND (C) SUCH WAIVER CONSTITUTES A MATERIAL
INDUCEMENT UPON WHICH SELLER IS RELYING AND WILL RELY IN ENTERING INTO THE
TRANSACTION AGREEMENTS. SELLER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION 6(F) WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
STOCKHOLDER TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.

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(f) Adjustments Upon Changes in Capitalization. In the event of any change in
the number of issued and outstanding shares of Parent Common Stock by reason of
any stock split, reverse split, stock dividend (including any dividend or
distribution of securities convertible into Parent Common Stock), combination,
reorganization, recapitalization or other like change, conversion or exchange of
shares, or any other change in the corporate or capital structure of Parent, the
term “Subject Securities” shall be deemed to refer to and include the Subject
Securities as well as all such stock dividends and distributions and any shares
into which or for which any or all of the Subject Securities may be changed or
exchanged.

(g) Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Facsimiles, e-mail transmission of .pdf signatures or other
electronic copies of signatures shall be deemed to be originals.

(h) Entire Agreement. This Agreement, the Proxy and any other documents
delivered by the parties in connection herewith constitute and contain the
entire agreement and understanding between the parties with respect to the
subject matter hereof and thereof and supersede all prior negotiations,
correspondence, understandings and contracts between the parties respecting the
subject matter hereof and thereof. This Agreement (including the schedule
hereto) may be amended, restated supplemented or otherwise modified, and any
provision hereof may be waived, only by written agreement making specific
reference to this Agreement or provision to be waived, in each case duly
executed by both parties.

(i) 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.

(j) Notices. All notices and other communications under or by reason of this
Agreement shall be in writing and shall be deemed to have been duly given or
made (a) when personally delivered, (b) when delivered by facsimile or e-mail
transmission with receipt confirmed (followed by delivery of an original by
another delivery method provided for in this Section 6(k)); or (c) one
(1) Business Day after deposit with overnight courier service or, in each case
to the addresses set forth below (or such other address, facsimile number,
e-mail address as the recipient party has specified by prior notice given to the
sending party in accordance with this Section 6(k)).

(k) Severability. If any term or provision of this Agreement is held invalid,
illegal or unenforceable in any respect under any applicable Law or as a matter
of public policy, the validity, legality and enforceability of all other terms
and provisions of this Agreement will not in any way be affected or impaired. If
the final judgment of a court of competent jurisdiction or other Government
Authority declares that any term or provision hereof is invalid, illegal or
unenforceable, the parties agree that the court making such determination will
have the power to reduce the scope, duration, area or applicability of the term
or provision, to delete specific words or phrases, or to replace any invalid,
illegal or unenforceable term or provision with a term or provision that is
valid, legal and enforceable and that comes closest to expressing the intention
of the invalid, illegal or unenforceable term or provision.

(l) Construction.

(i) For purposes of this Agreement, whenever the context requires: the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine gender shall include the
masculine and neuter genders; and the neuter gender shall include masculine and
feminine genders.

(ii) The parties agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Agreement.

(iii) As used in this Agreement, the words “include” and “including,” and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words “without limitation.”

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(iv) Except as otherwise indicated, all references in this Agreement to
“Sections” and “Exhibits” are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.

7. Certain Definitions. For purposes of this Agreement,

(a) “Parent Common Stock” shall mean the common stock, par value $0.001 per
share, of Parent.

(b) “Parent Preferred Stock” shall mean the Series A preferred stock, par value
$0.001 per share, of Parent.

(c) Stockholder shall be deemed to “Own” those securities that are held (i) of
record (in certificate form) by Stockholder or (ii) through a broker, bank or
nominee as the beneficial owner in street name, in each case, in his, her or its
individual capacity as set forth on Schedule A.

(d) “Person” shall mean any (i) individual, (ii) corporation, limited liability
company, partnership or other entity, or (iii) Governmental Authority.

(e) “Subject Securities” shall mean: (i) all securities of Parent (including all
shares of Parent Common Stock and all options, warrants and other rights to
acquire shares of Parent Common Stock) Owned by Stockholder as of the date of
this Agreement as set forth next to Stockholder’s name on Schedule A and
(ii) all additional securities of Parent (including all additional shares of
Parent Common Stock and all additional options, warrants and other rights to
acquire shares of Parent Common Stock) of which Stockholder acquires Ownership
during the period from the date of this Agreement through the Termination Date.
For the avoidance of doubt, Subject Securities do not include any securities
held by an affiliated entity unless such securities are listed on Schedule A.

(f) The term “Termination Date” means the earlier to occur of (i) the date of
the satisfaction of the Closing Condition set forth in Section 10.01(d) of the
Stock Purchase Agreement or (ii) the date the Stock Purchase Agreement
terminates in accordance with its terms.

(g) A Person shall be deemed to have a effected a “Transfer” of a security if
such Person directly or indirectly: (i) sells, pledges, encumbers, grants an
option with respect to, transfers or disposes of such security or any interest
in such security to any Person other than Seller; (ii) enters into an agreement
or commitment contemplating the possible sale of, pledge of, encumbrance of,
grant of an option with respect to, transfer of or disposition of such security
or any interest therein to any Person other than Seller; or (iii) reduces such
Person’s beneficial ownership of, interest in or risk relating to such security.

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The parties have caused this Agreement to be duly executed on the date first
above written.

 

SELLER: GE Medical Holding AB By:  

 

Name:  

 

Title:  

 

Address for notices:

 

 

 

STOCKHOLDER:

 

Name:   Address for notices:

 

 

 

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Exhibit G

INVESTOR BOARD RIGHTS, LOCKUP, AND STANDSTILL AGREEMENT

This Investor Board Rights, Lockup, and Standstill Agreement (this “Agreement”
or “Investor Rights Agreement”) is made as of this      day of December, 2015,
by and between NeoGenomics, Inc., a Nevada corporation (the “Company”), on the
one hand, and GE Medical Holding AB, a private limited company (privat
aktiebolag) organized under the laws of the Kingdom of Sweden (the “Investor”),
and General Electric Company, a New York corporation (“GE”) acting for itself
and each GE Subsidiary (as defined below), on the other hand.

WHEREAS, the Company, NeoGenomics Laboratories, Inc., a Florida corporation and
subsidiary of the Company and the Investor are parties to that certain Stock
Purchase Agreement, dated as of October 20, 2015 (the “Stock Purchase
Agreement”), pursuant to which the Investor has received from the Company as of
the date hereof, (i) 15,000,000 shares of the Company’s Common Stock (the
“Common Shares”), and (ii) 14,666,667 shares of the Company’s Preferred Stock
(the “Preferred Shares”, and together with the Common Shares, the “Shares”)
which Preferred Shares are convertible into Common Stock in accordance with
their terms (the shares of Common Stock issuable upon conversion of the
Preferred Shares, collectively, the “Conversion Shares”), as a portion of the
consideration for the sale to the Company of the Investor’s shares of capital
stock in Clarient, Inc.; and

WHEREAS, in connection with the Stock Purchase Agreement and the issuance of the
Shares to the Investor, the parties desire to enter into this Agreement in order
to establish certain rights and restrictions relating to the Shares.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and for other good and valid consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01 Definitions. The following terms shall have the following meanings:

“Action” has the meaning set forth in the Stock Purchase Agreement.

“Affiliate” has the meaning set forth in the Stock Purchase Agreement.

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

“Applicable Exchange” means the Eligible Market on which the Company’s capital
stock is listed.

“Beneficial Owner,” “Beneficial Ownership,” “Beneficially Own” or “Beneficially
Owned” shall refer to the concept of “beneficial ownership” in Rule 13d-3
promulgated under the Exchange Act.

“Board” or “Board of Directors” means the Board of Directors of the Company.

“Board Qualifications” has the meaning set forth in Section 2.03.

“Business Day” means a day, other than Saturday, Sunday or public holidays in
the United States of America.

“Closing” has the meaning set forth in the Stock Purchase Agreement.

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“Closing Date” has the meaning set forth in the Stock Purchase Agreement.

“Common Shares” has the meaning set forth in the Preamble.

“Common Stock” means the Common Stock of the Company, par value $0.001 per
share.

“Company” has the meaning set forth in the first paragraph.

“Company Breach” has the meaning set forth in Section 4.02

“Conversion Shares” has the meaning set forth in the Preamble.

“Current Market” means The Nasdaq Capital Market.

“Election Meetings” has the meaning set forth in Section 2.01.

“Eligible Market” means The NASDAQ Global Select Market, The New York Stock
Exchange, Inc., The NYSE MKT LLC, The NASDAQ Capital Market, or The Nasdaq
Global Market.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor federal statute, and the rules and regulations thereunder, all as the
same shall be in effect from time to time.

“GE” has the meaning set forth in the first paragraph.

“GE Subsidiary” means any wholly-owned Subsidiary of GE.

“Governmental Authority” has the meaning set forth in the Stock Purchase
Agreement.

“Holders” means each of Investor, GE and each GE Subsidiary to the extent any
such entity or entities Beneficially Own Shares or Conversion Shares.

“Holder Breach” has the meaning set forth in Section 2.06(b).

“Initial Investor Designee” has the meaning set forth in Section 2.09.

“Investor” has the meaning set forth in the first paragraph.

“Investor Designee” has the meaning set forth in Section 2.01.

“Investor Designee Termination Event” has the meaning set forth in Section 2.06.

“Law” has the meaning set forth in the Stock Purchase Agreement.

“Liability” has the meaning set forth in the Stock Purchase Agreement.

“Lockup Period” means, with respect to the Common Shares and Conversion Shares
Beneficially Owned by Holders, the period commencing on the date of this
Agreement and ending on the day that is the earlier of (i) two (2) years from
the date of this Agreement or (ii) the date which is six (6) months after all of
the Preferred Shares have been redeemed by the Company, subject to earlier
termination as provided for in this Agreement.

“NGC” has the meaning set forth in Section 2.03.

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“Permitted Acquisition” has the meaning set forth in Section 3.01(a).

“Permitted Disposition” has the meaning set forth in Section 3.02(b).

“Permitted Transfer” has the meaning set forth in Section 3.02(c).

“Permitted Transferee” means the recipient of a Permitted Transfer.

“Person” means any individual, sole proprietorship, partnership, limited
liability company, corporation, association, joint stock company, trust, joint
venture, unincorporated organization, any other business organization or entity,
or Governmental Authority.

“Preferred Shares” has the meaning set forth in the Preamble.

“Preferred Stock” means the Series A Preferred Stock of the Company, par value
$0.001 per share.

“Purchase Rights” has the meaning set forth in Section 4.03.

“Registration Rights Agreement” means that certain Registration Rights
Agreement, of even date herewith, by and between the Company and the Investor.

“Rule 144” means Rule 144 promulgated under the Securities Act.

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

“Securities Act” means the Securities Act of 1933, as amended, and any successor
federal statute, and the rules and regulations thereunder, all as the same shall
be in effect from time to time.

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

“Standstill Period” means the period commencing on the date hereof and
continuing until the 48-month anniversary of the date hereof, subject to earlier
termination as provided for in this Agreement.

“Stock Purchase Agreement” has the meaning set forth in the Recitals.

“Subsidiary” has the meaning set forth in the Stock Purchase Agreement.

“Third Party” shall mean any Person other than Investor, GE or a GE Subsidiary.

“Transfer” means (i) sell, assign, give, pledge, encumber, hypothecate,
mortgage, exchange or otherwise dispose, (ii) grant to any Person any option,
right or warrant to purchase or otherwise receive, or (iii) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic
consequences or other rights of ownership

“Voting Stock” means the shares of Common Stock and the other securities of the
Company or its successor that have the power to generally vote in the election
of members of the Board or the equivalent of its successor.

“Volume Limitation” means the volume limitations set forth in clause (e) of Rule
144 applicable during any three month period.

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ARTICLE 2

BOARD REPRESENTATION

Section 2.01 Investor Designee Appointment and Nomination Right. So long as the
Holders continue to Beneficially Own in the aggregate at least ten percent
(10%) of the Company’s then outstanding Voting Stock on any record date for a
meeting of Company’s shareholders, Investor shall have the right, but not the
obligation, to designate one nominee to serve as a director of the Company (the
“Investor Designee”). The Company shall (a) appoint such Investor Designee to
its Board of Directors, (b) include the Investor Designee in its slate of
nominees for election to the Board of Directors at each annual or special
meeting of stockholders of the Company following the Closing at which directors
are to be elected and at which the seat held by the Investor Designee is subject
to election (such annual or special meetings, the “Election Meetings”), and
(c) recommend that the Company’s stockholders vote in favor of the Investor
Designee and support for election the Investor Designee in the same manner as
the Company supports the other nominees nominated by the Board of Directors for
election to the Board of Directors, and otherwise use commercially reasonable
efforts to cause the election of the Investor Designee to the Board of Directors
at each of the Election Meetings. The foregoing appointment and nomination
rights will be subject to the Investor Designee satisfying the Company’s Board
Qualifications; provided that, if a determination is made pursuant to
Section 2.03 that the Investor Designee does not meet the Board Qualifications,
(i) the Company will not nominate a replacement candidate in place of the
rejected Investor Designee (unless the Investor does not nominate a replacement
candidate pursuant to its rights in the following clause (ii)), and (ii) the
Investor shall have the right to nominate a replacement candidate in place of
the rejected Investor Designee and continue such process of nominating a
replacement candidate until such time as an Investor Designee meets the Board
Qualifications; provided, that Company shall not be required to delay any
meeting of shareholders beyond the earlier to occur of (1) forty (40) days prior
to the deadline established in the Company’s By-laws for holding any annual
meeting of shareholders or (2) the deadline established by the NASDAQ Stock
Exchanges for holding an annual meeting of shareholders.

Section 2.02 Vacancies. If at any time prior to an Investor Designee Termination
Event, an Investor Designee resigns from the Board, is removed (with or without
cause) pursuant to applicable Law or the Company’s Bylaws, fails to satisfy the
Board Qualifications, fails to be elected to the Board at an Election Meeting,
dies or otherwise cannot or is not willing to stand for reelection or to
continue to serve as a member of the Board, the Investor shall have the ability
to select a substitute person to join the Board as a new Investor Designee,
provided that such new Investor Designee meets the Board Qualifications pursuant
to Section 2.03. In the event such substitute person does not satisfy the Board
Qualifications, Investor will have the right to recommend an additional
substitute person as an Investor Designee and continue the process until such
time as a substitute person meets the Board Qualifications, provided, that the
Company shall not be required to delay any annual meeting of shareholders beyond
the times listed in Section 2.01. Provided such substitute Investor Designee
meets the Board Qualifications, the Board will appoint such substitute person as
an Investor Designee to the Board no later than ten (10) Business Days after the
recommendation of that person to the Board by Investor and include such Investor
Designee in the slate of the Company’s director nominees for election at
Election Meetings pursuant to Section 2.01 above. So long as any Investor
Designee is eligible to be so designated in accordance with this Agreement, the
Company shall (a) not take any action to remove such person as a director,
without the prior written consent of Investor, and (b) unequivocally and
actively support each Investor Designee without reservation for such Investor
Designee’s election to the Board, including in the event the Investor Designee
is the target of opposition by any stockholder of the Company, including any
“just say no” campaign or any other attempt to unseat or defeat such Investor
Designee.

Section 2.03 Board Qualifications. Each Investor Designee shall, at the time of
nomination (and at all times thereafter until such individual’s service on the
Board of Directors ceases), (a) meet any applicable requirements under
applicable Law, stock exchange rules or the Company’s corporate governance
policies generally applicable to the non-executive directors on the Board,
(b) complete the Company’s standard director questionnaire which is generally
required of non-executive directors on the Board, (c) be approved of by the
Nominating and Corporate Governance Committee of the Board (the “NGC”) and
thereafter by the Board and

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(d) comply with any minimum annual attendance requirements in effect for the
entire Board and applied uniformly to all directors; provided, that the NGC and
the Board may only fail to approve an Investor Designee if the NGC determines in
good faith: (i) that the Investor Designee fails to satisfy the applicable
requirements under applicable Law, the Applicable Exchange or such corporate
governance policies; (ii) the recommendation of the Investor Designee would
violate the fiduciary duties of the Board or the NGC; or (iii) the Investor
Designee has failed to meet the minimum attendance requirements in effect for
(and applied uniformly to) the entire Board in any preceding twelve (12) month
period (the “Board Qualifications”). Investor agrees that, upon the request of
the Company, it will consider any requests for a replacement Investor Designee
if the NGC raises concerns about the suitability of any proposed Investor
Designee. The Company shall not revise or amend the Board Qualifications or any
applicable governance guidelines or other requirements in a manner that has the
intent or effect of adversely affecting the nomination or election of an
Investor Designee (by for instance, adding requirements that all directors meet
citizenship or independence requirements that would disqualify Persons known by
the Company to be the Investor’s probable designees).

Section 2.04 Compensation, Indemnification and Insurance. Investor Designees
shall be entitled to the same retainer, equity compensation, benefits and other
fees or compensation, including travel and expense reimbursement, paid to the
other non-executive directors of the Company for their services as a director,
including for any service on any committee of the Board. For so long as an
Investor Designee continues to serve as a director and for a period of six
(6) years thereafter, the Company shall, to the fullest extent permitted by
applicable Laws, indemnify such Investor Designees and shall maintain in full
force and effect directors’ and officers’ liability insurance in reasonable
amounts from established and reputable insurers to the same or greater extent it
now indemnifies and provides insurance for the non-executive members of the
Board of Directors. Without limiting the foregoing, the Investor Designee shall
be provided indemnification which is no less favorable than provided to the
other non-executive directors of the Company. In all directors’ and officers’
insurance policies, each Investor Designee shall be covered as an insured in
such a manner as to provide the Investor Designee with rights and benefits under
such insurance policies no less favorable than provided to the other
non-executive directors of the Company. To the extent the Company has a policy
in effect of entering into director indemnification agreements with its
directors at any time, the Company shall enter into its standard director
indemnification agreement provided to other members of the Board with each
Investor Designee, effective as of the date such Investor Designee joins the
Board or such director indemnification agreements are entered into with other
directors.

Section 2.05 Committees. For so long as such membership does not conflict with
any applicable Law or rule of the Applicable Exchange, the Investor Designee
shall be entitled to serve as a member of or observer to certain committees of
the Board that are mutually agreed upon between the Investor Designee and the
Company and are based on the relative skills and experience of the Investor
Designee. Investor understands and acknowledges that it is the policy of the
Company that each non-executive Director sit on at least one committee of the
Board. The Company shall take such actions as are necessary to appoint the
Investor Designee to such committees as are mutually agreed by the Investor
Designee and the Company within ten (10) Business Days of reaching such
agreement.

Section 2.06 Termination of Investor Designee Rights. Notwithstanding the
foregoing, the Investor’s rights under this ARTICLE 2 with respect to the
Investor Designee shall terminate automatically on the earlier to occur of:
(a) the date when the Holders and their Affiliates cease to Beneficially Own in
the aggregate at least ten percent (10%) of the Company’s then outstanding
Voting Stock or (b) the Holders are in breach of any of their obligations in any
material respect set forth in this Agreement and such breach has not been cured
(or is incapable of being cured) by the Holders within ten (10) Business Days
following receipt of written notice from Company specifying the details of such
breach (such uncured breach, hereafter a “Holder Breach”). Either of the events
described in this Section 2.06(a) or (b) is referred to as an “Investor Designee
Termination Event”. Upon the occurrence of an Investor Designee Termination
Event, the term of an incumbent Investor Designee impacted by the Investor
Designee Termination Event shall continue until the earlier of (i) the Election
Meeting that immediately follows the Investor Termination Event and (ii) the
Investor Designee dies or resigns from the Board.

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Section 2.07 Subsequent Board Increases. So long as the Holders and their
Permitted Transferees continue to Beneficially Own in the aggregate at least ten
percent (10%) of the Company’s outstanding Voting Stock, the Company shall not
increase the authorized number of directors on the Board to more than ten
without the prior written consent of the Investor.

Section 2.08 Transferability. The Investor may Transfer to GE or to any GE
Subsidiary all or any portion of its rights under this ARTICLE 2 subject to the
continuing rights of Company to approve any Investor Designees.

Section 2.09 Initial Investor Designee. The Investor agrees to propose an
initial Investor Designee (the “Initial Investor Designee”) and have such
proposed Initial Investor Designee meet with members of the Company’s NGC as
part of the process to approve such Initial Investor Designee. So long as the
Initial Investor Designee meets the Board Qualifications of Section 2.03, the
Company shall use commercially reasonable efforts to appoint such Initial
Investor Designee to the Board within ten (10) Business Days of the date of this
Agreement and appoint the Initial Investor Designee to one or more mutually
agreed upon committees of the Board not later than the first Board Meeting
following the date of this Agreement.

ARTICLE 3

ADDITIONAL RESTRICTIONS

Section 3.01 Standstill.

(a) Limitation. Subject to the remainder of this Section 3.01, during the
Standstill Period and unless otherwise approved by the Company, Investor and GE
will not, and GE will cause each of the GE Subsidiaries not to, directly or
indirectly, acquire or agree, whether by purchase, tender or exchange offer, to
acquire ownership of any Common Stock of the Company, other than (A) the Shares
delivered pursuant to the Stock Purchase Agreement, (B) any Conversion Shares
issued or issuable pursuant to a conversion of any Preferred Shares and any
other Common Stock issued or issuable as a result of the terms of the Preferred
Shares, (C) any Common Stock issued or issuable as a result of any stock splits,
stock dividends, rights, warrants, or other distributions, recapitalizations or
offerings made available by the Company to holders of its Voting Stock, or
(D) any Voting Stock acquired in accordance with Section 4.03 (each event listed
in clauses (A) through (D), a “Permitted Acquisition”). In addition, nothing in
this Section 3.01or elsewhere in this Agreement shall prohibit Investor, GE or
any GE Subsidiary from acquiring any Person that Beneficially Owns any Voting
Stock or rights or options to acquire Voting Stock (including any shares
acquired pursuant to any exercise of such rights and options).

(b) Termination of Standstill. The restrictions set forth in Section 3.01(a)
shall cease and terminate and each of Investor, GE and each GE Subsidiary will
be released from (i) the obligations of Section 3.01(a) and (ii) the other
obligations under this Agreement, in the case of such other obligations to the
extent necessary to comply with any requirements of law in making a competing
offer or to purchase any Voting Stock, if any of the following occurs:

(i) a Third Party or group commences or announces its intention to commence a
tender or exchange offer for 25% or more of the outstanding Voting Stock of the
Company;

(ii) a Third Party or group acquires (in any manner) Beneficial Ownership of 25%
or more of the outstanding Voting Stock of the Company or otherwise announces
its intention to acquire (in any manner) Beneficial Ownership of 25% or more of
the outstanding Voting Stock of the Company;

(iii) a Third Party or group enters into an agreement to acquire (in any
manner), or announces its intention to acquire (in any manner) all or
substantially all of the assets of the Company;

(iv) a Third Party or group enters into an agreement to acquire (in any manner),
or announces its intention to acquire (in any manner) 25% or more of the
outstanding Voting Stock of the Company;

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(v) a Third Party or group has made, or has announced its intention to make an
offer to acquire (in any manner) control of the Company or to elect two or more
directors to the Board (including, without limitation, through a solicitation of
proxies) or otherwise engage in a transaction that would require approval of the
Company’s stockholders;

(vi) a Third Party or group is assisting or encouraging any other Person to
engage in, or to announce its intention to engage in, any of the transactions
contemplated in sub-clauses (i) through (v) above;

(vii) the Company enters into an agreement with respect to its consolidation,
merger, amalgamation, reorganization or otherwise in which the Company would be
merged into or combined with another Person, unless immediately following the
consummation of such transaction the stockholders of the Company immediately
prior to the consummation of such transaction would continue to hold (in
substantially the same proportion as their ownership of the Company’s Voting
Stock) 60% or more of all of the outstanding common stock or other securities
entitled to vote for the election of directors of the surviving or resulting
entity in such transaction or any direct or indirect parent thereof; or

(viii) the Company publicly announces its intention to do any of the actions set
forth in clauses (i) – (vii) or otherwise publicly announces its intention to
explore strategic alternatives, or makes any public announcement indicating that
it is actively seeking a change in control of the Company.

Notwithstanding the foregoing, if, and only if, (x) the restrictions set forth
in Section 3.01(a) are terminated pursuant to any of clauses (i) – (vi) of this
Section 3.01(b) as a result of a Third Party or group’s announcement of its
intention to take any action, and (y) such Third Party or group (1) publicly
retracts or withdraws its prior announcement of its intention to take such
action, or fails to commence such action within sixty (60) days of such initial
announcement, (2) in the case of clauses (iii) and (iv) above, terminates such
definitive agreement or (3) otherwise finally and definitively fails to
consummate such action, then three (3) Business Days following such public
retraction, or in the case of (2) or (3) above, following written notice from
the Company to Investor that such termination of a definitive agreement or final
and definitive failure to consummate an action has taken place, the restrictions
set forth in Section 3.01(a) shall be reinstated in full force and effect for
the balance of the Standstill Period, subject to any subsequent termination
event pursuant to this Section 3.01(b). For the avoidance of doubt, nothing
herein shall prevent Investor, GE and or any GE Subsidiary from consummating a
transaction pursuant to a definitive agreement entered after the termination of
the restrictions in Section 3.01(a) in accordance with this Section 3.01(b), but
prior to the reinstatement of such restrictions in accordance with this
paragraph.

(c) Most Favored Nation. So long as the Holders continue to Beneficially Own in
the aggregate at least twenty percent (20%) of the Company’s then outstanding
Voting Stock, if the Company engages in a transaction with a Third Party or
group pursuant to which such Third Party or group acquires, through open market
purchases or purchases from the Company, or a combination thereof, Beneficial
Ownership of shares of Voting Stock possessing voting rights equal to or in
excess of the voting rights of 20% of the then outstanding shares of Common
Stock, and the Company either does not enter into a standstill agreement with
respect to such Third Party’s or group’s ownership or enters into a standstill
agreement with such Third Party or group which includes standstill provisions
that are less favorable to the Company than those contained in this
Section 3.01, then the definition of Standstill Period and the provisions of
this Section 3.01 shall be automatically amended to the extent necessary to
conform them to the corresponding provisions of the agreement with such Third
Party or group and the Company shall promptly notify Investor in writing of such
amendments; provided that Investor and GE may, by written notice to the Company,
reject each such change individually (or group of changes as a whole) and elect
to retain the standstill provisions in effect as of immediately prior to the
date on which such provisions would have otherwise been amended in accordance
with this Section 3.01(c). The Company represents that it has not entered into
any transaction with a Third Party or group prior to the date hereof that would
violate this Section 3.01(c) if entered into after the date hereof.

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(d) Termination of Section. This Section 3.01 shall cease and terminate and each
of Investor, GE and each GE Subsidiary will be released from this Section 3.01
when GE and the GE Subsidiaries cease to Beneficially Own in the aggregate ten
percent (10%) or more of the Company’s Voting Stock.

Section 3.02 Dispositions.

(a) Lockup Period.

(i) Subject to the remainder of this Section 3.02, during the Lockup Period the
Investor and GE will not, and GE will cause each of the GE Subsidiaries or any
Permitted Transferees not to, without the prior written consent of the Company,
sell or Transfer any of the Common Shares or Preferred Shares.

(ii) In addition, subject to the remainder of this Section 3.02, during the
Lockup Period, the Holders will not, without the prior written consent of the
Company, (a) establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of the
Exchange Act with respect to any of the Common Shares or Preferred Shares,
whether any such transaction is to be settled by delivery of Common Shares or
Preferred Shares, in cash or otherwise, or (b) publicly disclose the intention
to do any of the foregoing. The foregoing restriction is expressly agreed to
preclude the Holders from engaging in any hedging or other transaction which is
designed to or which reasonably could be expected to lead to or result in a sale
or disposition of the Common Shares or Preferred Shares even if the Common
Shares or Preferred Shares would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would include any
short sale or any purchase, sale or grant of any right (including any put or
call option) with respect to any of the Common Shares or Preferred Shares or
with respect to any security that includes, relates to, or derives any
significant part of its value from the Common Shares or Preferred Shares.

(b) Permitted Dispositions. The restrictions set forth in Section 3.02(a) shall
cease and terminate and each of Investor, GE and each GE Subsidiary will be
released from the obligations of Section 3.02(a) in connection with dispositions
of Common Shares pursuant to any of the following (each event listed in
clauses (i) through (v), a “Permitted Disposition”):

(i) dispositions by a Holder to Investor, GE or any GE Subsidiary, including
subsequent dispositions by such Holder to Investor, GE or any GE Subsidiary so
long as each such transfer is a Permitted Transfer under this Agreement;

(ii) during any three (3) month period, dispositions by the Holders in the
aggregate pursuant to the Rule 144 Volume Limitations;

(iii) dispositions resulting from the exercise of any rights under Section 2.03
of the Registration Rights Agreement;

(iv) dispositions to the Company or its any of its Affiliates;

(v) dispositions following a Third Party or group’s acquisition of (in any
manner) Beneficial Ownership of 25% or more of the outstanding Voting Stock of
the Company or announcement of its intention to acquire (in any manner)
Beneficial Ownership of 25% or more of the outstanding Voting Stock of the
Company;

(vi) dispositions following a Third Party or group’s entrance into an agreement
to acquire (in any manner), or announcement of its intention to acquire (in any
manner) all or substantially all of the assets of the Company;

(vii) dispositions following a Third Party or group’s entrance into an agreement
to acquire (in any manner), or announcement of its intention to acquire (in any
manner) 25% or more of the outstanding Voting Stock of the Company;

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(viii) dispositions following a Third Party or group’s offer, or announcement of
its intention to make an offer, to acquire (in any manner) control of the
Company or to elect two or more directors to the Board (including, without
limitation, through a solicitation of proxies) or otherwise engage in a
transaction that would require approval of the Company’s stockholders;

(ix) dispositions following a Third Party or group’s assistance or encouragement
of any other Person to engage in, or to announce its intention to engage in, any
of the transactions contemplated in sub-clauses (v) through (viii) above;

(x) dispositions following the Company’s entrance into an agreement with respect
to its consolidation, merger, amalgamation, reorganization or otherwise in which
the Company would be merged into or combined with another Person, unless
immediately following the consummation of such transaction the stockholders of
the Company immediately prior to the consummation of such transaction would
continue to hold (in substantially the same proportion as their ownership of the
Company’s Voting Stock) 60% or more of all of the outstanding common stock or
other securities entitled to vote for the election of directors of the surviving
or resulting entity in such transaction or any direct or indirect parent
thereof;

(xi) dispositions following the Company’s public announcement of its intention
to do any of the actions set forth in clauses (v) – (x) or other public
announcement of its intention to explore strategic alternatives, or any public
announcement indicating that it is actively seeking a change in control of the
Company; and

(xii) dispositions to a Third Party pursuant to a tender offer, exchange offer,
merger, consolidation, amalgamation or other reorganization involving the
Company or any of its Voting Stock.

Notwithstanding the foregoing, if, and only if, (x) Permitted Dispositions are
made pursuant to any of clauses (v) – (ix) of this Section 3.02(b) as a result
of a Third Party or group’s announcement of its intention to take any action,
and (y) such Third Party or group (1) publicly retracts or withdraws its prior
announcement of its intention to take such action, or fails to commence such
action within sixty (60) days of such initial announcement, (2) in the case of
clauses (vi) and (vii) above, terminates such definitive agreement or
(3) otherwise finally and definitively fails to consummate such action, then
three (3) Business Days following such public retraction, or in the case of
(2) or (3) above, following written notice from the Company to Investor that
such termination of a definitive agreement or final and definitive failure to
consummate an action has taken place, no further Permitted Dispositions may be
made pursuant to such clause of this Section 3.02(b) for the balance of the
Lock-Up Period, subject to any subsequent events that would allow Permitted
Dispositions under such clause. For the avoidance of doubt, nothing herein shall
prevent Investor, GE and or any GE Subsidiary from consummating a transaction
pursuant to a definitive agreement entered after the inapplicability of the
restrictions in Section 3.02(a) in accordance with this Section 3.02(b), but
prior to the reinstatement of such restrictions in accordance with this
paragraph.

(c) Permitted Transfers. Each of Investor, GE and GE Subsidiary expressly agrees
that during the Lockup Period they will not transfer any of the Shares owned by
them to any other entity that would not be classified as a Holder under this
Agreement other than transfers permitted under Sections 3.02(b)(ii) through
(b)(v). In the event that any Holder makes a Transfer during the Lockup Period
pursuant to Section 3.2(b)(i), such Holder will notify the Company in writing
three (3) business days in advance of any such Transfers during the Lockup
period and will obtain written acknowledgement from any such transferees that
they are Holders under this Agreement and bound by the restrictions of this
Agreement. Any such Transfer made in compliance with this Section 3.02(c) shall
be deemed to be a “Permitted Transfer” under this Agreement. Investor, GE and GE
Subsidiary expressly agree and acknowledge that any Transfer of Shares during
the Lockup Period that is not a Permitted Transfer shall be void ab initio. For
the sake of clarity, the immediately preceding sentence of this Section 3.02(c)
shall not apply to any transfer permitted under Sections 3.02(b)(ii) through
(b)(v).

(d) Most Favored Nation. So long as the Holders continue to Beneficially Own in
the aggregate at least twenty percent (20%) of the Company’s then outstanding
Voting Stock, if the Company engages in a transaction

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with a Third Party or group pursuant to which such Third Party or group
acquires, through open market purchases or purchases from the Company, or a
combination thereof, Beneficial Ownership of shares of Voting Stock possessing
voting rights equal to or in excess of the voting rights of 20% of the then
outstanding shares of Common Stock, and the Company either does not enter into a
lock-up agreement with respect to such Third Party’s or group’s ownership or
enters into a lock-up agreement with such Third Party or group which includes
lock-up provisions that are less favorable to the Company than those contained
in this Section 3.02, then the definition of Lock-Up Period herein and the
provisions of this Section 3.02 shall be automatically amended to the extent
necessary to conform them to the corresponding provisions of the agreement with
such Third Party or group and the Company shall promptly notify Investor in
writing of such amendments; provided that Investor may, by written notice to the
Company, reject each such change (or group of changes as a whole) and elect to
retain the lock-up provisions in effect as of immediately prior to the date on
which such provisions would have otherwise been amended in accordance with this
Section 3.02(d). The Company represents that it has not entered into any
transaction with a Third Party or group prior to the date hereof that would
violate this Section 3.02(d) if entered into after the date hereof.

ARTICLE 4

OTHER COVENANTS

Section 4.01 Application of Covenants. Nothing in this Agreement shall limit the
activities in the ordinary course of business of the financial services
businesses of GE or any GE Subsidiary or any of their Affiliates (including any
pension, retirement or employee benefit fund), including without limitation,
brokerage, money management, financing, financial advisory, arbitrage, sales,
trading and passive market making activities. Without limiting the generality of
the foregoing, this Agreement and the limitations contained herein shall not
apply to General Electric Capital Corporation, GE Ventures Limited or any of
their Subsidiaries or to any of the activities undertaken by General Electric
Capital Corporation, GE Ventures Limited or any of their Subsidiaries. In
addition, this Agreement and the limitations contained herein shall terminate as
to any GE Subsidiary at such time as such Person is no longer a GE Subsidiary.
The Holders agree not to disclose any confidential or material, non-public
information regarding the Company to General Electric Capital Corporation, GE
Ventures Limited or any of their Subsidiaries without the prior written consent
of the Company.

Section 4.02 Voting at Election Meetings. From the date hereof until the earlier
of (a) such date that the rights of Investor under Section 2.01 have terminated
pursuant to this Agreement, or (b) the Company’s breach of any of its
obligations in any material respect set forth in this Agreement and such breach
has not been cured (or is incapable of being cured) by the Company within ten
(10) Business Days following receipt of written notice from Investor specifying
the details of such breach (such uncured breach, hereafter a “Company Breach”),
Investor agrees to vote at any Election Meeting any shares of Voting Stock then
Beneficially Owned by it at in favor of the election of the Company’s slate of
nominees for election to the Board of Directors.

Section 4.03 Purchase Rights. If at any time on or after the date hereof, the
Company grants or issues rights to purchase any shares of capital stock pro rata
to the record holders of shares of Common Stock (the “Purchase Rights”), then
the Company shall offer the Investor and its Affiliates, the right to acquire,
upon the terms applicable to such Purchase Rights, the aggregate number of
shares of capital stock which Investor and its Affiliates could have acquired if
Investor and its Affiliates had held the number of Conversion Shares issuable
upon conversion of all Preferred Shares Beneficially Owned by Investor and its
Affiliates. Any such shares of capital stock acquired by Investor, GE and its
Subsidiaries pursuant to this Section 4.03 shall be exempt from any Takeover
Statute (as defined in the Stock Purchase Agreement).

Section 4.04 Board Observer Rights. So long as the Holders continue to
Beneficially Own in the aggregate at least twenty percent (20%) of the Company’s
then outstanding Voting Stock, GE shall be entitled to have one representative
of Investor, GE or any GE Subsidiary that is mutually agreed upon in advance by
Company (such consent not to be unreasonably withheld) attend all meetings of
the Board of Directors (and any committees upon

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which the Investor Designee sits that are held incident with such Board
Meeting), in a non-voting observer capacity (the “Board Observer”) and, in this
respect, shall give such representative copies of all notices (in the same
manner as provided to the members of Board of Directors), minutes, consents and
other materials that it has provided to its directors in connection with such
meeting; provided, however, that the Company reserves the right to exclude such
representative from access to any of such materials or meetings or portions
thereof if the Company believes that (a) any such material or portion thereof to
be a trade secret or similar confidential information, or (b) such exclusion is
necessary to preserve the attorney-client privilege. GE shall be entitled to
select a substitute person to serve as Board Observer that is mutually agreed in
advance by the Company (such consent not to be unreasonably withheld), provided
that GE may not appoint a new Board Observer more than once in any twelve
(12) month period.

Section 4.05 Confidentiality. The Company shall hold in confidence and not make
any disclosure of information concerning the Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the release of such information is ordered pursuant
to a subpoena or other final, non-appealable order from a court or governmental
body of competent jurisdiction, or (iii) such information has been made
generally available to the public other than by disclosure in violation of this
Agreement or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning the Investor is sought
in or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to the Investor and allow the Investor, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.

Section 4.06 Listing of Shares. The Company shall use its reasonable best
efforts to maintain the authorization for quotation of the Company’s Common
Stock on its Current Market or any other Eligible Market.

Section 4.07 Reservation of Common Stock. The Company covenants that it shall at
all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock, solely for the purpose of issuance upon
conversion of the Preferred Shares, such number of shares of Common Stock as
shall then be issuable upon the conversion of all of the Preferred Shares. The
Company covenants that all shares of Common Stock which shall be issuable upon
any conversion of the Preferred Shares shall, upon such issuance, be duly and
validly issued and fully paid and non-assessable

Section 4.08 Shareholder Rights Agreement. The Company agrees that it shall not
adopt any shareholder rights agreement of a type commonly known as a “poison
pill” unless the Company provides that the provisions of such shareholders
rights agreement or rights plan specifically permit Holders to Beneficially Own
the percentage of the Company’s outstanding Voting Stock which the Holders
Beneficially Own as of the date of adoption of such shareholder rights
agreement, increased by the percentage of Beneficial Ownership represented by
any shares of Voting Stock which the Holders obtain or may in the future obtain
pursuant to the terms of the Preferred Stock, or as a result of any stock
dividend, stock split or other recapitalization of the Company, or pursuant to
any exercise of their rights set forth in Section 4.03 of this Agreement. The
intention of the Parties is that the Holders will be “grandfathered in” with
respect to such Beneficial Ownership and the Holders will not be trigger any
distribution of rights or otherwise be deemed to be an “acquiring person” under
any shareholder rights agreement or rights plan as a result of the acquisition
of any securities contemplated in the previous sentence or any increase in
Holder’s Beneficial Ownership as contemplated by this Section 4.08.

ARTICLE 5

TERMINATION

Section 5.01 Termination. In addition to the termination provisions applicable
to particular Sections of this Agreement that are specifically provided
elsewhere in this Agreement, this Agreement shall terminate and the covenants
set forth herein shall cease upon the earlier to occur of the following: (a) at
any time upon the mutual written agreement of the Company, on the one hand, and
GE and Investor, on the other hand; and (b) at such time

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as the Holders cease to Beneficially Own ten percent (10%) or more the
outstanding Voting Stock of the Company. In addition, Investor and GE shall have
the right to (i) terminate this Agreement and covenants set forth herein or
(ii) terminate the restrictions set forth in Article 3 of this Agreement, upon a
Company Breach, and the Company shall have the right to (i) terminate this
Agreement and the covenants set forth herein or (ii) terminate the Board
representation rights set forth in Article 2 of this Agreement, upon a Holder
Breach.

Section 5.02 Survivability of Company Obligations. Notwithstanding any
termination of this Agreement, the Company’s obligations in the second sentence
of Section 2.04, Section 4.03, and Article 6 shall survive any termination of
this Agreement.

ARTICLE 6

MISCELLANEOUS

Section 6.01 Amendment and Modification. This Agreement may be amended, restated
supplemented or otherwise modified, and any provision hereof may be waived, only
by written agreement making specific reference to this Agreement or provision to
be waived, in each case duly executed by the Company and holders of a majority
in interest of the Shares determined on an as converted basis.

Section 6.02 Titles and Subtitles; Interpretation. Unless otherwise indicated
herein, with respect to any reference made in this Agreement to a Section (or
Article, Subsection, Paragraph, Subparagraph or Clause), such reference shall be
to a section (or article, subsection, paragraph, subparagraph or clause) of, or
an exhibit or schedule to, this Agreement. The table of contents and any
article, section, subsection, paragraph or subparagraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any reference made in this
Agreement to a statute or statutory provision shall mean such statute or
statutory provision as it has been amended through the date as of which the
particular portion of the Agreement is to take effect, or to any successor
statute or statutory provision relating to the same subject as the statutory
provision so referred to in this Agreement, and to any then applicable rules or
regulations promulgated thereunder. Whenever the words “include,” “includes” or
“including” are used in this Agreement, they shall be deemed, as the context
indicates, to be followed by the words “but (is/are) not limited to.” The words
“herein,” “hereof,” “hereunder” and words of like import shall refer to this
Agreement as a whole, unless the context clearly indicates to the contrary.
Words used herein, regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate. Where specific language is used to clarify or illustrate by example
a general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict the construction of the general statement which is
being clarified or illustrated.

Section 6.03 Waiver. No failure on the part of any party hereto to exercise, and
no delay in exercising, any right, power or remedy under this Agreement shall
operate as a waiver hereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. Any agreement on
the part of a party to any waiver shall be valid only if set forth in a written
instrument signed by such party. No failure to exercise, delay in exercising, or
single or partial exercise of any right, power or remedy by any party, and no
course of dealing among the parties, shall constitute a waiver of any such
right, power or remedy.

Section 6.04 Binding Nature; Assignment. This Agreement and all of the
provisions hereof will be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the parties
hereto. Neither party hereto may assign (whether by operation of Law or
otherwise) this Agreement or any rights, interests or obligations provided by
this Agreement without the prior written consent of the other party hereto;
provided, however, that the Investor may assign this Agreement and any or all
rights, interests and obligations under this Agreement to any Holders upon prior
written notice to the Company. For the sake of clarity, each transferee of
Shares in connection with an assignment permitted by the previous sentence shall
be

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deemed to be a “Holder” for purposes of this Agreement and Company shall have
recourse against any Holders for breaches of this Agreement. Any attempted
assignment in violation of this Section 6.04 shall be void ab initio.

Section 6.05 Severability. If any term or provision of this Agreement is held
invalid, illegal or unenforceable in any respect under any applicable Law or as
a matter of public policy, the validity, legality and enforceability of all
other terms and provisions of this Agreement will not in any way be affected or
impaired. If the final judgment of a court of competent jurisdiction or other
Governmental Authority declares that any term or provision hereof is invalid,
illegal or unenforceable, the parties hereto agree that the court making such
determination will have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, illegal or unenforceable term or provision with a term
or provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the invalid, illegal or unenforceable term or
provision.

Section 6.06 Notices and Addresses. All notices and other communications under
or by reason of this Agreement shall be in writing and shall be deemed to have
been duly given or made: (a) when personally delivered, (b) when delivered by
facsimile or e-mail transmission with receipt confirmed (followed by delivery of
an original by another delivery method provided for in this Section 6.06), or
(c) one (1) Business Day after deposit with overnight courier service, in each
case to the addresses and attention parties indicated below (or such other
address, facsimile number, e-mail address or attention party as the recipient
party has specified by prior notice given to the sending party in accordance
with this Section 6.06:

(a) if to the Investor to:

GE Medical Holding AB

Björkgatan 30

75184 Uppsala, Sweden

Attention: Legal Administrator

Facsimile: (+46) 186121810

and

GE Healthcare Life Sciences

350 Campus Drive

Marlborough, Massachusetts 01752-3082

Attention: General Counsel

Facsimile: (609) 228-6148

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

GE Medical Holding AB

c/o GE Healthcare Limited

Pollards Wood

Nightingales Lane

Chalfont St Giles

Buckinghamshire HP8 4SP

United Kingdom

Attention: Executive Counsel, M&A

Facsimile: +44 1494 545 275

and

Paul Hastings LLP

71 South Wacker Drive, Suite 4500

Chicago, IL 60606

  Attention: Thaddeus J. Malik

       Richard S. Radnay

  Facsimile: (312) 499-6100

  E-mail: thaddeusmalik@paulhastings.com

       richardradnay@paulhastings.com

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and

Paul Hastings LLP

695 Town Center Drive, Seventeenth Floor

Costa Mesa, CA 92926

Attention: Stephen D. Cooke

Facsimile: (714) 668-6364

E-mail: stephencooke@paulhastings.com

(b) if to GE:

General Electric Company

GE Healthcare Life Sciences

350 Campus Drive

Marlborough, Massachusetts 01752-3082

Attention: General Counsel

Facsimile: (609) 228-6148

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

Paul Hastings LLP

71 South Wacker Drive, Suite 4500

Chicago, IL 60606

  Attention: Thaddeus J. Malik

       Richard S. Radnay

  Facsimile: (312) 499-6100

  E-mail: thaddeusmalik@paulhastings.com

       richardradnay@paulhastings.com

and

Paul Hastings LLP

695 Town Center Drive, Seventeenth Floor

Costa Mesa, CA 92926

Attention: Stephen D. Cooke

Facsimile: (714) 668-6364

E-mail: stephencooke@paulhastings.com

(c) if to the Company:

NeoGenomics, Inc.

12701 Commonwealth Drive, Suite 9

Fort Myers, FL 33913

Attention: Douglas M. VanOort, CEO

Facsimile: (239) 768-0600

E-mail: dvanoort@neogenomics.com

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

K&L Gates LLP

200 South Biscayne Boulevard, Suite 3900

Miami, Florida 33131

Attention: Clayton E. Parker, Esq.

Facsimile: (305) 358-7095

E-mail: clayton.parker@klgates.com

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Section 6.07 Governing Law. This Agreement and any Action arising out of or
relating in any way to this Agreement, whether in contract, tort, common law,
statutory law, equity, or otherwise, including any question regarding its
existence, validity, or scope (each, a “Transaction Dispute”), shall be governed
by, construed and enforced in accordance with the Laws of the State of New York
without giving effect to any choice of law rules that would cause the
application of Laws of any jurisdiction other than those of the State of New
York. Investor will cause the Investor Indemnitees, and the Company will cause
the Company Indemnitees, to comply with the foregoing as though such Indemnified
Parties were a party to this Agreement.

Section 6.08 Complete Agreement. This Agreement (including the exhibit hereto)
and the other Transaction Agreements collectively constitute and contain the
entire agreement and understanding of the parties hereto with respect to the
subject matter hereof and thereof and supersede all prior negotiations,
correspondence, understandings and contracts among the parties hereto respecting
the subject matter hereof and thereof.

Section 6.09 No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their respective successors and permitted
assigns, and nothing in this Agreement shall create or be deemed to create any
third-party beneficiary rights in any Person not a party to this Agreement,
including any Affiliates of any party hereto.

Section 6.10 Counterparts and Signatures. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. Facsimiles, e-mail
transmission of .pdf signatures or other electronic copies of signatures shall
be deemed to be originals.

Section 6.11 Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.

Section 6.12 Remedies; Specific Performance.

(a) Except to the extent set forth otherwise in this Agreement, all remedies
under this Agreement expressly conferred upon a party hereto will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
Law or equity upon such party, and the exercise by a party hereto of any one
remedy will not preclude the exercise of any other remedy.

(b) Each party hereto agrees that irreparable damage would occur and the parties
would not have an adequate remedy at Law if any provision of this Agreement is
not performed in accordance with its specific terms or is otherwise breached.
Accordingly, each party hereto agrees that the other parties will be entitled to
injunctive relief from time to time to prevent breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions of this
Agreement without the requirement of posting any bond or other indemnity, in
addition to any other remedy to which it may be entitled, at Law or in equity,
and each party hereto agrees not to raise any objections to the availability of
the equitable remedy of specific performance to prevent or restrain breaches of
this Agreement, and to specifically enforce the terms of this Agreement to
prevent breaches or threatened breaches of, or to enforce compliance with, the
covenants and obligations of such party under this Agreement.

Section 6.13 Dispute Resolution; Consent to Jurisdiction.

(a) Any Transaction Dispute will exclusively be brought and resolved in the
U.S. District Court for the Southern District of New York (where federal
jurisdiction exists) or the Commercial Division of the Courts of the State of
New York sitting in the County of New York (where federal jurisdiction does not
exist), and the

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

appellate courts having jurisdiction of appeals in such courts. In that context,
and without limiting the generality of the foregoing, each party irrevocably and
unconditionally:

(i) submits for itself and its property to the exclusive jurisdiction of such
courts with respect to any Transaction Dispute and for recognition and
enforcement of any judgment in respect thereof, and agrees that all claims in
respect of any Transaction Dispute shall be heard and determined in such courts;

(ii) agrees that venue would be proper in such courts, and waives any objection
that it may now or hereafter have that any such court is an improper or
inconvenient forum for the resolution of any Transaction Dispute; and

(iii) agrees that the mailing by certified or registered mail, return receipt
requested, to the Persons listed in Section 6.06 of any process required by any
such court, will be effective service of process; provided, however, that
nothing herein will be deemed to prevent a party from making service of process
by any means authorized by the Laws of the State of New York.

(b) The foregoing consent to jurisdiction will not constitute submission to
jurisdiction or general consent to service of process in the State of New York
for any purpose except with respect to any Transaction Dispute.

Section 6.14 Actions of the Investor Designees. Notwithstanding any of the
provisions of this Agreement, nothing in this Agreement shall restrict or
otherwise apply to the activities of any Investor Designee in such Person’s
capacity as a director of the Company.

Section 6.15 Breaches by the Board. In the event of any breach of this Agreement
in any material respect by the Board or by the NGC, such breach shall be deemed
a breach by the Company.

Section 6.16 No Recourse. This Agreement may only be enforced against, and any
Action based upon, arising out of, or related to this Agreement may only be
brought against the entities that are expressly named as parties hereto and then
only with respect to the specific obligations set forth herein with respect to
such party. Except to the extent a named party (and then only to the extent of
the specific obligations undertaken by such named party in this Agreement and
not otherwise), no past, present or future director, officer, employee,
incorporator, authorized person, member, partner, stockholder, Affiliate, agent,
attorney or their respective Affiliates shall have any Liability (whether in
contract or tort) for any one or more of the representations, warranties,
covenants, agreements or other obligations or liabilities of either Investor,
Company or GE under this Agreement (whether for indemnification or otherwise) of
or for any claim based on, in respect of, or by reason of, the transactions
contemplated by this Agreement.

Section 6.17 Waiver of Jury Trial. To the maximum extent permitted by Law, each
party irrevocably and unconditionally waives any right to trial by jury in any
forum in respect of any Transaction Dispute and covenants that neither it nor
any of its Affiliates or representatives will assert (whether as plaintiff,
defendant or otherwise) any right to such trial by jury. Each party certifies
and acknowledges that (a) such party has considered the implications of this
waiver, (b) such party makes this waiver voluntarily and (c) such waiver
constitutes a material inducement upon which such party is relying in entering
into the Agreement. Each party may file an original counterpart or a copy of
this Section 6.17 with any court as written evidence of the consent of each
party to the waiver of its right to trial by jury.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto caused this Agreement to be duly executed
by their respective authorized officers on the day and year first above written.

 

NeoGenomics, Inc., a Nevada corporation

By:    

 

 

  Name:   Title:

 

GE Medical Holding AB, a private limited company (privat aktiebolag) organized
under the laws of the Kingdom of Sweden

By:

 

 

  Name:   Title:

 

General Electric Company, a New York corporation, on behalf of itself and each
GE Subsidiary (as defined in this Agreement)

By:

 

 

  Name:   Title:

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Exhibit H

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made as of this     
day of December, 2015, by and between NeoGenomics, Inc., a Nevada corporation
(the “Company”), and GE Medical Holding AB, a private limited company (privat
aktiebolag) organized under the laws of the Kingdom of Sweden (the “Investor”).

WHEREAS, the Company, NeoGenomics Laboratories, Inc., a Florida corporation and
subsidiary of the Company and the Investor are parties to that certain Stock
Purchase Agreement, dated as of October 20, 2015 (the “Stock Purchase
Agreement”), pursuant to which the Investor will receive on the date hereof,
(i) 15,000,000 shares of the Company’s Common Stock (the “Common Shares”), and
(ii) 14,666,667 shares of the Company’s Preferred Stock (the “Preferred Shares”,
and together with the Common Shares, the “Shares”) which Preferred Shares are
convertible into Common Stock in accordance with their terms (the shares of
Common Stock issuable upon conversion of the Preferred Shares, collectively, the
“Conversion Shares”), as a portion of the consideration for the sale of
Investor’s shares of capital stock in Clarient, Inc.; and

WHEREAS, in connection with the Stock Purchase Agreement and the issuance of the
Shares to the Investor, the parties desire to enter into this Agreement in order
to establish certain rights and restrictions relating to the registration of the
Shares.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained and for other good and valid consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01 Definitions. The following terms shall have the following meanings:

“Action” has the meaning set forth in the Stock Purchase Agreement.

“Affiliate” has the meaning set forth in the Stock Purchase Agreement.

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

“Beneficial Owner,” “Beneficial Ownership,” “Beneficially Own” or “Beneficially
Owned” shall refer to the concept of “ beneficial ownership” in Rule 13d-3
promulgated under the Exchange Act.

“Board” or “Board of Directors” means the Board of Directors of the Company.

“brokers’ transaction” has the meaning ascribed to such term under Rule 144(g)
under the Securities Act.

“Business Day” means a day, other than Saturday, Sunday or public holidays in
the United States of America.

“Closing” has the meaning set forth in the Stock Purchase Agreement.

“Closing Date” has the meaning set forth in the Stock Purchase Agreement.

“Common Stock” means the Common Stock of the Company, par value $0.001 per
share.

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

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“Company Indemnitees” has the meaning set forth in Section 2.06(b).

“Company Supported Distribution” means a public underwritten offering by the
Company of Registrable Securities that is designated by the Holders as a
“Company Supported Distribution” in the applicable Shelf Take-Down Notice or
Demand Notice.

“Conversion Shares” has the meaning set forth in the Preamble.

“Demand Notice” has the meaning set forth in Section 2.02(a).

“Demand Registration” has the meaning set forth in Section 2.02(a).

“Demand Registration Statement” has the meaning set forth in Section 2.02(a).

“Eligible Market” means The NASDAQ Global Select Market, The New York Stock
Exchange, Inc., THE NYSE MKT LLC, The NASDAQ Capital Market, or The Nasdaq
Global Market.

“Equity Securities” of the Company means any capital stock or other equity
interests of the Company, any securities convertible into, exercisable for or
exchangeable for capital stock or other equity interests of the Company, and any
other rights, warrants or options to acquire any of the foregoing securities.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor federal statute, and the rules and regulations thereunder, all as the
same shall be in effect from time to time.

“Existing Registration Rights Agreements” means (i) that Registration Rights
Agreement dated March 23, 2005, by the Company for the benefit of Aspen Select
Healthcare, LP, John Elliot, Steven Jones, Larry Kuhnert and Michael T. Dent,
M.D., (ii) that Registration Rights Agreement dated March 30, 2006, by the
Company for the benefit of Aspen Select Healthcare, LP and Steven C. Jones,
(iii) that Registration Rights Agreement dated January 10, 2011, by and between
the Company and Kevin C. Johnson, (iv) that Registration Rights Agreement dated
January 10, 2011, by and between the Company and the Steven and Carisa Jones
Defined Benefit Pension Plan & Trust, (v) that Registration Rights Agreement
dated January 10, 2011, by and between the Company and the George A Cardoza
Living Trust, and (vi) that Registration Rights Agreement dated January 10,
2011, by and between the Company and the Douglas M. VanOort Living Trust.

“FINRA” means the Financial Industry Regulatory Authority.

“GE” means General Electric Company, a New York corporation.

“GE Subsidiary” means any Subsidiary of GE.

“Governmental Authority” has the meaning set forth in the Stock Purchase
Agreement.

“Holders” means Investor and any other Person to whom Shares and rights,
interests or obligations hereunder have been Transferred to as permitted by
Section 5.04 below and the Investor Rights Agreement.

“Holder Indemnitees” has the meaning set forth in Section 2.06(a).

“Indemnified Party” has the meaning set forth in Section 2.06(c).

“Indemnifying Party” has the meaning set forth in Section 2.06(c).

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

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

“Law” has the meaning set forth in the Stock Purchase Agreement.

“Legal Counsel” shall have the meaning set forth in Section 2.05(d).

“Losses” shall have the meaning set forth in Section 2.06(a).

“Market Material Adverse Effect” means (i) any change in financial markets in
the U.S. or in international financial, political or economic conditions,
currency exchange rates or exchange controls the effect of which is to make it
impractical to market offerings of debt or equity securities or to enforce
contracts for the sale of debt or equity securities, whether in the primary
market or in respect of dealings in the secondary market; (ii) any suspension or
material limitation of trading in securities generally on the NASDAQ or the
Eligible Market on which the Company’s securities are listed, or any setting of
minimum or maximum prices for trading on such exchange; (iii) any banking
moratorium declared by any U.S. federal, Delaware or New York authorities;
(iv) any major disruption of settlements of securities, payment, or clearance
services in the United States; or (v) any attack on, outbreak or escalation of
hostilities or act of terrorism involving the United States, any declaration of
war by Congress or any other national or international calamity or emergency
which makes it impractical to market offerings of debt or equity securities or
to enforce contracts for the sale of debt or equity securities in the United
States.

“Other Securities” means the Common Stock or other securities of the Company
which the Company is registering pursuant to a Registration Statement covered by
ARTICLE 2.

“Person” means any individual, sole proprietorship, partnership, limited
liability company, corporation, association, joint stock company, trust, joint
venture, unincorporated organization, any other business organization or entity,
or Governmental Authority.

“Piggyback Notice” has the meaning set forth in Section 2.03(a).

“Piggyback Registration” has the meaning set forth in Section 2.03(a).

“Preferred Stock” means the Series A Preferred Stock of the Company, par value
$0.001 per share.

“Prospectus” means the prospectus included in any Registration Statement, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such prospectus.

“Registrable Securities” means (i) the Common Shares and (ii) the Conversion
Shares issued or issuable upon conversion of the Preferred Shares, as well as
any shares of Common Stock or other securities issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange generally
for, or in replacement generally of, such Shares, Conversion Shares or other
Registrable Securities, and any securities issued in exchange for such Shares,
Conversion Shares or other Registrable Securities in any merger, reorganization,
consolidation, share exchange, recapitalization, restructuring or other
comparable transaction of the Company. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to the sale by the Holder has
been declared or deemed effective by the SEC and such securities have been
disposed of pursuant to such effective Registration Statement, (ii) such
securities have been sold, exchanged or otherwise disposed of by a Holder (other
than in accordance with Section 5.04), (iii) such securities shall have ceased
to be outstanding, or (iv) such securities have been or could all be sold in a
single transaction without volume or other limitations pursuant to Rule 144.

“Registration Expenses” has the meaning set forth in Section 2.04(a).

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

“Rule 144” means Rule 144 promulgated under the Securities Act or any other
similar rule or regulation of the SEC that may at any time permit the Holders to
sell Registrable Securities to the public without registration.

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

“Securities Act” means the Securities Act of 1933, as amended, and any successor
federal statute, and the rules and regulations thereunder, all as the same shall
be in effect from time to time.

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

“Shelf Registration Statement” has the meaning set forth in Section 2.01(a).

“Shelf Take-Down Notice” has the meaning set forth in Section 2.01(b).

“Stock Purchase Agreement” has the meaning set forth in the Recitals.

“Subsidiary” has the meaning set forth in the Stock Purchase Agreement.

“Suspension Period” has the meaning set forth in Section 2.05(a)(ii).

“Transfer” means (i) sell, assign, give, pledge, encumber, hypothecate,
mortgage, exchange or otherwise dispose, (ii) grant to any Person any option,
right or warrant to purchase or otherwise receive, or (iii) enter into any swap
or other agreement that transfers, in whole or in part, any of the economic
consequences or other rights of ownership.

ARTICLE 2

REGISTRATION RIGHTS

Section 2.01 Shelf Registration.

(a) On or before the earlier to occur of (i) the twenty-one (21)-month
anniversary of the date of this Agreement or (ii) the date which is six
(6) months after the Company has redeemed all of the Preferred Shares held by
all Holders (such date hereafter, the “Lock-up Expiration”), the Company shall
file with the SEC a Registration Statement providing for registration and
resale, on a continuous or delayed basis pursuant to Rule 415 under the
Securities Act, as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC, of all of the Registrable
Securities (such registration statement, a “Shelf Registration Statement”). The
Shelf Registration Statement shall be on Form S-3 (or any comparable or
successor form or forms then in effect) under the Securities Act; provided,
however, that if the Company is a well-known seasoned issuer (as defined in Rule
405 under the Securities Act) at the time of filing of the Shelf Registration
Statement with the SEC, such Shelf Registration Statement shall be designated by
the Company as an automatic shelf registration statement (as defined in Rule 405
under the Securities Act). The Shelf Registration Statement shall contain
(except if otherwise directed by a Holder) the “Plan of Distribution” section in
substantially the form attached hereto as Exhibit A and shall name the Holders
as the selling security holders.

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The Company shall use commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective under the Securities Act until the
Holders no longer hold any Registrable Securities. If the Shelf Registration
Statement is not on Form S-3ASR, the Company shall use commercially reasonable
efforts to cause the Shelf Registration Statement to become effective, as
promptly as practicable, but in no event later than ninety (90) days after the
filing of such Shelf Registration Statement.

(b) In the event any Holder wishes to sell Registrable Securities pursuant to a
Shelf Registration Statement and related Prospectus (a “Shelf Take-Down”) in an
underwritten offering after the Lock-up Expiration, such Holder shall notify the
Company of such intent (a “Shelf Take-Down Notice”) and shall deliver such Shelf
Take-Down Notice at least ten (10) Business Days prior to any intended
distribution of Registrable Securities under the Shelf Registration Statement if
a Company Supported Distribution is not also being requested as part of such
Shelf Take-Down Notice, or least thirty (30) Business Days prior to any intended
distribution of Registrable Securities under the Shelf Registration Statement if
a Company Supported Distribution is being requested as part of the Shelf
Take-Down Notice. The Company shall reasonably cooperate with the Holder to
facilitate any such distribution requested in a Shelf Take-Down Notice,
including making such revisions to the Plan of Distribution as reasonably
requested and taking the actions required pursuant to Sections
2.05(a)(ix)-(xv) and pursuant to Section 2.05(a)(xvi) if a Company Supported
Distribution is requested in such Shelf-Take-Down Notice. From and after the
date the Shelf Registration Statement is declared or deemed effective, the
Company shall, as promptly as practicable after the date of the Shelf Take-Down
Notice:

(i) prepare and, if required by applicable Law, file a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document in such a manner as to permit the
Holders to deliver or be deemed to have delivered such Prospectus to purchasers
of Registrable Securities in accordance with applicable Law; and

(ii) provide the Holders copies of any documents filed pursuant to
Section 2.01(b)(i).

(c) In the event that the Holders request a Shelf Take-Down via an underwritten
offering during a Suspension Period, the Company, in its sole discretion may
delay assisting with such Shelf Take-Down until such time as a Suspension Period
is no longer in effect.

(d) In the case that Holders request a Company Supported Distribution, the
Holders shall have the right to notify the Company that they have determined
that the Shelf Take-Down be abandoned or withdrawn, in which event the Company
shall promptly abandon or withdraw all activities undertaken in connection with
such offering with respect to Registrable Securities, and such withdrawn Shelf
Take-Down shall not count against the limit of such Company Supported
Distributions set forth in Section 2.05(a)(xvi). However, if such Shelf Take
Down is abandoned or withdrawn after any underwriter has commenced marketing
activities with respect to such offering and the Company’s name has been
disclosed to more than seven (7) investors (a “Launch”), then such Shelf Take
Down will count against the limit of such Company Supported Distributions set
forth in Section 2.05(a)(xvi) unless (i) such abandonment or withdrawal is based
upon material adverse information concerning the Company that the Company has
not publicly disclosed in compliance with applicable securities Laws at least
five (5) Business Days prior to the Company’s receipt of such withdrawal
request, or (ii) there occurs an event or series of related events that (A) has
a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company or (B) has caused a Market
Material Adverse Effect. In the event that a Shelf Take-Down is abandoned or
withdrawn for any reason other than the reasons set forth in clauses (i) or
(ii) of the preceding sentences, the Holders shall reimburse the Company for all
Registration Expenses incurred by the Company in connection with any such
abandoned or withdrawn Shelf Take-Down.

(e) The Holders agree that the Company may include any Other Securities covered
by any Existing Registration Rights Agreements that it deems appropriate in any
Shelf Registration Statement filed pursuant to this Agreement, subject to the
cutback limitations set forth in Section 2.01(f).

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(f) In the event that the SEC sets forth a limitation on the securities that may
be registered on a particular Shelf Registration Statement, the Company may
reduce the number of securities to be registered on such Shelf Registration
Statement to such number of securities as allowed by the SEC; provided, that,
the Company shall include in such Shelf Registration Statement (i) first, the
quantity of Registrable Securities requested to be included in such Shelf
Registration Statement and (ii) second, any remaining amounts, if any, shall be
allocable to holders of Other Securities, pro rata, based on the number of Other
Securities proposed by the Company to be included in such Shelf Registration
Statement and the number of Other Securities Beneficially Owned by each such
holder of Other Securities. If less than all of the Registrable Securities may
be included in such Shelf Registration Statement, the Company shall as soon as
practicable, subject to the rules and regulations of the SEC, file such
additional Shelf Registration Statements as necessary to register all of the
Registrable Securities on Shelf Registration Statements in accordance with this
Section 2.01.

Section 2.02 Demand Registration.

(a) At any time following the second (2nd) anniversary of the date of this
Agreement, in the event that Shelf Registration Statement is not effective with
the SEC covering all of the Registrable Securities of the Holders, the Holders
shall have the right, subject to the rules and regulations of the SEC, by
delivering a written notice to the Company (a “Demand Notice”), to require the
Company to register under and in accordance with the provisions of the
Securities Act the number of Registrable Securities Beneficially Owned by the
Holders and requested by such Demand Notice to be so registered (a “Demand
Registration”); provided, however , that the Holders in the aggregate shall not
be entitled pursuant to this Section 2.02 to require the Company to effectuate
more than two (2) Demand Registrations (which may collectively include
underwritten Demand Registrations and Company Supported Distributions) during
the Term of this Agreement. Notwithstanding the foregoing, if the at least
5,000,000 Preferred Shares (as adjusted for splits, dividends, reclassifications
and the like) convert into the applicable number of Conversion Shares then the
number of Demand Registrations that the Company may be obligated to undertake
shall increase to three (3) and if at least 10,000,000 Preferred Shares (as
adjusted for splits, dividends, reclassifications and the like) convert into the
applicable number of Conversion Shares then the number of Demand Registrations
that the Company may be obligated to undertake shall increase to four (4) and
the Holders shall be entitled to deliver a Demand Notice for up to the two
additional Demand Registrations any time after such conversion of the Preferred
Shares into Conversion Shares has taken place. A Demand Notice shall also
specify the expected method or methods of disposition of the applicable
Registrable Securities. Following receipt of a Demand Notice, the Company shall
use commercially reasonable efforts to file, as promptly as reasonably
practicable, but not later than forty-five (45) days after receipt by the
Company of such Demand Notice provided that a Suspension Period is not in
effect, a Registration Statement relating to the offer and sale of the
Registrable Securities requested to be included therein by the Holders in
accordance with the methods of distribution elected (a “Demand Registration
Statement”) and shall use commercially reasonable efforts to cause such
Registration Statement to be declared effective under the Securities Act as
promptly as practicable after the filing thereof. The Holders agree that if any
Holder intends to distribute any Registrable Securities by means of an
underwritten offering it shall promptly so advise the Company and the Company
shall cooperate with the Holder to facilitate such distribution, including the
actions required pursuant to Sections 2.05(a)(ix)-(xv) and, if a Company
Supported Distribution is requested, Section 2.05(a)(xvi) so long as the Holders
have not previously exhausted the limit for such Company Supported Distributions
specified in Section 2.05(a)(xvi).

(b) The Holders agree that the Company may include any Other Securities covered
by any Existing Registration Rights Agreements that it deems appropriate in any
Demand Registration Statement filed pursuant to this Agreement, subject to the
cutback limitations set forth in Section 2.02(c) and Section 2.02(d).

(c) In the event that the SEC sets forth a limitation on the securities that may
be registered on a particular Demand Registration Statement, the Company may
reduce the number of securities to be registered on such Demand Registration
Statement to such number of securities as allowed by the SEC; provided, that,
the Company shall include in such Demand Registration Statement (i) first, the
quantity of Registrable Securities

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requested to be included in such Demand Registration Statement and (ii) second,
any remaining amounts, if any, shall be allocable to holders of Other
Securities, pro rata, based on the number of Other Securities proposed by the
Company to be included in such Demand Registration Statement and the number of
Other Securities Beneficially Owned by each such holder of Other Securities.

(d) If any of the Registrable Securities registered pursuant to a Demand
Registration are to be sold in a firm commitment underwritten offering, and the
managing underwriter of such underwritten offering advises the Company or
Holders in writing that it is their good faith opinion that the total number or
dollar amount of Registrable Securities proposed to be sold in such offering,
together with any Other Securities proposed to be included by the Company or
holders thereof which are entitled to include securities in such Registration
Statement, exceeds the total number or dollar amount of such securities that can
be sold without having an adverse effect on the price, timing or distribution of
the Registrable Securities to be so included together with all such Other
Securities, then there shall be included in such firm commitment underwritten
offering the number or dollar amount of Registrable Securities and such Other
Securities that in the opinion of such managing underwriter can be sold without
so adversely affecting such offering, and such number of Registrable Securities
and Other Securities shall be allocated for inclusion as follows:

(i) first, up to eighty five percent (85%) of the total shares included in such
underwritten offering shall be comprised of the Registrable Securities for which
inclusion in such underwritten offering was requested by the Holders; and

(ii) second, the Company may include up to fifteen percent (15%) or such lower
amount of the total shares included in such underwritten offering; and

(iii) third, any remaining amounts, if any, shall be allocable to holders of
Other Securities, pro rata, based on the number of Other Securities proposed by
the Company to be included in such underwritten offering and the number of Other
Securities Beneficially Owned by each such holder of Other Securities;

(e) In the event of a Demand Registration, the Company shall be required to
maintain the continuous effectiveness of the applicable Registration Statement
for a period of at least one hundred twenty (120) days after the effective date
thereof or such shorter period in which all Registrable Securities included in
such Registration Statement have actually been sold.

(f) Any Holder whose Registrable Securities are covered by a Demand Registration
shall have the right to notify the Company that it has determined that the
Registration Statement relating to the Demand Registration be abandoned or
withdrawn with respect to such Registrable Securities, in which event the
Company shall promptly abandon or withdraw such Registration Statement with
respect to such Registrable Securities. In the event that the Company has not
yet filed the Demand Registration Statement with the SEC, such abandoned Demand
Registration Statement shall not count against the limit for Demand
Registrations specified in Section 2.02(a). However, if the Company has already
filed the Demand Registration Statement with the SEC and the Holders request
that it be withdrawn, the Holders agree that such withdrawn Demand Registration
Statement shall count against the limit for Demand Registrations specified in
Section 2.02(a) and will reimburse the Company for all Registration Expenses
incurred by the Company in connection with such withdrawn Demand Registration
Statement, unless (i) such abandonment or withdrawal is based upon material
adverse information concerning the Company that the Company has not publicly
disclosed in compliance with applicable securities Laws at least five
(5) Business Days prior to the Company’s receipt of such withdrawal request, or
(ii) there occurs an event or series of related events that (A) has a material
adverse effect on the business, assets, condition (financial or otherwise) or
results of operations of the Company or (B) has caused a Market Material Adverse
Effect.

(g) In the case that Holders request a Company Supported Distribution in
connection with a Demand Registration, the Holders shall have the right to
notify the Company that they have determined that the offering

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be abandoned or withdrawn, in which event the Company shall promptly abandon or
withdraw all activities undertaken in connection with such offering with respect
to Registrable Securities. In the event that the Company has not yet Launched
the offering, such withdrawn or abandoned offering shall not count against the
limit of such Company Supported Distributions set forth in Section 2.05(a)(xvi).
However, if such offering is abandoned or withdrawn after the offering has
Launched, then such abandoned or withdrawn offering will count against the limit
of such Company Supported Distributions set forth in Section 2.05(a)(xvi) unless
(i) such abandonment or withdrawal is based upon material adverse information
concerning the Company that the Company has not publicly disclosed in compliance
with applicable securities Laws at least five (5) Business Days prior to the
Company’s receipt of such withdrawal request, or (ii) there occurs an event or
series of related events that (A) has a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company or (B) has caused a Market Material Adverse Effect. In the event that
such offering is abandoned or withdrawn for any reason other than the reason set
forth in clauses (i) or (ii) of the preceding sentences, the Holders shall
reimburse the Company for all Registration Expenses incurred by the Company in
connection with any such abandoned or withdrawn Company Supported Distribution.

Section 2.03 Piggyback Registration.

(a) If the Company proposes to file a Registration Statement under the
Securities Act at any time following the earlier of (x) the two (2) year
anniversary of the date of this Agreement, (y) the date which is six (6) months
after all of the Preferred Shares have been redeemed by the Company and (z) the
date of this Agreement, solely with respect to an amount of Registrable
Securities not to exceed the volume limitations set forth in clause (e) of Rule
144 as calculated based on the number of outstanding shares of Common Stock set
forth in the Company most recent Quarterly Report on Form 10-Q (or, if more
recent, Annual Report on Form 10-K) filed with the SEC to be sold in an offering
pursuant to clause (ii) of this sentence, (i) with respect to an offering by the
Company for its own account (other than a registration statement (A) on Form
S-4, Form S-8 or any successor forms thereto, (B) filed solely in connection
with any employee benefit, dividend reinvestment, or any other similar plan or
(C) for the purpose of effecting a rights offering afforded to all holders of
the Shares), or (ii) with respect to an offering for the account of any of its
security holders, the Company will give each Holder written notice of such
filing at least ten (10) Business Days’ prior to the anticipated filing date
(the “Piggyback Notice”). The Piggyback Notice shall offer the Holders the
opportunity to include in such registration statement the number of Registrable
Securities (for purposes of this Section 2.03, “Registrable Securities” shall be
deemed to mean solely securities of the same type as those proposed to be
offered for the account of the Company or its security holders) as they may
request (a “Piggyback Registration”). Subject to Section 2.03(b), the Company
shall include in each such Piggyback Registration all Registrable Securities
with respect to which the Company has received a written request from the
Holders for inclusion therein within five (5) Business Days after notice has
been given to the Holders. The Company shall be required to maintain the
effectiveness of the Registration Statement for a Piggyback Registration for a
period of at least one hundred twenty (120) days after the effective date
thereof or such shorter period in which all Registrable Securities included in
such Registration Statement have actually been sold.

(b) If any of the securities to be registered pursuant to the Registration
Statement giving rise to the Holders’ rights under this Section 2.03 are to be
sold in an underwritten offering, then each Holder shall be permitted to include
all Registrable Securities requested to be included in such Registration
Statement in such offering on the same terms and conditions as the securities of
the Company or its security holders included therein; provided, however, that if
such offering involves a firm commitment underwritten offering and the managing
underwriter of such underwritten offering advises the Holders in writing that it
is their good faith opinion that the total number or dollar amount of
Registrable Securities proposed to be sold in such offering, together with all
Other Securities that the Company and any other Persons having rights to
participate in such registration intend to include in such offering, exceeds the
total number or dollar amount of such securities that can be sold without having
an adverse effect on the price, timing or distribution of the Registrable
Securities to be so included together with all such Other Securities, then there
shall be included in such firm commitment underwritten offering the number or
dollar amount of Registrable Securities and such Other Securities that in the

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opinion of such managing underwriter can be sold without so adversely affecting
such offering, and such number of Registrable Securities and Other Securities
shall be allocated for inclusion as follows:

(i) first, up to 85% of all shares to be included in the underwritten offering
shall be comprised of Other Securities being sold by the Company or by any
Person (other than the Investor) exercising a contractual right to demand
registration pursuant to which such registration statement was filed;

(ii) second, if such registration statement is filed pursuant to
Section 2.03(a)(i), if elected by the Holders, up to 50% of any remaining shares
not otherwise designated by the Company to be included in such underwritten
offering shall be comprised of the Registrable Securities in such proportions as
such participating Holders inform the Company;

(iii) third, if such registration statement is filed pursuant to
Section 2.03(a)(ii), the Company may include up to 50% of any remaining shares
not otherwise designated by the Person exercising their registration rights; and

(iv) fourth, any remaining amounts, if any, shall be allocable to any Holders of
Registrable Securities or Beneficial Owners of Other Securities on a pro rata
basis, based on the total number of Registrable Securities and Other Securities
requested to be included in such underwritten offering.

(c) The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 2.03 prior to the effectiveness of the
related Registration Statement and shall have no obligation to register any
Registrable Securities in connection with such registration, except to the
extent provided herein. Each Holder shall have the right to withdraw its request
for inclusion of its Registrable Securities in any Piggyback Registration by
giving written notice to the Company of its request to withdraw at least two
(2) Business Days prior to the planned effective date of the related
Registration Statement. The Registration Expenses of any such withdrawn
Piggyback Registration shall be borne by the Company in accordance with
Section 2.04.

(d) In the event that the SEC sets forth a limitation on the number of
securities that may be registered in a particular Piggyback Registration, the
Company may reduce the number of securities to be registered in such Piggyback
Registration to such number of securities as allowed by the SEC.

Section 2.04 Registration Expenses.

(a) Expenses of the Company. Unless otherwise specified herein, in connection
with registrations pursuant to Section 2.01, Section 2.02, or Section 2.03, the
Company shall pay all of the registration expenses incurred in connection with
the registration thereunder (the “Registration Expenses”), including, without
limitation, all: (i) registration and filing fees, (ii) Financial Industry
Regulatory Authority, Inc. fees, (iii) printing, duplicating, word processing,
telephone and facsimile expenses, (iv) fees and disbursements of the Company’s
counsel, (v) blue sky fees and expenses, (vi) fees and expenses of the Company’s
independent accountants in connection with any regular or special reviews or
audits incident to or required by any such registration, (vii) expenses incurred
in connection with making road show presentations and holding meetings with
potential investors, including all travel, meals and lodging, (viii) messenger
and delivery expenses, (ix) all fees and expenses incurred in connection with
listing the Registrable Securities on any securities exchange and (x) the
reasonable fees and disbursements of one firm of attorneys acting as counsel of
the Holders.

(b) Expenses of the Investor. Each Holder shall be responsible for (i) any
allocable underwriting fees, discounts or commissions, (ii) any allocable
commissions of brokers and dealers, (iii) fees and disbursements of counsel for
such Holder other than as provided in Section 2.04(a), and (iv) capital gains,
income and transfer taxes, if any, relating to the sale of Registrable
Securities of the Investor.

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Section 2.05 Registration Procedures.

(a) In connection with the registration of any Registrable Securities pursuant
to this Agreement, the Company will keep each Holder with Registrable Securities
covered by such registration advised in writing as to the initiation of each
such registration and the Company will:

(i) Use commercially reasonable efforts to keep each Registration Statement
continuously effective during the period such Registration Statement is required
to remain effective pursuant to the terms of this Agreement, which Registration
Statement shall comply as to form in all material respects with the requirements
of the applicable form and include or incorporate by reference all financial
statements required by the SEC to be filed therewith or incorporated therein and
upon the occurrence of any event that would cause the Registration Statement or
the Prospectus contained therein (A) to contain a material misstatement or
omission or (B) not to be effective and usable for resale of Registrable
Securities during the period such Registration Statement is required to remain
effective pursuant to the terms of this Agreement, the Company shall file
promptly an appropriate amendment to the Registration Statement, a supplement to
the Prospectus or a report filed with the SEC pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B), the
Company shall use commercially reasonable efforts to cause such amendment to be
declared or deemed effective and the Registration Statement and the related
Prospectus to become usable for their intended purposes as soon as practicable
thereafter.

(ii) Notwithstanding anything to the contrary contained herein, the Company may
delay filing or suspend the effectiveness of a Registration Statement and the
Investor’s right to sell thereunder (each such period, a “Suspension Period”) if
(A) the Company is pursuing a material acquisition, merger, reorganization,
disposition or similar transaction and the Board determines in good faith that
the Company’s ability to pursue or consummate such a transaction would be
materially adversely affected by any required disclosure of such transaction in
the registration statement, or (B) the Company has experienced some other
material non-public event the disclosure of which at such time could reasonably
be expected to materially adversely affect the Company; provided that no
Suspension Period shall exceed ninety (90) consecutive days and all such
Suspension Periods shall not exceed one hundred eighty (180) days in the
aggregate in any twelve (12) month period; provided further that no Suspension
Period may be implemented under this Section 2.05(a)(ii) unless the same or more
onerous restrictions are imposed on all of the Company’s directors and officers
and all other holders of registration rights granted by the Company.

(iii) Prepare and file with the SEC such supplements, amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement effective during the period provided herein and
as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Registration Statement or by the
Securities Act or by any other rules and regulations thereunder for
registrations, and the Company agrees to notify Legal Counsel and the Holders of
Registrable Securities of any such supplement or amendment (other than with
respect to a Piggyback Registration) before it is used or filed with the SEC;
respond as promptly as reasonably possible to any comments received from the SEC
with respect to such Registration Statement, or any amendment, post-effective
amendment or supplement relating thereto; and as promptly as reasonably
possible, upon request, provide the Holders true and complete copies of all
correspondence from and to the SEC relating to such Registration Statement; and
comply in all material respects with the provisions of the Securities Act, the
Exchange Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all Registrable Securities covered by such
Registration Statement in accordance with the intended method or methods of
distribution by the selling Holders thereof.

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(iv) Advise each Holder and Legal Counsel promptly (which notice pursuant to
clauses (B) through (D) below shall be accompanied by an instruction to suspend
the use of the Prospectus until the Company shall have remedied the basis for
such suspension and shall include the steps the Company intends to remedy such
basis and the Company shall promptly thereafter notify the Holder of such
remediation):

(A) when the Prospectus or any Prospectus supplement or post-effective amendment
is proposed to be or has been filed, and, with respect to the Registration
Statement or any post-effective amendment thereto, when the same has become
effective;

(B) of any request by the SEC or any other Governmental Authority received by
the Company for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating thereto;

(C) of the issuance by the SEC of any stop order received by the Company
suspending the effectiveness of the Registration Statement under the Securities
Act or of the suspension by any state securities commission of the qualification
of the Registrable Securities for offering or sale in any jurisdiction, or the
threatening or initiation of any proceeding for any of the preceding purposes;

(D) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose; or

(E) of the existence of any fact or the happening of any event, during the
pendency of a distribution of Registrable Securities pursuant to a Registration
Statement, that makes any statement of a material fact made in such Registration
Statement, the Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of any
additions to or changes in the Registration Statement or the Prospectus in order
to make the statements therein not misleading; provided, however, the Company
shall not be required to disclose confidential information to any Holders or
their Legal Counsel (i) unless and until a mutually acceptable confidentiality
agreement is in place with the Holders, and/or (ii) if such information is
subject to attorney-client privilege, if such disclosure would result in loss of
attorney-client privilege, unless such Holders sign a reasonable joint defense
agreement.

(v) Unless any Registrable Securities shall be in book-entry form only,
cooperate with the Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends, and enable such Registrable Securities to be in such
denominations and registered in such names as the Holder may request at least
two (2) Business Days before any sale of Registrable Securities.

(vi) Use commercially reasonable efforts to promptly register or qualify any
Registrable Securities under such other securities or blue sky laws of such
jurisdictions within the United States as the Holder reasonably requests and
which may be reasonably necessary or advisable to enable the Holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by the Holder, keep such registrations or qualifications in effect for so
long as the applicable Registration Statement is required to remain in effect
and do any and all other acts and things which may be reasonably necessary or
advisable to enable the Holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by the Holder provided,
however, that the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Agreement, (B) subject itself to taxation in any jurisdiction where
it would not otherwise be subject to taxation but for this Agreement or
(C) consent to general service of process in any jurisdiction where it would not
otherwise be subject to such service but for this Agreement.

(vii) Use commercially reasonable efforts to promptly cause any Registrable
Securities covered by a Registration Statement to be registered with or approved
by such other Governmental Authority

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within the United States as may be necessary to enable the Holder to consummate
the disposition of such Registrable Securities in accordance with the intended
methods of disposition set forth in such Registration Statement.

(viii) Use commercially reasonable efforts either to (A) cause all of the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, or (B) secure the inclusion for quotation of all of
the Registrable Securities on an Eligible Market and, without limiting the
generality of the foregoing, to use commercially reasonable efforts to arrange
for at least two market makers to register with FINRA as such with respect to
such Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 2.05(a)(viii).

(ix) In the event that a Holder advises the Company that the Holder intends to
distribute any Registrable Securities by means of an underwritten offering,
whether pursuant to Section 2.01 or Section 2.02, enter into an underwriting
agreement in form, scope and substance (including customary representations,
warranties, covenants and indemnifications) acceptable to the Company in its
discretion, to be exercised in good faith, and take all such other actions
reasonably requested by the Holder or by the managing underwriter, if any, to
expedite or facilitate the underwritten disposition of such Registrable
Securities and deliver such documents and certificates as may be reasonably
requested by the Holder, its counsel and the managing underwriter, if any.

(x) Use commercially reasonable efforts to prevent, or obtain the withdrawal of,
any stop order or other order suspending the use of any Prospectus.

(xi) Deliver to the Holder and each underwriter, if any, without charge, as many
copies of the applicable Prospectus and any amendment or supplement thereto as
the Holder or underwriter may reasonably request.

(xii) Cooperate with the Holder and the underwriters, if any, of such
Registrable Securities and their respective counsel in connection with any
filings required by Law to be made with FINRA.

(xiii) Obtain opinions of counsel to the Company and updates thereof addressed
to the Holders and the underwriters or initial purchasers, if any, covering
matters as are customarily requested in opinions covering secondary resale
offerings of securities.

(xiv) Obtain “comfort” letters and updates thereof from the Company’s
independent certified public accountants, such letters covering matters as are
customarily requested in comfort letters covering secondary resale offerings of
securities.

(xv) Make available for inspection by each Holder, the underwriters, if any, and
any attorney, accountant or other agent retained by a Holder or the
underwriters, all financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company’s officers, directors,
employees and independent accountants to supply all information reasonably
requested by a Holder or any such underwriter, attorney, accountant or agent in
connection with such registration statement, provided that any of the foregoing
parties shall enter into a mutually acceptable confidentiality agreement if
reasonably requested by the Company.

(xvi) In the case of a Company Supported Distribution, as requested by the
managing underwriter in any such underwritten offering, provide reasonable
assistance with the marketing of any such offering, including causing members of
the Company’s management team to participate in a customary number of “road
show” presentations, conference calls, investor meetings and due diligence
sessions, in each case and, to the extent to be in-person, to take place in the
continental United States. Notwithstanding the foregoing, the Holders explicitly
agree that the Company shall not be required to (A) undertake more than two
(2) Company Supported Distributions pursuant to this Agreement, (B) unless
otherwise agreed upon in writing in advance, cause members of the Company’s
management team to spend more than three (3) Business Days participating in
“road show” presentations with respect to any Company Supported Distribution, or
(C) participate in more than one Company

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Supported Distribution during any twelve (12) month period during this
Agreement. Notwithstanding the foregoing, if at least 5,000,000 Preferred Shares
(as adjusted for splits, dividends, reclassifications and the like) convert into
the applicable number of Conversion Shares then the number of Company Supported
Distributions that the Company may be obligated to undertake shall increase to
three (3) and if at least 10,000,000 Preferred Shares (as adjusted for splits,
dividends, reclassifications and the like) convert into the applicable number of
Conversion Shares then the number of Company Supported Distributions that the
Company may be obligated to undertake shall increase to four (4).

(b) The Holders agree by acquisition of a Registrable Security that such Holder
shall not be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement, or to receive a Prospectus relating thereto, unless the
Holder has furnished the Company with the information set forth in the next
sentence at least three (3) Business Days prior to the filing of the applicable
Registration Statement or Prospectus. The Company may require the Holders whose
Registrable Securities are included in a Registration Statement to furnish to
the Company such customary information regarding the Holders and the
distribution of such Shares as the Company may reasonably require for inclusion
in such Registration Statement. The Holders agree promptly to furnish to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by the Holders not misleading.
The Company may exclude from such Registration Statement the Registrable
Securities of any Holder if such Holder fails to furnish such information within
four (4) Business Days after delivering such request. The Company shall not
include in any Registration Statement any information regarding, relating to or
referring to the Holders or its plan of distribution without the approval of the
Holders in writing; provided, that no such approval shall be required for
information previously provided to the Company as part of a selling stockholder
questionnaire in connection with such Registration Statement. Notwithstanding
any other provision of this Agreement, the Holders shall also provide the
Company as a condition to including Registrable Securities in a Registration
Statement, such information as is reasonably requested by the Company in
response to the Company’s customary selling stockholder questionnaire seeking
the information required by the Securities Act and the rules and regulations
promulgated thereunder.

(c) For any underwritten offering of securities pursuant to Section 2.01 or
Section 2.02 of this Agreement, the Holders and the Company shall mutually agree
in writing on the managing book-running underwriters prior to the time that
either the Holders or the Company contacts any underwriters. The Holders
expressly agree that the Company, in its sole discretion, may determine and
select joint-lead managers (other than a book-running underwriter), co-managers,
or syndicate members and determine the relative economic splits of any
underwriting discounts between all underwriters; provided, however, the Holders
shall have the right to approve the aggregate underwriting discount to be paid
to all underwriters collectively.

(d) The Company shall (A) permit outside legal counsel for the Holders (“Legal
Counsel”) to review and comment upon (i) a Registration Statement at least five
(5) Business Days prior to its filing with the SEC and (ii) all amendments and
supplements to all Registration Statements (except for Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any
similar or successor reports) within a reasonable number of days prior to their
filing with the SEC, and (B) not file any Registration Statement (other than
with respect to a Piggyback Registration) or amendment or supplement thereto in
a form to which Legal Counsel reasonably objects. The Company shall not submit a
request for acceleration of the effectiveness of a Registration Statement (other
than with respect to a Piggyback Registration) or any amendment or supplement
thereto without the prior approval of Legal Counsel, which consent shall not be
unreasonably withheld or delayed beyond three (3) Business Days. The Company
shall furnish to Legal Counsel, without charge, (i) copies of any correspondence
from and to the SEC or the staff of the SEC relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by Legal Counsel, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto. The
Company shall reasonably cooperate with Legal Counsel in performing the
Company’s obligations pursuant to this Section 2.05.

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Section 2.06 Indemnification.

(a) The Company shall indemnify and hold harmless, to the fullest extent
permitted by Law, (1) each Holder if the any of the Holder’s Registrable
Securities are covered by a Registration Statement or Prospectus, (2) each of
the Holders’ Affiliates, officers, directors, shareholders, employees, advisors,
agents, (3) each underwriter (including the Holders if deemed to be an
underwriter pursuant to any SEC comments or policies), if any, and (4) each
Person who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) such underwriter (collectively, “Holder
Indemnitees”), from and against all losses, claims, damages, liabilities,
penalties, judgments, suits, costs and expenses (including reasonable legal fees
and disbursements, which shall be reimbursed periodically as incurred)
(collectively, “Losses”) in connection with any sale of Registrable Securities
pursuant to a Registration Statement under this Agreement arising out of or
based upon (i) any untrue or alleged untrue statement of a material fact
contained in any such Registration Statement or any Prospectus (including
preliminary or final) relating to the registration of such Registrable
Securities or any amendment or supplement thereto or any document incorporated
by reference therein or any omission or (ii) or any alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, and will reimburse to each of the Persons listed above, for any
reasonable legal or any other expenses actually suffered or incurred and paid in
connection with investigating and defending any such Losses; provided, however,
that the Company shall not be liable to such Holder Indemnitee in any such case
to the extent that any such Loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in such Registration Statement, including any such
preliminary or final Prospectus contained therein or any such amendments or
supplements thereto, or contained in any free writing prospectus (as such term
is defined in Rule 405 under the Securities Act) prepared by the Company or
authorized by it in writing for use by such Holder Indemnitee (or any amendment
or supplement thereto), in reliance upon and in conformity with information
regarding such Holder Indemnitee or its plan of distribution or ownership
interests which was furnished in writing to the Company expressly for use in
connection with such Registration Statement, including any such preliminary or
final Prospectus contained therein or any such amendments or supplements
thereto.

(b) In connection with any Registration Statement in which a Holder is
participating by registering Registrable Securities, such Holder agrees to
indemnify and hold harmless, to the fullest extent permitted by Law, the
Company, its Affiliates, the officers, directors, shareholders, advisors,
agents, representatives or other employees of the Company, each Person who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) the Company, each underwriter, if any, and each Person who
controls (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) such underwriter (collectively, “Company Indemnitees”),
from and against all Losses, as incurred, arising out of or based on any untrue
or alleged untrue statement of a material fact contained in any such
Registration Statement or preliminary or final Prospectus relating to the
registration of such Registrable Securities or any amendment or supplement
thereto or any document incorporated by reference therein, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, in each case solely to the extent that
such untrue or alleged untrue statement or omission or alleged omission is made
in such Registration Statement or in any preliminary or final Prospectus
contained therein or any such amendments or supplements thereto or contained in
any free writing prospectus (as such term is defined in Rule 405 under the
Securities Act) in reliance upon and in conformity with written information
furnished to the Company by the Holder expressly for inclusion in such document;
provided, however, that in no event shall the liability of the Holder hereunder
be greater in amount than the dollar amount of the net proceeds received by the
Holder upon the sale of the Registrable Securities under the Registration
Statement giving rise to such indemnification obligation.

(c) If any Person shall be entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall give prompt notice to the party from which
such indemnity is sought (the “Indemnifying Party”) of any claim or of the
commencement of any Action with respect to which such Indemnified Party has
actual notice

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and seeks indemnification or contribution pursuant hereto; provided, however,
that the delay or failure to so notify the Indemnifying Party shall not relieve
the Indemnifying Party from any obligation or liability except to the extent
that the Indemnifying Party has been actually prejudiced by such delay or
failure. The Indemnifying Party shall have the right, exercisable by giving
written notice (including an acknowledgement of its obligation to indemnify the
Indemnified Party therefor on the terms set forth herein) to an Indemnified
Party promptly after the receipt of written notice from such Indemnified Party
of such claim or Action, to assume, at the Indemnifying Party’s expense, the
defense of any such Action, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that an Indemnified Party shall have the
right to employ separate counsel in any such Action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless: (i) the Indemnifying Party agrees to
pay such fees and expenses; (ii) the Indemnifying Party fails promptly to
assume, or in the event of a conflict of interest cannot assume, the defense of
such Action or fails to employ counsel reasonably satisfactory to such
Indemnified Party, in which case the Indemnified Party shall also have the right
to employ counsel and to assume the defense of such Action or (iii) in the
Indemnified Party’s reasonable judgment a conflict of interest between such
Indemnified Party and Indemnifying Party may exist in respect of such Action;
provided, further, that the Indemnifying Party shall not, in connection with any
one such Action or separate but substantially similar or related Actions in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one firm of attorneys (together
with appropriate local counsel) at any time for all of the Indemnified Parties,
or for fees and expenses that are not reasonable.

(d) Neither party shall settle, compromise, discharge or consent to an entry of
judgment with respect to a claim or liability subject to indemnification under
this Section 2.06 without the other party’s prior written consent (which consent
shall not be unreasonably withheld, conditioned or delayed); provided that the
Indemnifying Party may agree without the prior written consent of the
Indemnified Party solely to any settlement, compromise, discharge or consent to
an entry of judgment, in each case that relates only to money damages and by its
terms obligates the Indemnifying Party to pay the full amount of the liability
in connection with such claim and which unconditionally releases the Indemnified
Party from all liability or obligation in connection with such claim.

(e) If the indemnification provided for in this Section 2.06 is unavailable to
hold harmless each of the Indemnified Parties against any Losses, claims,
damages, liabilities and expenses to which such parties may become subject under
the Securities Act, then the Indemnifying Party shall, in lieu of indemnifying
each party entitled to indemnification hereunder, contribute to the amount paid
or payable by such party as a result of such Losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party, on the one hand, and such Indemnified
Parties, on the other hand, in connection with the statements or omissions or
alleged statements or omissions that resulted in such Losses, claims, damages,
liabilities or expenses; provided, that the liability of the Indemnifying Party
shall not exceed the applicable limitations set forth in Section 2.06(a) or
Section 2.06(b), respectively. The relative fault of such parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact, or omission or alleged omission to state a
material fact, relates to information supplied by or concerning the Indemnifying
Party on the one hand, or by such Indemnified Party on the other, and such
party’s relative intent, knowledge, access to information and opportunity to
have corrected or prevented such statement or omission.

Section 2.07 Notice. Each time a Registration Statement is declared effective,
notify each such Holder as promptly as practicable, and in any event no later
than the next Business Day, when such Registration Statement has become
effective and take such other actions as are reasonably necessary to permit
sales of the Registrable Securities, including providing each Holder a
reasonable number of copies of the Prospectus which is a part of such
Registration Statement as requested by such Holder in writing.

Section 2.08 Miscellaneous.

(a) Subject to the provisions hereof, in the event that the Company is actively
engaged in a process to launch an underwritten public offering, to the extent
required by the managing underwriters, and provided that the Company

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and all executive officers (as defined under the Exchange Act) and directors of
the Company are also so bound, the Holders agree to enter into a customary
agreement with the managing underwriters not to effect any sale or distribution
of equity securities of the Company, or any securities convertible, exchangeable
or exercisable for or into such securities, without the consent of the managing
underwriters, for a period not to exceed ten (10) days prior to the date such
offering is commenced and ending no later the later of (i) than one hundred
twenty (120) days following the effective date of the registration statement in
connection with such offering or (ii) such other longer period as may be
requested by the underwriters in connections with such offering, except pursuant
to such offering in accordance with the terms hereof; provided, however, that if
any executive officer or director is released by such managing underwriters from
its lockup obligations herein, then each Holder shall be so released on a pro
rata basis (with the percentage of the Holder’s Registrable Securities so
released being equal to the percentage of shares so released for the executive
officer or director having the highest percentage of released shares among all
of the executive officers or directors). The Company may impose stop-transfer
restrictions with respect to the securities subject to the foregoing restriction
until the end of the required stand-off period and shall lift such stop-transfer
restrictions immediately upon the end of such period. Notwithstanding the
foregoing, no Holder shall be bound by such lockup more than twice during any
12-month period. This Section 2.08(a) shall terminate and be of no further force
or effect, upon the date when the Holders collectively cease to Beneficially Own
at least ten percent (10%) of the then outstanding Common Stock.

(b) The registration rights granted to the Investor and the other Holders under
this Agreement shall terminate on the date on which the Investor and such other
Holders no longer own any Registrable Securities.

(c) If the Company becomes ineligible to use the registration form on which a
Registration Statement is filed and declared effective, thereby precluding any
Holder from using the related Prospectus, the Company shall use its commercially
reasonable efforts to prepare and file either a post-effective amendment to the
Registration Statement to convert such registration statement to, or a new
Registration Statement on, another registration form which the Company is
eligible to use within thirty (30) days or such longer period required by the
rules and regulations of the SEC after the date that the Company becomes
ineligible or such other timeframe determined in good faith by the Company in
consultation with its securities counsel as may be required by the facts and
circumstances giving rise to the need to for such activity. In the event that
Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of the
Registrable Securities on Form S-1 or another appropriate form reasonably
acceptable to the Holders and (ii) undertake to register the Registrable
Securities on Form S-3 as soon as such form is available, provided that the
Company shall maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the SEC.

(d) Except for the Existing Registration Rights Agreements, the Company has
taken prior to the date hereof, the Investor and the other Holders’ rights under
this Article 2 are senior or pari passu in priority and preference to any
registration rights granted to any other holder or prospective holder of any
securities of the Company with respect to such securities. From and after the
date hereof, the Company shall not, without the prior written consent of the
Holders, enter into any agreement granting any other holder or prospective
holder of any securities of the Company registration rights with respect to such
securities unless such new registration rights, including with respect to
underwriters’ “cutbacks” and “standoff” obligations, do not conflict with, the
registration rights granted to Investor and the other Holders hereunder.

(e) If a Holder is required under applicable securities Laws to be described in
a Registration Statement as an underwriter or the Holder believes that it could
reasonably be deemed to be an underwriter of Registrable Securities, at the
request of the Holder, the Company shall furnish to the Holder, on the date of
the effectiveness of such Registration Statement and thereafter from time to
time on such dates as the Holder may reasonably request (i) a letter, dated such
date, from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the Investor, and
(ii) an opinion, dated as of such date, of counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the Holder.

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(f) If a Holder is required under applicable securities Laws to be described in
a Registration Statement as an underwriter or a Holder believes that it could
reasonably be deemed to be an underwriter of Registrable Securities, the Company
shall make available for inspection by (i) the Holder, (ii) Legal Counsel and
(iii) one firm of accountants or other agents retained by the Holder, all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company, as shall be reasonably deemed necessary by any such
party set forth in clauses (i)-(iii), and cause the Company’s officers,
directors and employees to supply all information which any Holder or their
Legal Counsel may reasonably request; provided, however, the Company shall be
under no obligation to share any confidential information to any Holders or
their Legal Counsel (i) unless and until a mutually acceptable confidentiality
agreement is in place with the Holders, and/or (ii) if such information is
subject to attorney-client privilege, if such disclosure would result in loss of
attorney-client privilege, unless such Holders sign a reasonable joint defense
agreement.

(g) Neither the Company nor any Affiliate thereof shall identify any Holder as
an “ underwriter” in any public disclosure or filing with the SEC or any
Eligible Market without the prior written consent of such Holder (it being
understood, that if the Company is required to name the Holder as an “
underwriter” in such Registration Statement by the SEC (after a good faith
discussion with the SEC to lift such requirement, including, without limitation,
any reduction in the number of Registrable Securities of the Holder to be
registered on such Registration Statement (to the extent necessary to lift such
requirement)), the Holder shall have the option of electing to exclude all such
Registrable Securities from such Registration Statement or to be named as an “
underwriter” in such Registration Statement); provided, however, that the
foregoing shall not prohibit the Company from including the disclosure found in
the “ Plan of Distribution” section attached hereto as Exhibit A in the
Registration Statement.

ARTICLE 3

OTHER COVENANTS

Section 3.01 Reports Under the Exchange Act. With a view to making available to
Investor and the other Holders the benefits of certain rules and regulations of
the SEC which may at any time permit the sale of the Registrable Securities to
the public without registration, the Company agrees, so long as there are
outstanding Registrable Securities, to use commercially reasonable efforts to:

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

(b) file with the SEC in a timely manner all reports and other documents as the
SEC may prescribe under Section 13(a) or 15(d) of the Exchange Act at any time
while the Company is subject to such reporting requirements of the Exchange Act
and the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and

(c) furnish to each Holder so long as such Holder owns Registrable Securities,
promptly upon request, (i) a written statement by the Company, if true, that it
has complied with the reporting requirements of Rule 144, the Securities Act and
the Exchange Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration.

Section 3.02 Confidentiality. The Company shall hold in confidence and not make
any disclosure of information concerning the Holders provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the disclosure of such information is necessary to
avoid or correct a misstatement or omission in any Registration Statement,
(iii) the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon

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learning that disclosure of such information concerning the Holder is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to the Holder and allow the Holder, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.

ARTICLE 4

TERMINATION

Section 4.01 Termination. Other than the termination provisions applicable to
particular Sections of this Agreement that are specifically provided elsewhere
in this Agreement, this Agreement shall terminate (a) at any time upon the
mutual written agreement of the Company and the Holders holding a majority in
interest of the Shares (on an as converted basis) and (b) as to any particular
Holder, at such time as the Holder ceases to Beneficially Own any Shares.

ARTICLE 5

MISCELLANEOUS

Section 5.01 Amendment and Modification. This Agreement (including all exhibits
hereto) may be amended, restated, supplemented or otherwise modified, and any
provision hereof may be waived, only by written agreement making specific
reference to this Agreement or the applicable provision to be waived, in each
case duly executed by the Company and Holders holding a majority in interest of
the Shares (on an as converted basis).

Section 5.02 Titles and Subtitles; Interpretation. Unless otherwise indicated
herein, with respect to any reference made in this Agreement to a Section (or
Article, Subsection, Paragraph, Subparagraph or Clause), such reference shall be
to a section (or article, subsection, paragraph, subparagraph or clause) of, or
an exhibit or schedule to, this Agreement. The table of contents and any
article, section, subsection, paragraph or subparagraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any reference made in this
Agreement to a statute or statutory provision shall mean such statute or
statutory provision as it has been amended through the date as of which the
particular portion of the Agreement is to take effect, or to any successor
statute or statutory provision relating to the same subject as the statutory
provision so referred to in this Agreement, and to any then applicable rules or
regulations promulgated thereunder. Whenever the words “ include,” “ includes”
or “ including” are used in this Agreement, they shall be deemed, as the context
indicates, to be followed by the words “ but (is/are) not limited to.” The words
“ herein,” “ hereof,” “ hereunder” and words of like import shall refer to this
Agreement as a whole, unless the context clearly indicates to the contrary.
Words used herein, regardless of the number and gender specifically used, shall
be deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine or neuter, as the context indicates is
appropriate. Where specific language is used to clarify or illustrate by example
a general statement contained herein, such specific language shall not be deemed
to modify, limit or restrict the construction of the general statement which is
being clarified or illustrated.

Section 5.03 Waiver. No failure on the part of a party to this Agreement to
exercise, and no delay in exercising, any right, power or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of such right, power or remedy by such party to this Agreement preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy. Any such agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in a written instrument signed by such
party.

Section 5.04 Binding Nature; Assignment. This Agreement will be binding upon and
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto. Neither party to this Agreement may
assign (whether by operation of Law or otherwise) this Agreement or any rights,
interests or

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

obligations provided by this Agreement without prior written consent of the
other party; provided, however, that Investor may Transfer any or all of the
Shares and assign this Agreement and any or all rights, interests or obligations
hereunder to GE or to any GE Subsidiary and GE and any such GE Subsidiary may
further assign this Agreement and any or all its rights, interests or
obligations hereunder to any other GE Subsidiary or to GE so long as any such
Transfer does not contravene the restrictions on transfer included in the
Investor Rights Agreement. For the sake of clarity, each transferee as permitted
in the previous sentence shall be deemed to be a “ Holder” for purposes of this
Agreement. Any attempted assignment or Transfer in violation of this
Section 5.04 or the Investor Rights Agreement shall be void ab initio.

Section 5.05 Severability. If any term or provision of this Agreement is held
invalid, illegal or unenforceable in any respect under any applicable Law or as
a matter of public policy, the validity, legality and enforceability of all
other terms and provisions of this Agreement will not in any way be affected or
impaired. If the final judgment of a court of competent jurisdiction or other
Government Authority declares that any term or provision hereof is invalid,
illegal or unenforceable, the parties to this Agreement agree that the court
making such determination will have the power to reduce the scope, duration,
area or applicability of the term or provision, to delete specific words or
phrases, or to replace any invalid, illegal or unenforceable term or provision
with a term or provision that is valid, legal and enforceable and that comes
closest to expressing the intention of the invalid, illegal or unenforceable
term or provision.

Section 5.06 Notices and Addresses. All notices and other communications under
or by reason of this Agreement shall be in writing and shall be deemed to have
been duly given or made (a) when personally delivered, (b) when delivered by
facsimile or email transmission with receipt confirmed (followed by delivery of
an original by another delivery method provided for in this Section 5.06), or
(c) one (1) Business Day after deposit with overnight courier service, in each
case to the addresses and attention parties indicated below (or such other
address, facsimile number,’ e-mail address or attention party as the recipient
party has specified by prior notice given to the sending party in accordance
with this Section 5.04):

(a) if to the Investor and the other Holders to:

GE Medical Holding AB

Björkgatan 30

75184 Uppsala, Sweden

  Attention: Legal Administrator

  Facsimile: (+46) 186121810

GE Healthcare Life Sciences

350 Campus Drive

Marlborough, Massachusetts 01752-3082

  Attention: General Counsel

  Facsimile: +1 609 228 6148

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

GE Medical Holding AB

c/o GE Healthcare Limited

Pollards Wood

Nightingales Lane

Chalfont St Giles

Buckinghamshire HP8 4SP

United Kingdom

  Attention: Executive Counsel, M&A

  Facsimile: +44 1494 545 275

and

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Paul Hastings LLP

71 South Wacker Drive, Suite 4500

Chicago, IL 60606

  Attention: Thaddeus J. Malik

       Richard S. Radnay

  Facsimile: (312) 499-6100

  E-mail: thaddeusmalik@paulhastings.com

       richardradnay@paulhastings.com

and

Paul Hastings LLP

695 Town Center Drive, Seventeenth Floor

Costa Mesa, CA 92926

  Attention: Stephen D. Cooke

  Facsimile: (714) 668-6364

  E-mail: stephencooke@paulhastings.com

(b) if to the Company:

NeoGenomics, Inc.

12701 Commonwealth Drive, Suite 9

Fort Myers, FL 33913

  Attention: Douglas M. VanOort, CEO

  Facsimile: (239) 768-0600

  E-mail: dvanoort@neogenomics.com

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

K&L Gates LLP

200 South Biscayne Boulevard

Suite 3900

Miami, Florida 33131

  Attention: Clayton E. Parker, Esq.

  Facsimile: (305) 358-7095

  E-mail: clayton.parker@klgates.com

Section 5.07 Governing Law. Subject to Section 5.05, this Agreement, and any
Action arising out of or relating in any way to this Agreement, whether in
contract, tort, common law, statutory law, equity, or otherwise, including any
question regarding its existence, validity, or scope (each, a “Transaction
Dispute”), shall be governed by, construed and enforced in accordance with the
Laws of the State of New York without giving effect to any choice of law rules
that would cause the application of Laws of any jurisdiction other than those of
the State of New York. Investor will cause the Holder Indemnitees, and the
Company will cause the Company Indemnitees, to comply with the foregoing as
though such Indemnified Parties were a party to this Agreement.

Section 5.08 Complete Agreement. This Agreement (including the exhibits hereto)
and the documents referred to herein collectively constitute and contain the
entire agreement and understanding of the parties with respect to the subject
matter hereof and thereof and supersede any prior negotiations, correspondence,
understandings and contracts by or between the parties respecting the subject
matter hereof and thereof.

Section 5.09 No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their respective successors and permitted
assigns, and, and, except with respect to the Holder Indemnitees and the Company
Indemnitees pursuant to Section 2.06, and any Holder, nothing in this Agreement
shall create or be deemed to create any third party beneficiary rights in any
Person not a party to this Agreement, including any Affiliates of any party
hereto.

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Section 5.10 Counterparts and Signatures. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. Facsimiles,
e-mail transmission of .pdf signatures or other electronic copies of signatures
shall be deemed to be originals.

Section 5.11 Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.

Section 5.12 Specific Performance.

(a) Except to the extent set forth otherwise in this Agreement, all remedies
under this Agreement expressly conferred upon a party hereto will be deemed
cumulative with and not exclusive of any other remedy conferred hereby, or by
Law or equity upon such party, and the exercise by a party hereto of any one
remedy will not preclude the exercise of any other remedy.

(b) Each party hereto agrees that irreparable damage would occur and the parties
hereto would not have an adequate remedy at Law if any provision of this
Agreement is not performed in accordance with its specific terms or is otherwise
breached. Accordingly, each party hereto agrees that the other parties hereto
will be entitled to injunctive relief from time to time to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions of this Agreement without the requirement of posting any bond or
other indemnity, in addition to any other remedy to which it may be entitled, at
Law or in equity, and each party hereto agrees not to raise any objections to
the availability of the equitable remedy of specific performance to prevent or
restrain breaches of this Agreement, and to specifically enforce the terms of
this Agreement to prevent breaches or threatened breaches of, or to enforce
compliance with, the covenants and obligations of such party under this
Agreement.

Section 5.13 Dispute Resolution; Consent to Jurisdiction.

(a) Any Transaction Dispute will exclusively be brought and resolved in the U.S.
District Court for the Southern District of New York (where federal jurisdiction
exists) or the Commercial Division of the Courts of the State of New York
sitting in the County of New York (where federal jurisdiction does not exist),
and the appellate courts having jurisdiction of appeals in such courts. In that
context, and without limiting the generality of the foregoing, each party
irrevocably and unconditionally:

(i) submits for itself and its property to the exclusive jurisdiction of such
courts with respect to any Transaction Dispute and for recognition and
enforcement of any judgment in respect thereof, and agrees that all claims in
respect of any Transaction Dispute shall be heard and determined in such courts;

(ii) agrees that venue would be proper in such courts, and waives any objection
that it may now or hereafter have that any such court is an improper or
inconvenient forum for the resolution of any Transaction Dispute; and

(iii) agrees that the mailing by certified or registered mail, return receipt
requested, to the Persons listed in Section 5.06 of any process required by any
such court, will be effective service of process; provided, however, that
nothing herein will be deemed to prevent a party from making service of process
by any means authorized by the Laws of the State of New York.

(b) The foregoing consent to jurisdiction will not constitute submission to
jurisdiction or general consent to service of process in the State of New York
for any purpose except with respect to any Transaction Dispute.

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Section 5.14 Waiver of Jury Trial. To the maximum extent permitted by Law, each
party irrevocably and unconditionally waives any right to trial by jury in any
forum in respect of any Transaction Dispute and covenants that neither it nor
any of its Affiliates or representatives will assert (whether as plaintiff,
defendant or otherwise) any right to such trial by jury. Each party certifies
and acknowledges that (a) such party has considered the implications of this
waiver, (b) such party makes this waiver voluntarily and (c) such waiver
constitutes a material inducement upon which such party is relying in entering
into the Agreement. Each party may file an original counterpart or a copy of
this Section 5.14 with any court as written evidence of the consent of each
party to the waiver of its right to trial by jury.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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(Signature page to Investors Rights Agreement)

IN WITNESS WHEREOF, the parties hereto caused this Agreement to be duly executed
by their respective authorized officers on the day and year first above written.

 

NeoGenomics, Inc. By:      

 

  Name:   Title:

GE Medical Holding AB

By:      

 

  Name:   Title:

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Exhibit A

PLAN OF DISTRIBUTION

We are registering shares of common stock and shares of common stock issuable
upon exercise of the Series A Preferred Stock to permit the resale of these
shares of common stock and any shares of common stock received upon conversion
of the Series A Preferred Stock by the holders of such shares of common stock
and the holders of the shares of the Series A Preferred Stock from time to time
after the date of this prospectus. We will not receive any of the proceeds from
the sale by the selling shareholder of the shares of common stock. We will bear
all fees and expenses incident to our obligation to register the shares of
common stock.

The selling shareholder may sell all or a portion of the shares of common stock
beneficially owned by it and offered hereby from time to time directly to
purchasers or through one or more underwriters, broker-dealers or agents, or
through any combination of these methods. If the shares of common stock are sold
through underwriters or broker-dealers, the selling shareholder will be
responsible for underwriting discounts or commissions or agent’s commissions.
The shares of common stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale, or at negotiated prices. These sales may be
effected in transactions, which may involve crosses or block transactions,

 

  •   on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;

 

  •   in the over-the-counter market;

 

  •   in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

 

  •   through the writing of options, whether such options are listed on an
options exchange or otherwise;

 

  •   an underwritten offering;

 

  •   ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

 

  •   block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

  •   purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

 

  •   an exchange distribution in accordance with the rules of the applicable
exchange;

 

  •   privately negotiated transactions;

 

  •   short sales;

 

  •   sales pursuant to Rule 144;

 

  •   broker-dealers may agree with the selling securityholders to sell a
specified number of such shares at a stipulated price per share;

 

  •   a combination of any such methods of sale; and

 

  •   any other method permitted pursuant to applicable law.

If the selling shareholder effects such transactions by selling shares of common
stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling shareholder or commissions from
purchasers of the shares of common stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of common stock or otherwise, the selling shareholder may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they
assume. The selling shareholder may also sell shares of common stock short and
deliver shares of common stock covered by

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this prospectus to close out short positions and to return borrowed shares in
connection with such short sales. The selling shareholder may also loan or
pledge shares of common stock to broker-dealers that in turn may sell such
shares.

The selling shareholder may pledge or grant a security interest in some or all
of the shares of Series A Preferred Stock or shares of common stock owned by
them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time pursuant to this prospectus or any amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act of
1933, as amended, amending, if necessary, the list of selling shareholders to
include the pledgee, transferee or other successors in interest as a selling
shareholder under this prospectus. The selling shareholder also may transfer and
donate the shares of common stock in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the
selling beneficial owners for purposes of this prospectus.

The selling shareholder and any broker-dealer participating in the distribution
of the shares of common stock may be deemed to be “underwriters” within the
meaning of the Securities Act, and any commission paid, or any discounts or
concessions allowed to, any such broker-dealer may be deemed to be underwriting
commissions or discounts under the Securities Act. At the time a particular
offering of the shares of common stock is made, a prospectus supplement, if
required, will be distributed which will set forth the aggregate amount of
shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling shareholders and any
discounts, commissions or concessions allowed or reallowed or paid to
broker-dealers.

Under the securities laws of some states, the shares of common stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of common stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

There can be no assurance that the selling shareholder will sell any or all of
the shares of common stock registered pursuant to the registration statement, of
which this prospectus forms a part.

The selling shareholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, Regulation M of the Exchange Act, which may limit the timing of
purchases and sales of any of the shares of common stock by the selling
shareholder and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of common
stock to engage in market-making activities with respect to the shares of common
stock. All of the foregoing may affect the marketability of the shares of common
stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.

We will pay all expenses of the registration of the shares of common stock
pursuant to the registration rights agreement, estimated to be $[        ] in
total, including, without limitation, Securities and Exchange Commission filing
fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, that the selling shareholder will pay all underwriting
discounts and selling commissions, if any. We will indemnify the selling
shareholder against liabilities, including some liabilities under the Securities
Act, in accordance with the registration rights agreement, or the selling
shareholder will be entitled to contribution. We may be indemnified by the
selling shareholder against civil liabilities, including liabilities under the
Securities Act, that may arise from any written information furnished to us by
the selling shareholder specifically for use in this prospectus, in accordance
with the related registration rights agreement, or we may be entitled to
contribution.

Once sold under the registration statement, of which this prospectus forms a
part, the shares of common stock will be freely tradable in the hands of persons
other than our affiliates.

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Exhibit J

CERTIFICATE OF DESIGNATIONS

OF

SERIES A CONVERTIBLE PREFERRED STOCK

(Par Value $0.001)

OF

NEOGENOMICS, INC.

The undersigned, a duly authorized officer of Neogenomics, Inc., a corporation
organized and existing under the laws of the State of Nevada (the “Company”), in
accordance with the Company’s Articles of Incorporation (the “Articles”) and the
provisions of Sections 78.195 and 78.1955 of the Nevada Revised Statutes (the
“NRS”), does hereby certify that the following resolution was duly approved and
adopted by the Board of Directors of the Company (the “Board”) by unanimous
written consent of the Board pursuant to Section 78.315 of the NRS, on
[                    ], 2015:

WHEREAS, on                     , the stockholders of the Company approved an
amendment and restatement to the Articles, which among other things, increased
(i) the number of shares of common stock, par value $0.001 per share (the
“Common Stock”) authorized for issuance from One Hundred Million
(100,000,000) to Two Hundred Fifty Million (250,000,000); and (ii) the number of
shares of preferred stock, par value $0.001 per share (the “Preferred Stock”)
authorized for issuance from Ten Million (10,000,000) to Fifty Million
(50,000,000); and

WHEREAS, the Board has the power, pursuant to Article 4 of the Articles, to
authorize the issuance from time to time of one or more series of Preferred
Stock and, with respect to each such series, to fix by resolution providing for
the authorization of such series, the number of shares of each such series, and
the voting powers, designations, preferences, limitations, restrictions,
relative rights and distinguishing designation of each such series and the
relative, participating, optional or other special rights and qualifications,
limitations or restrictions thereof; and

WHEREAS, the Board has determined that it is in the best interests of the
Company to provide for the designation of Twenty Five Million, Four Hundred
Forty Two Thousand, One Hundred Twenty One (25,442,121) shares of the Preferred
Stock as Series A Convertible Preferred Stock, having a par value of $0.001 per
share (the “Series A Preferred Stock”); and therefore, it is

RESOLVED, that, pursuant to the authority expressly granted to and vested in the
Board by the Articles and Sections 78.195 and 78.1955 of the NRS, the Board
hereby fixes the voting powers, designations, preferences, limitations,
restrictions and relative, participating, optional and other special rights of
the shares of the Series A Preferred Stock as follows:

SECTION 1

DESIGNATION AND RANK

1.1 Designation. There is hereby created out of the authorized and unissued
shares of Preferred Stock of the Company a single series of Preferred Stock, the
designation of which shall be Series A Convertible Preferred Stock. Each share
of Series A Preferred Stock shall have a par value of $0.001 per share. The
“Stated Value” for each share of Series A Preferred Stock shall initially equal
$7.50 per share.

1.2 Number of Authorized Shares. The number of authorized shares constituting
the Series A Preferred Stock is Twenty Five Million, Four Hundred Forty Two
Thousand, One Hundred Twenty One (25,442,121).

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1.3 Rank. The Series A Preferred Stock shall be senior to all other classes and
series of capital stock of the Company, including, without limitation, Common
Stock and other series of Preferred Stock (collectively, “Junior Stock”),
including, without limitation, with respect to the payment of dividends and
other distributions on the capital stock of the Company, including the
distribution of the assets of the Company upon a Liquidation Event (as defined
herein).

1.4 Initial Issuance. The Company anticipates issuing 14,666,667 shares of the
Series A Preferred Stock, with an aggregate Liquidation Preference of
$110,000,000 as of the date of issuance, promptly following the filing of this
Certificate of Designations with the Secretary of State of the State of Nevada
(the “Initial Issuance”).

SECTION 2

VOTING RIGHTS

2.1 General. Each holder of Series A Preferred Stock (each, a “Holder”) shall
have such number of votes for each share of Series A Preferred Stock held of
record by such Holder on an as converted (into Common Stock) basis, on each
matter upon which holders of Common Stock have the right to vote and shall vote
together with the holders of Common Stock (and any other class or series which
may be similarly entitled to vote) as one class on all matters upon which
holders of Common Stock have the right to vote, and not as a separate class or
series except as set forth in Section 2.2 below.

2.2 Series Voting. In addition to the other requirements of this Certificate of
Designations and any other vote of the Company’s stockholders required under
applicable law, if any shares of Series A Preferred Stock remain outstanding at
any point in time, the affirmative vote or written consent of the Holders of at
least a majority of the then issued and outstanding shares of Series A Preferred
Stock, voting together as a single class, shall be required for the Company to
effect any corporate action (whether taken by amendment, merger, consolidation
or otherwise) to:

(i) increase or decrease the authorized number of shares of Series A Preferred
Stock; or

(ii) create or authorize the creation of or issue any equity security, including
any security convertible into or exchangeable for any equity security, of any
other class or series having rights, preferences or privileges ranking on parity
with or senior to or prior to the Series A Preferred Stock; or

(iii) change the powers, designations, preferences, limitations, restrictions,
voting or other rights of the Series A Preferred Stock set forth in this
Certificate of Designations; or

(iv) alter or amend any provision of the Articles or the Bylaws of the Company
in a manner adverse to the rights of the Series A Preferred Stock set forth in
this Certificate of Designations; or

(v) redeem, repurchase or otherwise acquire any Junior Stock; provided, that,
this restriction shall not apply to the repurchase of Junior Stock held by
employees, independent contractors, consultants or medical doctors of the
Company upon termination of their employment or services pursuant to employment
agreements, consulting agreements or settlement agreements providing for such
repurchase; or

(vi) after the Initial Issuance, issue any additional shares of Series A
Preferred Stock, except as required pursuant to the terms of this Certificate of
Designations; or

(vii) effect an exchange, reclassification or cancellation of all or part of the
Series A Preferred Stock; or

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

(viii) change the Series A Preferred Stock into the same or a different number
of shares, with or without par value, of the same or another class.

In addition, without the affirmative vote or written consent of Holders of at
least a majority of the then issued and outstanding shares of Series A Preferred
Stock, voting together as a single class, the Company shall not consummate a
recapitalization, share exchange or reclassification involving the Series A
Preferred Stock or a merger or consolidation of the Company with another entity,
which recapitalization, share exchange, reclassification, merger or
consolidation does not constitute a Liquidation Event, unless in each case after
giving effect to such recapitalization, share exchange, reclassification, merger
or consolidation: (i) the Series A Preferred Stock remains outstanding and the
powers, preferences, privileges and voting and other rights are not amended in
any respect or, in the case of any such recapitalization, share exchange,
reclassification, merger or consolidation with respect to which the Company is
not the surviving or resulting entity, the shares of Series A Preferred Stock
are converted into or exchanged for preferred securities of the surviving or
resulting entity or its ultimate parent; and (ii) the shares of Series A
Preferred Stock remaining outstanding or such preferred securities, as the case
may be, have such powers, preferences, privileges and voting and other rights
that are substantially the same as the powers, preferences, privileges and
voting and other rights of the Series A Preferred Stock immediately prior to the
consummation of such transaction.

SECTION 3

CONVERSION RIGHTS

3.1 Conversion.

(a) Automatic Conversion. Each share of Series A Preferred Stock issued and
outstanding as of the date which is the tenth anniversary (the “Automatic
Conversion Date”) of the first date on which shares of Series A Preferred Stock
are issued (the “Original Issue Date”) shall automatically convert into such
number of fully paid and non-assessable shares of Common Stock, free and clear
of all liens, claims and encumbrances (except those created by the Holders),
equal to the quotient of its Liquidation Preference, as adjusted for any stock
dividends, combinations, splits, recapitalizations and the like with respect to
such shares (including after giving effect to the last paragraph of
Section 4.1(a)), divided by the then effective Conversion Price (an “Automatic
Conversion”). The “Conversion Price” shall be equal to the Stated Value
multiplied by the Conversion Rate (as defined below). The “Conversion Rate”
shall initially be equal to 1.0, subject to the adjustments set forth under
Section 3.3 and 3.4 herein that may occur prior to the Automatic Conversion
Date.

(b) Optional Conversion by Holder. At any time, from and after the third
anniversary of the Original Issue Date, to the extent the VWAP (as defined
below) of the Company’s Common Stock equals or exceeds $8.00 per share, as
adjusted for any stock dividends, combinations, splits, recapitalizations and
the like with respect to shares of Common Stock (the “Optional Conversion
Trigger Price”), for thirty consecutive trading days, any Holder, upon written
notice (the “Optional Conversion Notice”) to the Company, shall have the right
to convert any or all shares of Series A Preferred Stock it owns into fully paid
and non-assessable shares of Common Stock, free and clear of all liens, claims
and encumbrances (except those created by the Holders), equal to the quotient of
the Liquidation Preference, as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like with respect to such shares (including
after giving effect to the last paragraph of Section 4.1(a)), divided by the
then effective Conversion Price (an “Optional Conversion”), and the date upon
which the Company receives such notice shall be the effective date of any
Optional Conversion (an “Optional Conversion Date”). The Optional Conversion
Notice shall specify the number of shares of Series A Preferred Stock to be
converted by a Holder pursuant to the Optional Conversion. “VWAP” means, as of
any applicable date of determination, the volume weighted average per share
price of the Common Stock on the applicable trading day on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading (the “Principal Securities Exchange”). An example calculation is as
follows: if a Holder submits an

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

Optional Conversion Notice on the 180th day after the 4th anniversary of the
Original Issue Date, then each share of Series A Preferred Stock such Holder
elects to convert, shall convert into Common Stock based on the following
formula, assuming no adjustments for any stock dividends, combinations, splits,
recapitalizations and the like with respect to Series A Preferred Stock:

Liquidation Preference per share of Series A Preferred Stock/Conversion Price
per share of Series A Preferred Stock

Liquidation Preference = $110,000,000

Aggregate accrued and unpaid PIK Dividends as of the beginning of year 5 =
$13,735,040

Accrued and unpaid PIK Dividends in the calendar year in which conversion occurs
(6 month period in year 5) = $3,093,376

Conversion Price = $7.50

Common Stock issued = ($110,000,000 + $13,735,040 + $3,093,376)/$7.50 =
16,910,456

(c) Conversion Protocol. Upon any Automatic Conversion or Optional Conversion of
shares of Series A Preferred Stock, each Holder shall be deemed to own the
number of shares of Common Stock into which such Holder’s shares of Series A
Preferred Stock are converted. Promptly thereafter the Holder shall surrender
the certificate or certificates representing the Series A Preferred Stock that
were converted at the office of the Company or of the transfer agent for such
shares, or at such other place designated by the Company. Such surrender shall
be made by hand delivery or by reputable overnight courier. The Company shall,
promptly upon receipt of such certificates representing the shares of Series A
Preferred Stock that have been converted, deliver to such Holder, a certificate
or certificates for the number of shares of Common Stock to which such Holder
shall be entitled and, if applicable, a certificate representing those shares of
Series A Preferred Stock that have not been so converted. At the close of
business on the Automatic Conversion Date or the Optional Conversion Date, the
Holder shall be deemed to be the beneficial owner of the shares of Common Stock
into which the converted Series A Preferred Stock have been converted, and the
converted Series A Preferred Stock theretofore held by such Holder shall no
longer be outstanding and shall be deemed cancelled and void irrespective of
whether such Holder delivers the certificate representing the subject shares of
Series A Preferred Stock.

(d) Application to PIK Dividends. The conversion (Section 3.1) and anti-dilution
(Sections 3.3 - 3.6) terms of this Section 3 shall be applicable to and include
any shares of Series A Preferred Stock that have accrued as PIK Dividends
pursuant to Section 4.1 but that have not been paid as of any Automatic
Conversion Date or Optional Conversion Date.

3.2 No Fractional Shares. The Company shall not be required to issue or cause to
be issued fractional shares of Common Stock pursuant to any provision of this
Certificate of Designations. If any fraction of a share of Common Stock would be
issuable pursuant to this Certificate of Designations, the number of shares of
Common Stock to be issued shall be rounded up to the nearest whole share.

3.3 Adjustments for Consolidation, Merger, etc. In case of any consolidation or
merger of the Company with any other entity (other than a wholly-owned
subsidiary of the Company), or in case of any sale or transfer of all or
substantially all of the assets of the Company, or in case of any share exchange
pursuant to which all of the outstanding shares of Common Stock are converted
into other securities or property of the Company, the Company shall, prior to or
at the time of such transaction, make appropriate provision or cause appropriate
provision to be made so that Holders of each share of Series A Preferred Stock
then outstanding shall have the right thereafter to convert such shares of
Series A Preferred Stock into the kind and amount of shares of stock and other
securities and property receivable upon such consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Common Stock
into which such share of Series A Preferred Stock could have been converted
immediately prior to the effective date of such consolidation, merger, sale,
transfer or share exchange. If in connection with any such consolidation,
merger, sale, transfer or share exchange, each holder of

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

shares of Common Stock is entitled to elect to receive either securities, cash
or other assets upon completion of such transaction, the Company shall provide
or cause to be provided to each Holder of Series A Preferred Stock the right to
elect the securities, cash or other assets into which the Series A Preferred
Stock held by such Holder shall be convertible after consummation of any such
transaction on the same terms and subject to the same conditions applicable to
holders of the Common Stock (including, without limitation, notice of the right
to elect, limitations on the period in which such election shall be made and the
effect of failing to exercise the election).

3.4 Adjustments to Conversion Rate for Stock Splits, Reclassifications, and
Certain Distributions.

(a) In the event the Company at any time or from time to time after the Original
Issue Date fixes a record date for the effectuation of a split or subdivision of
the outstanding shares of Common Stock or the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”)
without payment of any consideration by such holder for the additional shares of
Common Stock or the Common Stock Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise thereof), then, as of such
record date (or the date of such dividend distribution, split or subdivision if
no record date is fixed), the Conversion Rate of the Series A Preferred Stock
shall be appropriately decreased so that the number of shares of Common Stock
issuable on conversion of each share of Series A Preferred Stock shall be
increased in proportion to such increase in the aggregate of shares of Common
Stock outstanding and those shares of Common Stock issuable with respect to such
Common Stock Equivalents as though such shares were issued at the time such
Common Stock Equivalents were issued.

(b) If the number of shares of Common Stock outstanding at any time after the
Original Issue Date is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date of such combination (or the date
of such combination if no record date is fixed), the Conversion Rate for the
Series A Preferred Stock shall be appropriately increased so that the number of
shares of Common Stock issuable on conversion of each share of Series A
Preferred Stock shall be decreased in proportion to such decrease in outstanding
shares.

(c) In the event the Company declares a dividend or distribution payable in
securities of other persons, evidences of indebtedness issued by the Company or
other persons, assets, rights or warrants entitling such holders to subscribe
for or purchase shares of Common Stock at a price per share less than the
then-current closing share price of the Common Stock, or any other Common Stock
Equivalents not referred to in Section 3.4(a), then, in each such case, the
Holders of the Series A Preferred Stock shall be entitled to a proportionate
share of any such distribution as though they were the holders of the number of
shares of Common Stock into which their shares of Series A Preferred Stock would
be convertible as if they were converted on the record date fixed for the
determination of the holders of Common Stock entitled to receive such dividend
or distribution.

(d) In the event the Common Stock is changed into the same or a different number
of shares of any class or classes of stock, whether by recapitalization,
reclassification or otherwise (other than a subdivision or combination of
shares, dividend, distribution or reorganization, merger, consolidation, sale of
assets or share exchange provided for elsewhere in this Section 3), in any such
event each Holder of Series A Preferred Stock shall have the right thereafter to
convert such Series A Preferred Stock into the kind and amount of stock and
other securities and property receivable upon such recapitalization,
reclassification or other change by holders of the maximum number of shares of
Common Stock into which the shares of Series A Preferred Stock could have been
converted immediately prior to such recapitalization, reclassification or
change, all subject to further adjustment as provided herein or with respect to
such other securities or property by the terms hereof.

3.5 Subsequent Adjustments. In the case of any adjustment pursuant to
Section 3.3 or Section 3.4, appropriate adjustment shall be made in the
application of the provisions of Section 3.3 and Section 3.4 with

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

respect to the rights of the Holders of the Series A Preferred Stock after such
consolidation, merger, sale, transfer, share exchange, recapitalization,
reclassification or other change to the end that the provisions of Section 3.3
and Section 3.4 (including adjustment of the Conversion Rate then in effect and
the number of shares of Common Stock, securities or other property of the
Company, or class or classes of stock issuable upon conversion of the Series A
Preferred Stock) shall be applicable after that event as nearly equivalent as
may be practicable.

3.6 Stockholder Rights Plans. To the extent that the Company has a rights plan
in effect with respect to the Common Stock on the Automatic Conversion Date or
an Optional Conversion Date, upon conversion of any Series A Preferred Stock,
such Holder shall receive, in addition to the Common Stock, the rights under
such rights plan, unless, prior to such Automatic Conversion Date or an Optional
Conversion Date, the rights have separated from the Common Stock, in which case
the Conversion Rate shall be adjusted at the time of separation of such rights
as if the Company made a distribution to all holders of Common Stock.

3.7 No Impairment. The Company will not, by amendment of its Articles or through
any reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Company, but will at all times in good faith
assist in carrying out all the provisions of this Section 3 and in the taking of
all such action as may be necessary or appropriate in order to protect the
conversion rights of the Holders of Series A Preferred Stock against impairment.

SECTION 4

DIVIDEND RIGHTS

4.1 Dividends or Distributions.

(a) General Obligation. Commencing on the one year anniversary of the Original
Issue Date and ending on the Automatic Conversion Date, in the event that any
shares of Series A Preferred Stock remain issued and outstanding, dividends (the
“PIK Dividends”) on each share of Series A Preferred Stock shall accrue
quarterly in arrears on the last day of each March, June, September and
December, and in kind in an amount of shares of Series A Preferred Stock equal
to (i) the product of the PIK Dividend rate described in the table below for the
period indicated (as applicable, the “PIK Dividend Rate”), multiplied by the
then effective Liquidation Preference per share of Series A Preferred Stock,
divided by (ii) four (4).

 

For the Period:

   PIK Dividend
Rate per Annum
in Effect  

Commencing on the Original Issue Date and ending on the 1st anniversary of the
Original Issue Date

     0.0 % 

Commencing on the day after the 1st anniversary of the Original Issue Date and
ending on the 4th anniversary of the Original Issue Date

     4.0 % 

Commencing on the day after the 4th anniversary of the Original Issue Date and
ending on the 5th anniversary of the Original Issue Date

     5.0 % 

Commencing on the day after the 5th anniversary of the Original Issue Date and
ending on the 6th anniversary of the Original Issue Date

     6.0 % 

Commencing on the day after the 6th anniversary of the Original Issue Date and
ending on the 7th anniversary of the Original Issue Date

     7.0 % 

Commencing on the day after the 7th anniversary of the Original Issue Date and
ending on the 8th anniversary of the Original Issue Date

     8.0 % 

Commencing on the day after the 8th anniversary of the Original Issue Date and
ending on the 9th anniversary of the Original Issue Date

     9.0 % 

Commencing on the day after the 9th anniversary of the Original Issue Date and
ending on the Automatic Conversion Date

     10.0 % 

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Such PIK Dividends shall be cumulative and shall accrue whether or not they have
been earned or declared and whether or not there are profits, surplus or other
funds of the Company legally available for the payment of PIK Dividends. On
December 31 of each year, beginning on the first anniversary of the Original
Issue Date and ending on the Automatic Conversion Date (each, a “Dividend
Reference Date”), all PIK Dividends which have accrued on a share of Series A
Preferred Stock outstanding during such calendar year (or such shorter period in
the case of the initial Dividend Reference Date) shall be added to the then
effective Liquidation Preference of such share of Series A Preferred Stock.
Notwithstanding anything to the contrary contained herein, in the event of a
Redemption or conversion of Series A Preferred Stock or a Liquidation Event on
any date other than December 31 of any calendar year, the Redemption Amount,
Liquidation Preference and the shares of Series A Preferred Stock so convertible
in connection therewith, as applicable, shall be increased by PIK Dividends in
an amount equal to the product of (i) the PIK Dividend Rate in effect for such
year reflected in the table above, and (ii) the quotient of (x) the number of
calendar days elapsed from January 1 of such year to the date of consummation of
such Redemption, conversion or Liquidation Event, as applicable, divided by
(y) 360.

(b) Dividend Payment Date. The accrued PIK Dividends shall be payable at such
times and with such frequency as determined in the sole discretion of the Board
(each such date, a “PIK Dividend Payment Date”) to the Holders of record, as
they appear on the stock records of the Company at the close of business on such
record date as shall be fixed by the Board not more than sixty (60) nor less
than ten (10) days preceding such PIK Dividend Payment Date.

(c) Payment Method. The Company shall make PIK Dividend payments on each PIK
Dividend Payment Date by Payment-in-Kind. “Payment-In-Kind” with respect to any
PIK Dividend Payment Date, means the issuance by the Company to each Holder of
Series A Preferred Stock that number of additional shares of Series A Preferred
Stock that have a Stated Value, as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with respect to such
shares, equal to the amount of accrued PIK Dividends on such Holder’s shares of
Series A Preferred Stock outstanding as of such PIK Dividend Payment Date.
Notwithstanding anything to the contrary contained herein, each Redemption
Amount, Liquidation Preference and the number of shares of Series A Preferred
Stock convertible hereunder shall be increased in accordance with this
Certificate of Designations for all accrued and unpaid PIK Dividends, regardless
of whether there has been any Payment-in-Kind with respect thereto.

(d) Limited Alternative Payment Method. Notwithstanding anything to the contrary
contained herein if, on account of an increase in the Liquidation Preference of
a share of Series A Preferred Stock pursuant to Section 4.1(a), any Holder of
Series A Preferred Stock would be prohibited by any applicable law, rule or
regulation (including, without limitation, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended) from holding its Series A Preferred Stock
or converting all its Series A Preferred Stock at the then effective Conversion
Price, without receiving the consent of any governmental authority that has not
been obtained at such time, then the Liquidation Preference shall not be so
increased and on such Dividend Reference Date, such PIK Dividend shall be paid
in cash on such Dividend Reference Date to each Holder in respect of each share
of Series A Preferred Stock that it holds, in lieu of such increase in the
Liquidation Preference; provided further that if the condition set forth above
shall cease to exist prior to an Optional Conversion Date or the Automatic
Conversion Date, the Liquidation Preference shall be increased to such
Liquidation Preference that would then be in effect as if such condition had not
existed. The Company agrees to notify each Holder, at least five (5) Business
Days prior to any Dividend Reference Date on which the condition set forth above
will apply, of such condition.

4.2 Consent of Series A Preferred Holders. No dividends, share repurchases, or
any other payments may be made with respect to any Junior Stock without the
prior written consent of Holders of a majority of the shares of Series A
Preferred Stock then outstanding. If the Holders of a majority of the shares of
Series A Preferred Stock so grant their consent to such dividend, share
repurchase or other payment, the Series A Preferred Stock shall participate in
all such dividends and other payments and, at the Holder’s election, share
repurchases, in each case with respect to Junior Stock on an as-converted basis.
Consent of Holders of a majority of the Series A Preferred Stock is not required
if all shares of Series A Preferred Stock have been redeemed or converted in
accordance

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

with the terms of this Certificate of Designations prior to the declaration of
any such dividend, the consummation of any such share repurchase or payment, or
the fixing of a record date for the stockholders to participate therein with
respect thereto.

SECTION 5

LIQUIDATION RIGHTS

5.1 Liquidation Preference. To the extent not prohibited by applicable law, upon
the occurrence of any Liquidation Event, each Holder shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
funds of the Company to the holders of shares of Junior Stock out of the assets
of the Company legally available therefor, whether such assets are capital,
surplus or earnings, an amount, payable in cash, equal to the Stated Value plus
all declared and unpaid dividends thereon, including all accrued and unpaid PIK
Dividends regardless of whether there has been any Payment-in-Kind with respect
thereto and after giving effect to the last paragraph of Section 4.1(a), in each
case, as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to such shares (the “Liquidation
Preference”), for each share of Series A Preferred Stock held by such Holder.
“Liquidation Event” means any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, and any Deemed Liquidation Event.

5.2 Deemed Liquidation Event. A “Deemed Liquidation Event” shall mean any of the
following: (a) the acquisition by any person other than a Holder or an Affiliate
(as defined below) of any Holder of 50% or more of the voting securities of the
Company; (b) any consolidation or merger of the Company with or into any other
corporation or other entity or person, or any other corporate reorganization, in
which the stockholders of the Company immediately prior to such consolidation,
merger or reorganization, own less than 50% of the Company’s voting power
immediately after such consolidation, merger or reorganization; and (c) any
sale, lease, license, transfer or other disposition of all or substantially all
of the assets, technology or intellectual property of the Company, other than
non-exclusive licenses granted in the ordinary course of the Company’s business.
“Affiliate” of a person entity shall mean another person or entity that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, such first person or entity.

5.3 Pro Rata Distribution. If, upon the occurrence of a Liquidation Event, the
assets and funds of the Company distributed among the Holders shall be
insufficient to permit the payment to such Holders of the full Liquidation
Preference, then the entire net assets of the Company legally available for
distribution shall be distributed among the Holders, ratably in proportion to
the aggregate Liquidation Preference to which each Holder would otherwise be
entitled and such distributions may be made in cash.

SECTION 6

REDEMPTION RIGHTS

6.1 Redemption; Company Option. At any time, and from time to time, the Company
may redeem, via cash delivery to the Holders, all, or any portion with an
aggregate Redemption Amount of no less than (a) from the Original Issue Date
until the 4th anniversary of the Original Issue Date, $10,000,000 and (b) after
the 4th anniversary of the Original Issue Date, $5,000,000 (each a “Minimum
Redemption Amount”), of the shares of Series A Preferred Stock then outstanding
(“Redemption”). If at any time the Company elects to redeem less than all of the
shares of Series A Preferred Stock then outstanding pursuant to this
Section 6.1, (x) the Company shall redeem shares of Series A Preferred Stock pro
rata among all Holders based on the number of shares of Series A Preferred Stock
then held by each Holder as a percentage of the aggregate number of shares of
Series A Preferred Stock then outstanding and (y) any Redemption in excess of
the Minimum Redemption Amount shall be made

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only in $1,000,000 increments. The Company shall effect any event of Redemption
by providing the Holders with five (5) Business Days’ advance written notice
(the “Redemption Notice”), and the delivery to the Holders of an amount equal to
the then effective Liquidation Preference (including after giving effect to the
last paragraph of Section 4.1(a)) per share of Series A Preferred Stock to be
redeemed (the “Redemption Amount”) on or prior to the date of Redemption (the
“Redemption Date”) with respect thereto. The Redemption Date for a Redemption
shall be specified in the Redemption Notice for such Redemption and in no event
shall such Redemption Date be more than five (5) Business Days following
Holders’ receipt of the applicable Redemption Notice. A Redemption Notice with
respect to a Redemption of Series A Preferred Stock held by the Holders shall be
irrevocable upon receipt by any Holder. Each share of Series A Preferred Stock
redeemed by the Company will be automatically and immediately cancelled and
retired and will not be reissued, sold or transferred.

6.2 Redemption Upon Future Capital Raises. For so long as any shares of Series A
Preferred Stock remain outstanding, in the event that the Company issues any
other class or series of equity or Common Stock Equivalents or any unsecured
debt securities for cash consideration, subject to the terms and conditions of
this Certificate of Designations (each such issuance, a “Triggering Issuance”),
the Company shall apply at least fifty percent (50%) of the Net Cash Proceeds
(as defined below) from any such Triggering Issuance to redeem shares of Series
A Preferred Stock held by the Holders of Series A Preferred Stock at the time of
such Triggering Issuance at a redemption price per share equal to the Redemption
Amount, payable in cash, and such payment to be made in full within five
(5) Business Days of the consummation of such Triggering Issuance; provided,
however, that cash proceeds received by the Company in connection with the
exercise of options, warrants or similar securities that are issued by the
Company to employees, directors, independent contractors, consultants or medical
doctors as compensation shall not be applied to the redemption of shares of
Series A Preferred Stock held by the Holders of Series A Preferred Stock. Any
Redemption pursuant to this Section 6.2 shall be made pro rata among all Holders
based on the number of shares of Series A Preferred Stock then held by each
Holder as a percentage of the aggregate number of shares of Series A Preferred
Stock then outstanding. The Company shall provide a Redemption Notice to the
Holders of Series A Preferred Stock in accordance with Section 6.1 with respect
to any redemption pursuant to this Section 6.2. Notwithstanding the foregoing,
none of the terms of this Section 6.2 shall restrict or otherwise limit or
impede the Company’s rights and sole discretion to pursue and consummate any
transaction that would constitute a Triggering Issuance, subject to the terms
and conditions of this Certificate of Designations. Further, the provisions of
this Section 6.2 notwithstanding, in the event that the Company issues any
additional equity or Common Stock Equivalents in connection with an acquisition
or any other transaction where the Company does not receive, directly or
indirectly, cash proceeds in exchange for the securities being issued, such
transaction shall not constitute a Triggering Issuance. The Company shall
provide the Holders of Series A Preferred Stock (i) five (5) days prior written
notice of any proposed Triggering Issuance and (ii) within two (2) Business Days
of the Triggering Issuance, a detailed breakdown of the Net Cash Proceeds with
respect thereto. “Net Cash Proceeds” means the amount equal to (a) the gross
cash proceeds of the Triggering Issuance, minus (b) all (i) underwriting
discounts, commissions and expenses, (ii) placement agent fees paid to persons
and entities that are not Affiliates of the Company, and (iii) reasonable legal
and accounting fees and expenses.

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6.3 Redemption Discounts. Commencing on the Original Issue Date and ending on
the fourth anniversary of the Original Issue Date, in the event that any shares
of Series A Preferred Stock are redeemed pursuant to Section 6.1 or 6.2, the
Redemption Amount for each share being redeemed shall be reduced by an amount
determined by multiplying the discount rate listed below for the period in which
the Redemption is consummated by the Redemption Amount before such discount is
applied.

 

For the Period:

   Discount to
Redemption
Amount in
Effect  

Commencing on the Original Issue Date and ending on the 1st anniversary of the
Original Issue Date

     9.0909 % 

Commencing on the day after the 1st anniversary of the Original Issue Date and
ending on the 2nd anniversary of the Original Issue Date

     6.8182 % 

Commencing on the day after the 2nd anniversary of the Original Issue Date and
ending on the 3rd anniversary of the Original Issue Date

     4.5455 % 

Commencing on the day after the 3rd anniversary of the Original Issue Date and
ending on the 4th anniversary of the Original Issue Date

     2.2727 % 

From and after the fourth anniversary of the Original Issue Date, no reduction
shall be made to the Redemption Amount for any share of Series A Preferred
Stock.

SECTION 7

TRANSFERS

7.1 Prohibitions on Transfers. No sale, exchange, delivery, assignment,
transfer, disposal, encumbrance, pledge or hypothecation, whether voluntary,
involuntary, by operation of law, or resulting from death, disability or
otherwise (a “Transfer”) will be made by a Holder of any shares of Series A
Preferred Stock held by such Holder without the express written consent of the
Company (which approval may be granted, denied or withheld in the Board’s
reasonable discretion), provided that, a Holder may effect a Transfer to its
Affiliate upon written notice to the Company.

7.2 Effect of Wrongful Transfers. Any attempted Transfer not in accordance with
the terms of this Section 7 will be null and void and will not be reflected on
the Company’s books and records.

SECTION 8

MISCELLANEOUS

8.1 Headings of Subdivisions. The headings of the various Sections hereof are
for convenience of reference only and shall not affect the interpretation of any
of the provisions hereof.

8.2 Charges, Taxes and Expenses. Issuance of certificates for shares of Series A
Preferred Stock and for shares of Common Stock deliverable pursuant to this
Certificate of Designations shall be made without charge to the Holders for any
issue tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company. The Holder shall be responsible for all
transfer tax and other tax liability that may arise as a result of transferring
the Series A Preferred Stock or the issuance and delivery of shares of Common
Stock deliverable pursuant to this Certificate of Designations in a name other
than that of the Holder of the Series A Preferred Stock to be converted.

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8.3 Replacement Certificates. If any certificate evidencing Series A Preferred
Stock, or Common Stock deliverable pursuant to this Certificate of Designations,
is mutilated, lost, stolen or destroyed, or a Holder fails to deliver such
certificate as may otherwise be provided herein, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution for such certificate, a new certificate,
but only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction (in such case) and, in each case, customary and
reasonable indemnity, if requested. Applicants for a new certificate under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe.

8.4 Reservation of Common Stock and Series A Preferred Stock. The Company shall,
at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue shares of Common Stock and Series A Preferred Stock as
required hereunder, prior to the Automatic Conversion Date, the number of shares
of Common Stock and Series A Preferred Stock which are then issuable and
deliverable pursuant to this Certificate of Designations, in each case free from
preemptive rights or any other contingent purchase rights of persons other than
the Holders. All shares of Common Stock and Series A Preferred Stock so issuable
and deliverable shall, upon issuance in accordance with the terms hereof, be
duly and validly authorized, issued and fully paid and non-assessable, and free
and clear of all liens, claims and encumbrances (except those created by the
Holders). Prior to the delivery of any securities that the Company shall be
obligated to issue upon conversion of the Series A Preferred Stock, the Company
shall use reasonable best efforts to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority (if applicable).

8.5 Notices. Any and all notices or other communications or deliveries hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(i) the Business Day following the date of mailing, if sent by a nationally
recognized overnight courier service, or (ii) upon actual receipt by the party
to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, to the address therefor set
forth on the signature page hereto, or (ii) if to a Holder, to the address
appearing on the Company’s stockholder records or such other address as such
Holder may provide to the Company in accordance with this Section 8.5. “Business
Day” means any day that is not a Saturday, a Sunday or other day on which
commercial banks in the City of New York, New York are required or authorized by
law to be closed.

8.6 Amendments; Modifications. No provision of this Certificate of Designations
may be amended, except in a written instrument signed by the Company and Holders
of at least a majority of the shares of Series A Preferred Stock then
outstanding. Any of the rights of the Holders set forth herein may be waived by
the affirmative vote of Holders of at least a majority of the shares of Series A
Preferred Stock then outstanding, provided that that only a Holder may waive its
own rights as provided in this Certificate of Designations. No waiver of any
default with respect to any provision, condition or requirement of this
Certificate of Designations shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such
right.

** Remainder of page intentionally left blank. Signatures to follow **

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IN WITNESS WHEREOF, this Certificate of Designations for the Series A
Convertible Preferred Stock has been executed by a duly authorized officer of
the Company on the date set forth below.

 

  NEOGENOMICS, INC.

Date:                         , 2015

  By:                                   
                                                                            
Name:                                        
                                                                    
Title:                                  
                                                                         

COMPANY ADDRESS:

12701 Commonwealth Drive, Suite 9

Fort Myers, FL 33913