Exhibit 10.1

 

STOCK PURCHASE AGREEMENT

 

This Stock Purchase Agreement (“Agreement”) is made as of September 21, 2016
(the “Effective Date”), by and among T2 Biosystems, Inc., a Delaware corporation
(the “Company”), and Canon U.S.A., Inc., a New York corporation (the
“Purchaser”).

 

AGREEMENT

 

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

 

SECTION 1.

AUTHORIZATION OF SALE OF STOCK

 

The Company has authorized the sale and issuance of 6,055,341 shares (the
“Shares”) of its Common Stock, par value $0.001 per share (the “Common Stock”),
on the terms and subject to the conditions set forth in this Agreement.

 

SECTION 2.

AGREEMENT TO SELL AND PURCHASE THE STOCK

 

2.1         Sale of Stock.  At the Closing (as defined in Section 3.1), the
Company will sell to the Purchaser, and the Purchaser will purchase from the
Company, the Shares at a purchase price of $6.56 per Share for an aggregate
purchase price of $39,723,036.96.

 

SECTION 3.

CLOSING AND DELIVERY

 

3.1         Closing.  The closing of the purchase and sale of the Shares
pursuant to this Agreement (the “Closing”) shall be held on September 21, 2016
at the offices of Latham & Watkins LLP, John Hancock Tower, 27th Floor, Boston,
Massachusetts 02116, or on such other date and place as may be agreed to by the
Company and the Purchaser.  At or prior to the Closing, the Purchaser shall
execute any related agreements or other documents required to be executed
hereunder, dated as of the date of the Closing (the “Closing Date”).

 

3.2         Issuance of the Shares at the Closing.  At the Closing, the Company
shall issue or deliver to the Purchaser evidence of a book entry position
evidencing the Shares purchased by the Purchaser hereunder, registered in the
name of the Purchaser, or in such nominee name(s) as designated by the
Purchaser, representing the number of Shares to be purchased by the Purchaser at
the Closing against payment of the purchase price for such Shares.  The name in
which the shares are to be issued to the Purchaser are set forth in the
Purchaser Questionnaire and the Selling Stockholder Notice and Questionnaire in
the form attached hereto as Appendix I and II (the “Purchaser Questionnaire” and
the “Selling Stockholder Questionnaire”, respectively), as completed by the
Purchaser, which shall be provided to the Company no later than the Closing
Date.

 

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3.3         Delivery of the Registration Rights Agreement.  At the Closing, the
Company and the Purchaser shall execute and deliver the Registration Rights
Agreement in the form attached hereto as Appendix III (the “Registration Rights
Agreement”), with respect to the registration of the Shares under the Securities
Act of 1933, as amended (the “Securities Act”).

 

3.4         Delivery of the Voting and Standstill Agreement.  At the Closing,
the Company and the Purchaser shall execute and deliver the Voting and
Standstill Agreement in the form attached hereto as Appendix IV (the “Voting and
Standstill Agreement”).

 

SECTION 4.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY

 

Except as set forth on the Schedule of Exceptions delivered to the Purchaser
concurrently with the execution of this Agreement (the “Schedule of Exceptions”)
or, solely with respect to Sections 4.1, 4.6 (excluding the 7th sentence
thereof), 4.10, 4.14, 4.15, 4.18, 4.19, 4.23, 4.25, 4.26, 4.29, 4.30 and 4.34,
as otherwise described in the SEC Documents (as defined below), which
disclosures qualify these representations and warranties in their entirety, the
Company hereby represents and warrants as of the date hereof to, and covenants
with, the Purchaser as follows:

 

4.1         Subsidiaries.  The Company has no direct or indirect Subsidiaries
(as defined below) other than those listed in Exhibit 21.1 to the Company’s
Annual Report on Form 10-K for the year ended December 31, 2015. The Company
owns, directly or indirectly, all of the capital stock or comparable equity
interests of each Subsidiary free and clear of any and all liens, charges,
claims, encumbrances, security interests, rights of first refusal, preemptive
rights or other restrictions of any kind (collectively, “Liens”), and all the
issued and outstanding shares of capital stock or comparable equity interest of
each Subsidiary are validly issued and are fully paid, non-assessable and free
of preemptive and similar rights to subscribe for or purchase securities. 
“Subsidiary” means any entity in which the Company, directly or indirectly, owns
sufficient capital stock or holds a sufficient equity or similar interest such
that it is consolidated with the Company in the financial statements of the
Company.

 

4.2         Organization and Standing.  The Company and each of its Subsidiaries
(i) has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with full corporate power and authority to own or lease, as the
case may be, and to operate its properties and conduct its business as presently
conducted, and (ii) is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires such
qualification, except in the case of clause (ii) above, to the extent that the
failure to be so qualified or be in good standing would not reasonably be
expected to result in (i) a material adverse effect on the validity or
enforceability of this Agreement, (ii)  a material adverse effect on the
condition (financial or otherwise), earnings, business, results of operations,
assets or properties of the Company and its Subsidiaries, taken as a whole, or
(iii) a material adverse effect on the Company’s ability to perform in any
material respect its obligations under this Agreement (any of (i), (ii) or
(iii)) (a “Material Adverse Effect”).

 

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4.3         Corporate Power; Authorization.  The Company has all requisite
corporate power and authority, and has taken all requisite corporate action, to
execute and deliver this Agreement, the Registration Rights Agreement and the
Voting and Standstill Agreement (collectively, the “Transaction Documents”),
sell and issue the Shares and carry out and perform all of its obligations under
the Transaction Documents.  Each Transaction Document constitutes the legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors’ rights generally, (ii) as limited by equitable
principles generally, including any specific performance and (iii) with respect
to the Registration Rights Agreement, as rights to indemnity or contribution may
be limited by state or federal laws or public policy underlying such laws.

 

4.4         Issuance and Delivery of the Shares.  The Shares have been duly
authorized and, when issued and paid for in compliance with the provisions of
this Agreement, will be validly issued, fully paid and nonassessable and free
and clear of all Liens, other than restrictions on transfer imposed by
applicable securities laws and the Voting and Standstill Agreement, and shall
not be subject to preemptive or similar rights.  Assuming the accuracy of the
representations made by the Purchaser in Section 5, the offer and issuance by
the Company of the Shares is exempt from registration under the Securities Act.

 

4.5         SEC Documents; Financial Statements.  The Company has filed in a
timely manner all documents that the Company was required to file with the
Securities and Exchange Commission (the “Commission”) under Sections 13,
14(a) and 15(d) the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), since January 1, 2015 (collectively with all exhibits, schedules and
annexes thereto, the “SEC Documents”).  As of their respective filing dates (or,
if amended prior to the date of this Agreement, when amended), all SEC Documents
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the Commission promulgated thereunder.  None of the
SEC Documents as of their respective dates contained any untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.  The consolidated financial
statements of the Company included in the SEC Documents (the “Financial
Statements”) present fairly the consolidated financial condition, results of
operations and cash flows of the Company and its Subsidiaries, taken as a whole,
as of the dates and for the periods indicated, comply in all material respects
with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing and have been
prepared in conformity with generally accepted accounting principles (“GAAP”)
applied on a consistent basis throughout the periods involved (except as
otherwise noted therein). Ernst & Young LLP, who have certified certain
financial statements of the Company delivered their report with respect to the
audited consolidated financial statements and schedules included in the SEC
Documents, are independent public accountants with respect to the Company within
the meaning of the Exchange Act and the applicable published rules and
regulations thereunder.  There is no transaction, arrangement, or other
relationship between the Company (or any Subsidiary) and any unconsolidated or
other off balance sheet entity that is required to be disclosed by the Company
in its Exchange Act filings that is not so disclosed.

 

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4.6         Capitalization.  The authorized capital stock of the Company
consists of 200,000,000 shares of common stock and 10,000,000 shares of
undesignated Preferred Stock.  As of the Effective Date, there are no shares of
Preferred Stock issued and outstanding and there are 24,373,960 shares of Common
Stock issued and outstanding, of which no shares are owned by the Company. 
There are no other shares of any other class or series of capital stock of the
Company issued or outstanding.  The Company has no capital stock reserved for
issuance, except that, as of the Effective Date, there are (i) 4,462,423 shares
of Common Stock reserved for issuance pursuant to the Company’s stock incentive
plans, of which 4,281,800 shares are issuable upon the exercise of stock options
outstanding on the date hereof and (ii) 180,623 shares of Common Stock reserved
for issuance pursuant to the Company’s employee stock purchase plan.  There are
no bonds, debentures, notes or other indebtedness having general voting rights
(or convertible into securities having such rights) (“Voting Debt”) of the
Company issued and outstanding.  Except as stated above, there are no existing
options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments relating to the issued or unissued capital stock of
the Company, obligating the Company to issue, transfer, sell, redeem, purchase,
repurchase or otherwise acquire or cause to be issued, transferred, sold,
redeemed, purchased, repurchased or otherwise acquired any capital stock or
Voting Debt of, or other equity interest in, the Company or securities or rights
convertible into or exchangeable for such shares or equity interests or
obligations of the Company to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement, arrangement or
commitment.  The issuance of Common Stock or other securities pursuant to any
provision of this Agreement will not give rise to any preemptive rights or
rights of first refusal on behalf of any Person (as defined below) or result in
the triggering of any anti-dilution or price adjustment rights.  There are no
agreements or arrangements under which the Company or any of its Subsidiaries is
obligated to register the sale of any of their securities under the Securities
Act.  “Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

4.7         Litigation.  No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its Subsidiaries or their respective properties is pending or, to the
best knowledge of the Company, threatened that would have or reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business. 
Neither the Company nor any Subsidiary, nor to the Company’s knowledge any
director or officer thereof, is or has been the subject of any action, suit or
proceeding involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty.  There has not been, and
to the Company’s knowledge there is not pending or contemplated, any
investigation by the Commission involving the Company or, to the Company’s
knowledge, any current or former director or officer of the Company.  The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any of its
Subsidiaries under the Exchange Act or the Securities Act.  There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
arbitrator or governmental or regulatory body against the Company or, to the
Company’s knowledge, any executive officers or directors of the Company in their
capacities as such, which individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.

 

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4.8         Governmental Consents.  No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company or
any of its Subsidiaries is required in connection with the consummation of the
transactions contemplated by the Transaction Documents except for (a) the filing
of a Form D with the Commission under the Securities Act and compliance with the
securities and blue sky laws in the states and other jurisdictions in which
shares of Common Stock are offered and/or sold, which compliance will be
effected in accordance with such laws, (b) the filing of a Notification Form:
Listing of Additional Shares with the NASDAQ Global Market (“NASDAQ”) for the
listing of the Shares (which has been made and approved prior to the date
hereof) and (c) the filing of one or more registration statements and all
amendments thereto with the Commission as contemplated by the Registration
Rights Agreement.

 

4.9         No Default or Consents.  Neither the execution, delivery or
performance of the Transaction Documents by the Company nor the consummation of
any of the transactions contemplated thereby (including, without limitation, the
issuance and sale by the Company of the Shares) will conflict with, result in a
breach or violation of, or imposition of any lien, charge or encumbrance upon
any property or assets of the Company pursuant to, (i) the charter or by-laws of
the Company or any of its Subsidiaries, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which the
Company or any of its Subsidiaries is a party or bound or to which its or their
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree applicable to the Company or any of its Subsidiaries of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its Subsidiaries
or any of their respective properties, except in the case of clauses (ii) and
(iii) above, for any conflict, breach or violation of, or imposition that would
not, individually or in the aggregate, have or reasonably be expected to have a
Material Adverse Effect.

 

4.10      No Material Adverse Change.  Since June 30, 2016, (i) there have not
been any changes in the authorized capital, assets, liabilities, financial
condition, business, Material Contracts (as defined below) or operations of the
Company from that reflected in the Financial Statements except changes in the
ordinary course of business which have not had or would not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, (ii) the Company has not incurred any material liabilities (contingent
or otherwise) other than (A) trade payables, accrued expenses and other
liabilities incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered materially its
method of accounting or the manner in which it keeps its accounting books and
records, (iv) the Company has not declared or made any dividend or distribution
of cash or other property to its shareholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the
Company has not issued any equity securities to any officer, director or
Affiliate (as defined below), except Common Stock issued pursuant to existing
Company stock option or stock purchase plans or executive and director
arrangements disclosed in the SEC Documents.  Neither the Company nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any law or
statute relating to bankruptcy, insolvency, reorganization, receivership,
liquidation or

 

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winding up, nor does the Company or any Subsidiary have any knowledge or reason
to believe that any of their respective creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would
reasonably lead a creditor to do so. The Company and its Subsidiaries,
individually and on a consolidated basis, are not as of the date hereof, and
after giving effect to the transactions contemplated hereby to occur at the
Closing, will not be insolvent.  Neither the Company nor any of its Subsidiaries
has engaged in any business or in any transaction, and is not about to engage in
any business or in any transaction, for which the Company’s or such Subsidiary’s
remaining assets constitute unreasonably small capital.  For purposes of this
Agreement, “Affiliate” shall have the same meaning ascribed to such term in the
Voting and Standstill Agreement.

 

4.11      No General Solicitation.  Neither the Company nor any Person acting on
its behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D promulgated under the Securities
Act) in connection with the offer or sale of the Shares.

 

4.12      No Integrated Offering.  Neither of the Company or any Person acting
on its behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any Company security, under
circumstances that would adversely affect reliance by the Company on
Section 4(a)(2) of the Securities Act or require registration of any of the
Shares under the Securities Act or cause this offering of the Shares to be
integrated with prior offerings by the Company (i) for purposes of the
Securities Act or (ii) for purposes of the rules and regulations of NASDAQ such
that it would require stockholder approval prior to the Closing.

 

4.13      Sarbanes-Oxley Act.  There is and has been no failure on the part of
the Company and any of the Company’s directors or officers, in their capacities
as such, to comply with any applicable provision of the Sarbanes-Oxley Act of
2002 and the rules and regulations promulgated in connection therewith,
including, without limitation, Section 402 relating to loans.

 

4.14      Intellectual Property.  The Company and its Subsidiaries collectively
own, possess, license or have other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property (collectively, the
“Intellectual Property”) necessary for the conduct of the Company’s and its
Subsidiaries’ business, taken as a whole, as now conducted or as proposed in the
SEC Documents to be conducted (the “Company Intellectual Property”). To the
knowledge of the Company, there are no rights of third parties to any Company
Intellectual Property, other than as licensed by the Company. To the knowledge
of the Company, there is no infringement by third parties of any Company
Intellectual Property. There is no pending or, to the Company’s knowledge,
threatened action, suit, proceeding or claim by others challenging the Company’s
rights in or to any Company Intellectual Property. There is no pending or, to
the Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any Company Intellectual Property. There is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others that the Company infringes or otherwise violates any patent,
trademark, copyright, trade secret or other proprietary rights of others. The
Company is not aware of any facts required to be disclosed to the U.S. Patent
and Trademark Office (“USPTO”) which have not been disclosed to the USPTO and
which would preclude the grant of a patent in

 

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connection with any patent application of the Company Intellectual Property or
could form the basis of a finding of invalidity with respect to any issued
patents of the Company Intellectual Property.  The Company and its Subsidiaries
collectively have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of the Company Intellectual Property, except
where the failure to do so would not, individually or in the aggregate, have or
reasonably be expected to have a Material Adverse Effect.

 

4.15      Compliance with NASDAQ Continued Listing Requirements.  The Company’s
Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and
the Company has taken no action designed to terminate the registration of the
Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration.
The Company is in compliance with applicable NASDAQ continued listing
requirements. There are no proceedings pending or, to the Company’s knowledge,
threatened against the Company relating to the continued listing of the Common
Stock on NASDAQ and the Company has not received any notice of, nor to the
Company’s knowledge is there any reasonable basis for, the delisting of the
Common Stock from NASDAQ.

 

4.16      Disclosure.  The Company understands and confirms that the Purchaser
will rely on the foregoing representations in effecting transactions in
securities of the Company.  To the knowledge of the executive officers of the
Company, all due diligence materials regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company to
the Purchaser upon its request are, when taken together with the SEC Documents
and the Schedule of Exceptions, true and correct in all material respects and do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.

 

4.17      Contracts.  Each franchise, contract or other document of a character
required to be described in the SEC Documents or to be filed as an exhibit to
the SEC Documents under the Securities Act and the rules and regulations
promulgated thereunder (collectively, the “Material Contracts”) is so described
or filed.  Neither the Company nor any of its Subsidiaries is in default under
or in violation of (and to the Company’s knowledge no event has occurred that
has not been waived that, with notice or lapse of time or both, would result in
a default by the Company or any of its Subsidiaries under), nor has the Company
or any of its Subsidiaries received written notice of a claim that it is in
default under or that it is in violation of, any Material Contract (whether or
not such default or violation has been waived).

 

4.18      Properties and Assets.  The Company and its Subsidiaries have good and
marketable title to all real property and tangible personal property owned by
them which is material to the business of the Company and its Subsidiaries,
taken as a whole, in each case free and clear of all Liens except such as do not
materially affect the value of such property or do not materially interfere with
the use made and proposed to be made of such property by the Company and any of
its Subsidiaries or relate to indebtedness of the Company in existence as of the
Effective Date. Except as would not have or reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, any real property
and facilities held under lease by the

 

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Company and any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases.

 

4.19      Compliance.  Except as (A) set forth herein or (B) would not (1) have
or reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or (2) materially and adversely affect the validity or
enforceability of, or the authority or the ability of the Company to perform its
obligations under, the Transaction Documents: (i) the Company and each of its
Subsidiaries are in compliance with statutes, laws, ordinances, rules and
regulations applicable to the Company and its Subsidiaries, including without
limitation for the ownership, testing, development, manufacture, packaging,
processing, use, labeling, storage, or disposal of any product manufactured by
or on behalf of the Company or any of its Subsidiaries or out-licensed by the
Company or any of its Subsidiaries (a “Company Product”), including without
limitation, the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et seq.,
the Public Health Service Act, 42 U.S.C. § 262, similar laws of other
governmental entities and the regulations promulgated pursuant to such laws
(collectively, “Applicable Laws”); (ii) the Company and each of its Subsidiaries
possess all licenses, certificates, approvals, authorizations, permits and
supplements or amendments thereto required by any such Applicable Laws and/or
for the ownership of their respective properties or the conduct of their
respective businesses, including without limitation as it relates to a Company
Product and as described in the SEC Documents (collectively, “Authorizations”)
and such Authorizations are valid and in full force and effect and the Company
is not in violation of any term of any such Authorizations; (iii) neither the
Company nor any of its Subsidiaries has received any written notice of adverse
finding or warning letter from the U.S. Food and Drug Administration (the “FDA”)
or any other governmental entity alleging or asserting noncompliance with any
Applicable Laws or Authorizations relating to a Company Product; (iv) neither
the Company nor any of its Subsidiaries has received written notice of any
ongoing claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any governmental entity or third party alleging
that any Company Product, operation or activity related to a Company Product is
in violation of any Applicable Laws or Authorizations or has any knowledge that
any such governmental entity or third party is considering any such claim,
litigation, arbitration, action, suit, investigation or proceeding; (v) neither
the Company nor any of its Subsidiaries has received written notice that any
governmental entity has taken, is taking or intends to take action to limit,
suspend, modify or revoke any Authorizations or has any knowledge that any such
governmental entity has threatened or is considering such action with respect to
a Company Product; and (vi) the Company and each of its Subsidiaries have filed,
obtained, maintained or submitted all reports, documents, forms, notices,
applications, records, claims, submissions and supplements or amendments as
required by any Applicable Laws or Authorizations and that all such reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments were complete, correct and not misleading on the date
filed (or were corrected or supplemented by a subsequent submission). To the
Company’s knowledge, neither the Company nor any of its Subsidiaries, directors,
officers, employees or agents, has made, or caused the making of, any false
statements on, or material omissions from, any other records or documentation
prepared or maintained to comply with the requirements of the FDA or any other
governmental entity.

 

4.20      Taxes.  The Company and each of its Subsidiaries has filed all
material tax returns that are required to be filed or has requested valid
extensions thereof. All such tax returns are correct and complete in all
material respects for the periods to which such tax returns relate, and

 

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the Company and each of its Subsidiaries has paid all taxes required to be paid
by them and any other assessment, fine or penalty levied against it, to the
extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as would not have or reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, whether or not arising from transactions
in the ordinary course of business.  There are in effect no waivers of
applicable statutes of limitations with respect to taxes for any year.

 

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

 

4.22      Investment Company.  The Company is not and, after giving effect to
the offering and sale of the Shares, will not be an “investment company” as
defined in the Investment Company Act of 1940, as amended.

 

4.23      Insurance.  The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are reasonable and customary in the business in which it
is engaged; all policies of insurance and fidelity or surety bonds insuring the
Company and each of its Subsidiaries or their respective businesses, assets,
employees, officers and directors are in full force and effect; the Company and
each of its Subsidiaries is in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by the Company or
any of its Subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; neither the Company nor any of its Subsidiaries has been refused
any insurance coverage sought or applied for; and the Company has no reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have or
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, whether or not arising from transactions in the ordinary course
of business.

 

4.24      Price of Common Stock.  The Company has not, and to the Company’s
knowledge no one acting on its behalf has, taken, directly or indirectly, any
action designed to cause or result in, or that has constituted or that might
reasonably be expected to constitute the stabilization or manipulation of the
price of any securities of the Company to facilitate the sale or resale of the
Shares.

 

4.25      Governmental Permits, Etc.  The Company and each of its Subsidiaries
possess all licenses, certificates, permits and other authorizations issued by
all applicable authorities necessary to conduct their respective businesses, and
neither the Company nor any of its Subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have or reasonably be expected to
have a Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business.

 

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4.26      Internal Control over Financial Reporting; Sarbanes-Oxley Matters. 
The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company’s internal controls over financial reporting (as defined in
Rule 13a-15(f) under the Exchange Act) are effective to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles and the Company is not aware of any material
weakness in its internal controls over financial reporting.  The Company
maintains “disclosure controls and procedures” (as such term is defined in
Rule 13a-15(e) under the Exchange Act); such disclosure controls and procedures
are effective.

 

4.27      Foreign Corrupt Practices.  Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
or employee of the Company, has taken any action, directly or indirectly, that
would result in a violation by the Company or such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the “FCPA”), including, without limitation, making use of the mails
or any means or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any “foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA.

 

4.28      Labor.  No labor problem or dispute with the employees of the Company
or any of its Subsidiaries exists or, to the knowledge of the Company, is
threatened, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers or contractors,
that could have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business.

 

4.29      ERISA.  None of the following events has occurred or exists: (i) a
failure to fulfill the obligations, if any, under the minimum funding standards
of Section 302 of the United States Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and the regulations and published interpretations
thereunder with respect to a Plan that is required to be funded, determined
without regard to any waiver of such obligations or extension of any
amortization period; (ii) an audit or investigation by the Internal Revenue
Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation
or any other federal or state governmental agency or any foreign regulatory
agency with respect to the employment or compensation of employees by any of the
Company that could have a Material Adverse Effect; (iii) any breach of any
contractual obligation, or any violation of law or applicable qualification
standards, with respect to the employment or compensation of employees by the
Company that would reasonably be expected to have a Material Adverse Effect.
None of the following events has occurred or is reasonably likely to occur:
(i) a material increase in the aggregate amount of contributions required to be
made to all Plans in the current fiscal year of the Company compared to the
amount

 

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of such contributions made in the most recently completed fiscal year of the
Company; (ii) a material increase in the “accumulated post-retirement benefit
obligations” (within the meaning of Statement of Financial Accounting Standards
106) of the Company compared to the amount of such obligations in the most
recently completed fiscal year of the Company; (iii) any event or condition
giving rise to a liability under Title IV of ERISA that could have a Material
Adverse Effect; or (iv) the filing of a claim by one or more employees or former
employees of the Company related to their employment that could have a Material
Adverse Effect. For purposes of this paragraph, the term “Plan” means a plan
(within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA with
respect to which the Company may have any liability.

 

4.30      Environmental Laws.  The Company and each of its Subsidiaries (i) are
in compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have received and are in compliance
with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct its business and (iii) have not received notice of
any actual or potential liability under any environmental law, except where such
non-compliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, or liability would not, individually or in the
aggregate, have or reasonably be expected to have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of business.
Neither the Company nor any of its Subsidiaries has been named as a “potentially
responsible party” under the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended.

 

4.31      Money Laundering Laws. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements and the money
laundering statutes and the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by
any governmental agency (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.

 

4.32      OFAC. Neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent or employee of the
Company or any of its Subsidiaries (i) is currently subject to any sanctions
administered or imposed by the United States (including any administered or
enforced by the Office of Foreign Assets Control of the U.S. Treasury
Department, the U.S. Department of State, or the Bureau of Industry and Security
of the U.S. Department of Commerce), the United Nations Security Council, the
European Union, or the United Kingdom (including sanctions administered or
controlled by Her Majesty’s Treasury) (collectively, “Sanctions” and such
persons, “Sanction Persons”) or (ii) will, directly or indirectly, use the
proceeds of this offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person in any manner
that will result in a violation of any economic Sanctions by, or could result in
the imposition of Sanctions against, any person (including any person
participating in the offering, whether as underwriter, advisor, investor or
otherwise). Neither the Company nor any of its Subsidiaries nor, to the
knowledge of the Company, any director, officer, agent, or employee of the
Company or any of its Subsidiaries, is a

 

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person that is, or is 50% or more owned or otherwise controlled by a person that
is: (i) the subject of any Sanctions; or (ii) located, organized or resident in
a country or territory that is, or whose government is, the subject of Sanctions
that broadly prohibit dealings with that country or territory (currently,
Cuba, Iran, North Korea, Sudan, and Syria) (collectively, “Sanctioned Countries”
and each, a “Sanctioned Country”). Neither the Company nor any of its
Subsidiaries has engaged in any dealings or transactions with or for the benefit
of a Sanctioned Person, or with or in a Sanctioned Country, in the preceding
three years, nor does the Company or its Subsidiaries have any plans to increase
their respective dealings or transactions with Sanctioned Persons, or with or in
Sanctioned Countries.

 

4.33      Rights Agreements; Approval of Transaction Documents.  The Company
does not have in effect any stockholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of Common Stock or a change in
control of the Company.  The Company’s Board has approved the transactions
contemplated by the Transaction Documents, including the issuance of the Shares
to the Purchaser (including, without limitation, for purposes of Section 203 of
the Delaware General Corporation Law).

 

4.34      Transactions With Affiliates and Employees.  Except as set forth in
the SEC Documents, to the Company’s knowledge, none of the executive officers or
directors of the Company is presently a party to any transaction with the
Company or to a presently contemplated transaction (other than for services as
officers and directors) that would be required to be disclosed pursuant to
Item 404 of Regulation S-K promulgated under the Securities Act.

 

4.35      No “Bad Actor” Disqualification.  The Company has conducted a factual
inquiry including the procurement of relevant questionnaires from each Covered
Person (as defined below) or other means to determine whether any Covered Person
(as defined below) is subject to any of the “bad actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act
(“Disqualification Events”). To the Company’s knowledge, after conducting such
factual inquiries, no Covered Person is subject to a Disqualification Event,
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under
the Securities Act. The Company has complied, to the extent applicable, with any
disclosure obligations under Rule 506(e) under the Securities Act. “Covered
Persons” are those persons specified in Rule 506(d)(1) under the Securities Act,
including the Company; any predecessor or affiliate of the Company; any
director, executive officer, other officer participating in the offering,
general partner or managing member of the Company; any beneficial owner of 20%
or more of the Company’s outstanding voting equity securities, calculated on the
basis of voting power; any promoter (as defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of the sale of the
Shares; and any person that has been or will be paid (directly or indirectly)
remuneration for solicitation of purchasers in connection with the sale of the
Shares (a “Solicitor”), any general partner or managing member of any Solicitor,
and any director, executive officer or other officer participating in the
offering of any Solicitor or general partner or managing member of any
Solicitor.

 

4.36      Registration Eligibility.  To the Company’s knowledge, the Company is
eligible to register the resale of the Shares by the Purchasers using Form S-3
promulgated under the Securities Act.

 

12

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4.37      Shell Company Status.  The Company is not, and has never been, an
issuer identified in Rule 144(i)(1).

 

SECTION 5.

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER

 

5.1         The Purchaser represents and warrants to and covenants with the
Company that:

 

(a)           The Purchaser is a validly existing corporation and has all
requisite corporate power and authority to enter into and consummate the
transactions contemplated by the Transaction Documents and to carry out its
obligations hereunder and thereunder, and to invest in the Shares pursuant to
this Agreement.

 

(b)           The Purchaser acknowledges that it can bear the economic risk and
complete loss of its investment in the Shares and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment contemplated hereby. The Purchaser has had an
opportunity to receive, review and understand all information related to the
Company requested by it and to ask questions of and receive answers from the
Company regarding the Company, its business and the terms and conditions of the
offering of the Shares, and has conducted and completed its own independent due
diligence. The Purchaser acknowledges that the Company has made available the
SEC Documents. Based on the information the Purchaser has deemed appropriate,
and without reliance upon any placement agent, it has independently made its own
analysis and decision to enter into the Transaction Documents.  Neither such
inquiries nor any other investigation conducted by or on behalf of the Purchaser
or its representatives or counsel shall modify, amend or affect the Purchaser’s
right to rely on the truth, accuracy and completeness of the SEC Documents, the
Company’s representations and warranties contained in the Transaction Documents
and the Schedule of Exceptions.

 

(c)           The Shares to be received by the Purchaser hereunder will be
acquired for the Purchaser’s own account, not as nominee or agent, and not with
a view to the resale or distribution of any part thereof in violation of the
Securities Act, and the Purchaser has no present intention of selling, granting
any participation in, or otherwise distributing the same in violation of the
Securities Act without prejudice, however, to the Purchaser’s right at all
times, subject to the terms and conditions of the Transaction Documents, to sell
or otherwise dispose of all or any part of such Shares in compliance with
applicable federal and state securities laws. The Purchaser understands that the
Shares are characterized as “restricted securities” under the U.S. federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. Purchaser will not,
directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the securities purchased hereunder except in compliance with the
Securities Act, applicable blue sky laws, the rules and regulations promulgated
thereunder and the terms and conditions of the Voting and Standstill Agreement.

 

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(d)           The Purchaser is an “accredited investor” within the meaning of
Rule 501(a) under the Securities Act.  The Purchaser has determined based on its
own independent review and such professional advice as it deems appropriate that
its purchase of the Shares and participation in the transactions contemplated by
the Transaction Documents (i) are fully consistent with its financial needs,
objectives and condition, (ii) comply and are fully consistent with all
investment policies, guidelines and other restrictions applicable to the
Purchaser, (iii) have been duly authorized and approved by all necessary action,
(iv) do not and will not violate or constitute a default under the Purchaser’s
charter, by-laws or other constituent document or under any law, rule,
regulation, agreement or other obligation by which the Purchaser is bound and
(v) are a fit, proper and suitable investment for the Purchaser, notwithstanding
the substantial risks inherent in investing in or holding the Shares.

 

(e)           The execution, delivery and performance by the Purchaser of the
Transaction Documents have been duly authorized and each has been duly executed
and when delivered will constitute the valid and legally binding obligation of
the Purchaser, enforceable against the Purchaser in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors’ rights generally, (ii) as limited by equitable
principles generally, including any specific performance and (iii) with respect
to the Registration Rights Agreement, as rights to indemnity or contribution may
be limited by state or federal laws or public policy underlying such laws.

 

(f)            The Purchaser is not a broker or dealer registered pursuant to
Section 15 of the Exchange Act (a “registered broker-dealer”) and is not
affiliated with a registered broker dealer.  Purchaser is not party to any
agreement for distribution of any of the Shares.

 

(g)           The Purchaser shall have completed and delivered to the Company no
later than the Closing Date, the Purchaser Questionnaire and the Selling
Stockholder Questionnaire for use in preparation of the Registration Statement
(as such term is defined in the Registration Rights Agreement), and the answers
to the Purchaser Questionnaire and the Selling Stockholder Questionnaire are
true and correct in all material respects as of the date of this Agreement and
will be true and correct as of the Closing Date and the effective date of the
Registration Statement; provided that the Purchaser shall be entitled to update
such information by providing notice thereof to the Company before the effective
date of such Registration Statement.

 

(h)           The Purchaser understands that no United States federal or state
agency, or similar agency of any other country, has reviewed, approved, passed
upon, or made any recommendation or endorsement of the Company or the purchase
of the Shares.

 

(i)            The Purchaser has no present intent to effect a “change of
control” of the Company as such term is understood under the rules promulgated
pursuant to Section 13(d) of the Exchange Act.

 

(j)            The Purchaser has not taken any of the actions set forth in, and
is not subject to, the disqualification provisions of Rule 506(d)(1) of the
Securities Act.

 

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(k)           The Purchaser did not learn of the investment in the Shares as a
result of any general solicitation or general advertising.

 

(l)            The Purchaser’s offices in which its investment decision with
respect to the Shares was made are located at the address immediately below such
Purchaser’s name in Section 12 hereof.

 

(m)          The Purchaser (including any person controlling, controlled by, or
under common control with such Purchaser, as the term “control” is defined
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and its implementing regulations (the “HSR Act”)) in connection with
the consummation of the transactions contemplated by this Agreement will not be
required to and will not complete a filing with the U.S. government pursuant to
the HSR Act.

 

(n)           As of immediately prior to the closing of the transactions
contemplated hereby, neither the Purchaser nor any of its Affiliates
beneficially owns any shares of Common Stock of the Company to the extent such
beneficial ownership would, as a result of the transactions contemplated hereby,
(i) require approval of the Company’s shareholders under NASDAQ Listing
Rule 5635(b) of the transactions contemplated hereby or (ii) result in required
disclosure under Section 13 of the Exchange Act by the Purchaser or any of its
Affiliates of beneficial ownership of shares of Common Stock of the Company in
excess of the Shares.

 

5.2         Other than consummating the transactions contemplated hereunder, the
Purchaser has not, nor has any person acting on behalf of or pursuant to any
understanding with the Purchaser, directly or indirectly executed any purchases
or sales, including all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock) (“Short Sales”), of the
securities of the Company during the period commencing as of the time that the
Purchaser was first contacted by the Company or any other person regarding the
transactions contemplated hereby and ending immediately prior to the Effective
Date.  The Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of
this transaction). Notwithstanding the foregoing, for avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or
preclude any actions, with respect to the identification of the availability of,
or securing of, available shares to borrow in order to effect Short Sales or
similar transactions in the future.

 

5.3         The Purchaser understands that nothing in this Agreement or any
other materials presented to Purchaser in connection with the purchase and sale
of the Shares constitutes legal, tax or investment advice.  The Purchaser has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Shares.

 

5.4         Legends.

 

(a)           The Purchaser understands that in addition to any legend required
under the Voting and Standstill Agreement, until such time as the Shares have
been sold pursuant to the Registration Statement or the Shares may be sold
pursuant to Rule 144 under the Securities Act

 

15

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(“Rule 144”) without any restriction as to the number of securities as of a
particular date that can then be immediately sold, the book entry notations
evidencing the Shares may bear one or more legends in substantially the
following form and substance:

 

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF THE SECURITIES ACT.”

 

In addition, book entry notations representing the Shares may contain:

 

(i)            Any legend required by the blue sky laws of any state to the
extent such laws are applicable to the sale of such Shares hereunder.

 

(ii)           A legend regarding affiliate status of the Purchaser set forth in
Schedule 1 hereto, in the form included therein.

 

(b)           Subject to the restrictions set forth in the Voting and Standstill
Agreement, the Company agrees that at such time as such legend is no longer
required under this Section, it will, following the delivery by the Purchaser to
the Company or the Company’s transfer agent of a certificate representing
Shares, as applicable and if such Shares are certificated, issued with a
restrictive legend, together with such representations and covenants of the
Purchaser or the Purchaser’s executing broker as the Company may reasonably
require in connection therewith, promptly deliver or cause to be delivered to
the Purchaser a book entry position representing such shares that is free from
any legend referring to the Securities Act.  Except with respect to the
restrictions set forth in the Voting and Standstill Agreement, the Company shall
not make any notation on its records or give instructions to any transfer agent
of the Company that enlarge the restrictions on transfer set forth in this
Section.  Certificates for Shares subject to legend removal hereunder shall be
transmitted by the transfer agent of the Company to the Purchaser by crediting
the account of the Purchaser’s prime broker with the Depository Trust Company
(“DTC”).  All costs and expenses related to the removal of the legends and the
reissuance of any Shares shall be borne by the Company; provided, however, that
the Purchaser shall be responsible for the costs of its counsel and advisors.

 

(c)           Subject to the restrictions set forth in the Voting and Standstill
Agreement, the restrictive legend set forth in this section above shall be
removed and the Company shall issue a certificate or book entry position without
such restrictive legend or any other restrictive legend to the holder of the
applicable shares upon which it is stamped or issue to such holder by electronic
delivery with the applicable balance account at DTC or in physical certificated
shares, if appropriate, if (i) such Shares are registered for resale under the
Securities Act (provided that, if the Purchaser is selling pursuant to the
effective registration statement registering the Shares for resale, the
Purchaser agrees to only sell such Shares during such time that such
registration statement is effective and the Purchaser is not aware or has not
been notified by the Company

 

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that such registration statement has been withdrawn or suspended, and only as
permitted by such registration statement); (ii) such Shares are sold or
transferred pursuant to Rule 144 (if the transferor is not an affiliate of the
Company); or (iii) such Shares are eligible for sale without the requirement for
the Company to be in compliance with the current public information required
under Rule 144 as to such securities and without volume or manner-of-sale
restrictions.  Subject to receipt of such representations, and covenants as are
contemplated hereby and subject to the restrictions set forth in the Voting and
Standstill Agreement, following the earlier of (i) the effective date of the
Registration Statement or (ii) Rule 144 becoming available for the resale of the
Shares, without the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to the Shares and without
volume or manner-of-sale restrictions, the Company shall promptly issue to the
Company’s transfer agent, if required by the transfer agent, the instructions
with respect to legend removal consistent with this Section and shall cause its
counsel to deliver any legend removal opinion required by the transfer agent. 
Any fees associated with the issuance of such opinion or the removal of such
legend shall be borne by the Company; provided, however, that the Purchaser
shall be responsible for the costs of its counsel and advisors.

 

5.5         Restricted Securities.  The Purchaser understands that the Shares
are characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Shares may be resold without registration under the Securities Act only in
certain limited circumstances.  In this connection, the Purchaser represents
that it is familiar with Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act.

 

SECTION 6.

CONDITIONS TO COMPANY’S OBLIGATIONS AT THE CLOSING

 

The Company’s obligation to complete the sale and issuance of the Shares and
deliver Shares to the Purchaser at the Closing shall be subject to the following
conditions to the extent not waived by the Company:

 

6.1         Receipt of Payment.  The Company shall have received payment, by
wire transfer of immediately available funds, in the full amount of the purchase
price for the Shares being purchased by the Purchaser at the Closing.

 

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

 

6.3         Receipt of Executed Documents.  The Purchaser shall have executed
and delivered to the Company the Registration Rights Agreement, the Voting and
Standstill Agreement, the Purchaser Questionnaire and the Selling Stockholder
Questionnaire.

 

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SECTION 7.

CONDITIONS TO PURCHASER’S OBLIGATIONS AT THE CLOSING

 

The Purchaser’s obligation to accept delivery of the Shares and to pay for the
Shares shall be subject to the following conditions to the extent not waived by
the Purchaser:

 

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

 

7.2         Receipt of Executed Registration Rights Agreement.  The Company
shall have executed and delivered to the Purchaser the Registration Rights
Agreement.

 

7.3         Receipt of Executed Voting and Standstill Agreement.  The Company
shall have executed and delivered to the Purchaser the Voting and Standstill
Agreement.

 

7.4         Certificate.  The Purchaser shall have received a certificate signed
by the Chief Executive Officer or the Chief Financial Officer to the effect that
the representations and warranties of the Company in Section 4 hereof are true
and correct in all material respects as of, and as if made on, the date of this
Agreement and as of the Closing Date and that the Company has satisfied in all
material respects all of the conditions set forth in this Section 7.

 

7.5         Good Standing.  The Company is validly existing as a corporation in
good standing under the laws of Delaware.

 

7.6         NASDAQ Approval.  The Company shall have filed with NASDAQ a
Notification Form: Listing of Additional Shares for the listing of the Shares
(which shall have been approved by NASDAQ).

 

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

 

7.8         Stop Orders.  No stop order or suspension of trading shall have been
imposed by NASDAQ, the SEC or any other governmental regulatory body with
respect to public trading in the Common Stock.

 

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SECTION 8.

TERMINATION OF OBLIGATIONS TO EFFECT CLOSING; EFFECTS

 

8.1                               The obligations of the Company, on the one
hand, and the Purchaser, on the other hand, to effect the Closing shall
terminate as follows:

 

(a)                                 upon the mutual written consent of the
Company and Purchaser;

 

(b)                                 by the Company if any of the conditions set
forth in Section 6 shall have become incapable of fulfillment, and shall not
have been waived by the Company; or

 

(c)                                  by the Purchaser if any of the conditions
set forth in Section 7 shall have become incapable of fulfillment, and shall not
have been waived by the Purchaser.

 

8.2                               Nothing in this Section 8 shall be deemed to
release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair
the right of any party to compel specific performance by any other party of its
obligations under this Agreement or the other Transaction Documents.

 

SECTION 9.

NO BROKER’S FEES

 

The Company and the Purchaser hereby represent that there are no brokers or
finders entitled to compensation in connection with the sale of the Shares, and
shall indemnify each other for any such fees for which they are responsible.

 

SECTION 10.

ADDITIONAL AGREEMENTS OF THE PARTIES

 

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

 

10.2                        Access to Information. From the date hereof until
the Closing, the Company will make reasonably available to the Purchaser’s
representatives, consultants and their respective counsels for inspection, such
information and documents as the Purchaser reasonably requests, and will make
available at reasonable times and to a reasonable extent officers and employees
of the Company to discuss the business and affairs of the Company.

 

10.3                        Termination of Covenants.  The provisions of
Section 10.1-10.2 shall terminate and be of no further force and effect on the
date on which the Company’s obligations under the Registration Rights Agreement
to register or maintain the effectiveness of any registration covering the
Registrable Securities (as such term is defined in the Registration Rights
Agreement) shall terminate.

 

10.4                        Form D; Blue Sky Filings. The Company agrees to
timely file a Form D with respect to the Shares and to provide a copy thereof,
promptly upon request of the Purchaser. The Company shall take such action as
the Company shall reasonably determine is necessary in order to obtain an
exemption for, or to qualify the Shares for, sale to the Purchaser at the
Closing under

 

19

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applicable securities or “Blue Sky” laws of the states of the United States, and
shall provide evidence of such actions promptly upon request of the Purchaser.

 

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

 

10.6                        Short Sales and Confidentiality After the Date
Hereof. The Purchaser covenants that neither it nor any affiliates acting on its
behalf or pursuant to any understanding with it will execute any Short Sales
during the period from the date hereof until the earlier of such time as
(i) after the transactions contemplated by this Agreement are first publicly
announced or (ii) this Agreement is terminated in full. The Purchaser covenants
that until such time as the transactions contemplated by this Agreement are
publicly disclosed in accordance with Section 10.7, the Purchaser will maintain
the confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction). The
Purchaser understands and acknowledges that the SEC currently takes the position
that coverage of short sales of shares of the Common Stock “against the box”
prior to effectiveness of a resale registration statement with securities
included in such registration statement would be a violation of Section 5 of the
Securities Act, as set forth in Item 239.10 of the Securities Act
Rules Compliance and Disclosure Interpretations compiled by the Office of Chief
Counsel, Division of Corporation Finance.

 

10.7                        Securities Laws Disclosure; Publicity.  By 9:00
a.m., New York City time, on the third (3rd) business day immediately following
the date of this Agreement, each of the Company and the Purchaser shall issue a
press release, in each case, reasonably acceptable to the other party,
disclosing the transactions contemplated hereby.  On or before the fourth
trading day immediately following the execution of this Agreement, the Company
will file a Current Report on Form 8-K (the “8-K”) with the Commission
describing the terms of the Transaction Documents (and including as exhibits to
such Current Report on Form 8-K the agreements required to be filed in
connection therewith).  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of the Purchaser, or include the name of the
Purchaser in any public filing with the Commission or any regulatory agency or
NASDAQ, without the prior written consent of the Purchaser, which consent shall
not be unreasonably withheld, conditioned or delayed, except: (a) as required by
federal securities law in connection with (i) any registration statement
contemplated by the Registration Rights Agreement and (ii) the filing of final
Transaction Documents with the Commission; (b) the filing of a Form D with the
Commission under the Securities Act and (c) to the extent such disclosure is
required by law or NASDAQ regulations, in which case the Company shall provide
the Purchaser with prior notice of such disclosure permitted under this clause
(c). As of the time of the filing of the 8-K, the Purchaser shall not be in
possession of any material, non-public information received from the Company,
any subsidiary of the Company or any of their respective officers, directors,
employees or agents,

 

20

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pursuant to the transactions contemplated by this Agreement that is not
disclosed in the 8-K, press release or other disclosure by the Company that
complies with the requirements of Regulation FD.

 

SECTION 11.
INDEMNIFICATION

 

11.1                        Indemnification by the Company.  The Company agrees
to indemnify and hold harmless the Purchaser and its directors, officers,
shareholders, members, partners, employees and agents, and each Person, if any,
who controls any Purchaser (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners, employees or agents of such controlling
Person (each, a “Purchaser Indemnified Party”), against any losses, claims,
damages, liabilities or expenses, joint or several, to which such Purchaser
Indemnified Party may become subject under the Securities Act, the Exchange Act,
or any other federal or state statutory law or regulation, or at common law
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based in whole or in part on (i) any inaccuracy in the
representations and warranties of the Company contained in this Agreement or
(ii) any failure of the Company to perform its obligations hereunder, and will
reimburse each Purchaser Indemnified Party for legal and other expenses
reasonably incurred as such expenses are reasonably incurred by such Purchaser
Indemnified Party in connection with investigating, defending, settling,
compromising or paying such loss, claim, damage, liability, expense or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, liability or expense arises out of or
is based upon (1) the failure of such Purchaser Indemnified Party to comply with
the covenants and agreements contained in Section 5, Section 6 and Section 10.6
above respecting sale of the Shares, or (2) the inaccuracy of any
representations made by such Purchaser Indemnified Party herein.

 

11.2                        Indemnification by the Purchaser.  The Purchaser
shall indemnify and hold harmless the Company and its directors, officers,
shareholders, members, partners, employees and agents, and each Person, if any,
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners, employees or agents of such controlling Person (each,
a “Company Indemnified Party”) against any losses, claims, damages, liabilities
or expenses to which such Company Indemnified Party may become subject, under
the Securities Act, the Exchange Act, or any other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Purchaser) insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
(i) any failure by the Purchaser to comply with the covenants and agreements
contained in Section 5, Section 6 and Section 10.6 above or (ii) the inaccuracy
of any representation made by the Purchaser herein, and will reimburse such
Company Indemnified Party for any legal and other expense reasonably incurred,
as such expenses are reasonably incurred by such Company Indemnified Party in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action.

 

21

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SECTION 12.

NOTICES

 

All notices, requests, consents and other communications hereunder shall be in
writing, shall be sent by confirmed facsimile or electronic mail, or mailed by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, and shall be deemed given when so sent in the
case of facsimile or electronic mail transmission, or when so received in the
case of mail or courier, and addressed as follows:

 

if to the Company, to:

 

T2 Biosystems, Inc.

101 Hartwell Avenue

Lexington, Massachusetts 02421

Attention: General Counsel

Facsimile: (781) 357-3080

E-Mail:  mgibbs@t2biosystems.com

 

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

 

Latham & Watkins LLP

John Hancock Tower, 27th Floor

Boston, Massachusetts  02116

Attention:                                         Johan V. Brigham

Facsimile:  617.948.6008

E-mail:  Johan.Brigham@lw.com

 

Evan G. Smith

Facsimile:  (617) 948-6001

E-Mail:  evan.smith@lw.com

 

if to the Purchaser, to:

 

Canon, U.S.A., Inc.

One Canon Park

Melville, New York  11747

Attention: Vice President - Legal

Telephone No.: (631) 330-5660

Facsimile No.:  (631) 330-5129

E-Mail: shimelstein@cusa.canon.com

 

with copies (which shall not constitute notice) to:

 

Canon, U.S.A., Inc.

One Canon Park

Melville, New York  11747

Attention: Seymour Liebman, Executive Vice President,
Chief Administrative Officer & General Counsel

 

22

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Telephone No.: (631) 330-5191

Facsimile No.:  (631) 330-5193

E-Mail: sliebman@cusa.canon.com

 

And

 

Greenberg Traurig, LLP

One International Place, Suite 2000

Boston, Massachusetts  02110

Attention:                                         Bradley A. Jacobson

Facsimile:  617.279.8402

E-mail:  jacobsonb@gtlaw.com

 

Elizabeth W. Fraser

Facsimile:  617.279.8427

E-Mail:  frasere@gtlaw.com

 

                 , or to such other person, at such other place or in such
manner as one party shall designate to other party in writing.

 

SECTION 13.

MISCELLANEOUS

 

13.1                        Payment of Fees and Expenses.  Each of the Company
and the Purchaser shall bear its own expenses and legal fees incurred on its
behalf with respect to this Agreement and the transactions contemplated hereby. 
If any action at law or in equity is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorney’s fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

 

13.2                        Waivers and Amendments.  Neither this Agreement nor
any provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the written consent of the Company and the Purchaser.

 

13.3                        Replacement of Shares.  If the Shares are
certificated and any certificate or instrument evidencing any Shares is
mutilated, lost, stolen or destroyed, the Company shall issue or cause to be
issued in exchange and substitution for and upon cancellation thereof, or in
lieu of and substitution therefor, a new certificate or instrument, but only
upon receipt of evidence reasonably satisfactory to the Company and the
Company’s transfer agent of such loss, theft or destruction and the execution by
the holder thereof of a customary lost certificate affidavit of that fact and an
agreement to indemnify and hold harmless the Company and the Company’s transfer
agent for any losses in connection therewith or, if required by the transfer
agent, a bond in such form and amount as is required by the transfer agent.  The
applicants for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs associated with the issuance of such
replacement Shares.  If a replacement certificate or instrument evidencing any
Shares is requested due to a mutilation thereof, the Company may require

 

23

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delivery of such mutilated certificate or instrument as a condition precedent to
any issuance of a replacement.

 

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

 

13.5                        Successors and Assigns.  Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto. This Agreement, or any rights or
obligations hereunder, may not be assigned by either party without the prior
written consent of the other.

 

13.6                        Headings.  The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.

 

13.7                        Severability.  In case any provision contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

 

13.8                        Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.

 

13.9                        Entire Agreement.  This Agreement and other
documents delivered pursuant hereto, including the exhibits and the Schedule of
Exceptions, constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof and thereof.

 

24

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13.10                 Survival.  The representations, warranties, covenants and
agreements made in this Agreement shall survive any investigation made by the
Company or the Purchaser and the Closing.

 

[signature pages follow]

 

25

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.

 

 

COMPANY:

 

 

 

T2 BIOSYSTEMS, INC.

 

 

 

 

 

By:

/s/ John McDonough

 

Name:

John McDonough

 

Title:

President & CEO

 

 

 

 

 

PURCHASER:

 

 

 

CANON U.S.A., INC.

 

 

 

 

 

By:

/s/ Yoroku Adachi

 

Name:

Yoroku Adachi

 

Title:

Chairman & CEO

 

STOCK PURCHASE AGREEMENT

 

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

 

APPENDIX I

 

PURCHASER QUESTIONNAIRE

 

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

 

PURCHASER QUESTIONNAIRE

 

To: T2 Biosystems, Inc.

 

This Purchaser Questionnaire (“Questionnaire”) must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $0.001 per share (the “Securities”), of T2
Biosystems, Inc., a Delaware corporation (the “Corporation”).  The Securities
are being offered and sold by the Corporation without registration under the
Securities Act of 1933, as amended (the “Securities Act”), and the securities
laws of certain states, in reliance on the exemptions contained in
Section 4(a)(2) of the Securities Act and on Regulation D promulgated thereunder
and in reliance on similar exemptions under applicable state laws.  The
Corporation must determine that a potential investor meets certain suitability
requirements before offering or selling the Securities to such investor.  The
purpose of this Questionnaire is to assure the Corporation that each investor
will meet the applicable suitability requirements.  The information supplied by
you will be used in determining whether you meet such criteria, and reliance
upon the private offering exemptions from registration is based in part on the
information herein supplied.

 

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

 

PART A. BACKGROUND INFORMATION

 

Name of Beneficial Owner of the Securities: 

 

Business Address: 

 

City:

State:

Zip Code:

 

Telephone Number:

 

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

 

Type of entity:

 

State of formation:

Approximate Date of formation:

 

Were you formed for the purpose of investing in the securities being
offered?     Yes  o               No  o

 

If an individual:

Residence Address:

 

 

(Number and Street)

 

City:                                   

State:                 

Zip Code:                         

 

 

 

Telephone Number:                                               

 

 

 

 

 

Age:                                    

Citizenship:                              

Where registered to vote:                

 

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

 

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

 

Are you a director or executive officer of the Corporation?       Yes 
o                 No  o

 

Social Security or Taxpayer Identification No.:                             

 

PART B. ACCREDITED INVESTOR QUESTIONNAIRE

 

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

 

o  (1)               A bank as defined in Section 3(a)(2) of the Securities Act,
or any savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity;

 

o  (2)               A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”);

 

o  (3)               An insurance company as defined in Section 2(a)(13) of the
Securities Act;

 

o  (4)               An investment company registered under the Investment
Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that act;

 

o  (5)               A Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;

 

o  (6)               A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;

 

o  (7)               An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;

 

o  (8)               A private business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940;

 

o  (9)               An organization described in Section 501(c)(3) of the
Internal Revenue Code, a corporation, Massachusetts or similar business trust,
or partnership, not formed for the specific purpose of acquiring the Securities,
with total assets in excess of $5,000,000;

 

o  (10)        A trust, with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Securities, whose purchase is directed
by a sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Corporation;

 

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o  (11)        A natural person whose individual net worth, or joint net worth
with that person’s spouse, at the time of his purchase exceeds $1,000,000
(exclusive of the value of that person’s primary residence);

 

o  (12)        A natural person who had an individual income in excess of
$200,000 in each of the two most recent years, or joint income with that
person’s spouse in excess of $300,000, in each of those years, and has a
reasonable expectation of reaching the same income level in the current year;

 

o  (13)        An executive officer or director of the Corporation;

 

o  (14)        An entity in which all of the equity owners qualify under any of
the above subparagraphs. If the undersigned belongs to this investor category
only, list the equity owners of the undersigned, and the investor category which
each such equity owner satisfies.

 

PART C. BAD ACTOR QUESTIONNAIRE

 

1.              During the past ten years, have you been convicted of any felony
or misdemeanor that is related to any securities matter?

 

Yes   o          (If yes, please continue to Question 1.a)

 

No    o          (If no, please continue to Question 2)

 

a)                                     If your answer to Question 1 was “yes”,
was the conviction related to: (i) the purchase or sale of any security;
(ii) the making of any false filing with the Securities and Exchange Commission
(the “SEC”); or (iii) the conduct of an underwriter, broker, dealer, municipal
securities dealer, investment adviser or paid solicitor of purchasers of
securities?

 

Yes  o          No  o

 

2.              Are you subject to any court injunction or restraining order
entered during the past five years that is related to any securities matter?

 

Yes   o          (If yes, please continue to Question 2.a)

 

No    o          (If no, please continue to Question 3)

 

a)                                     If your answer to Question 2 was “yes”,
does the court injunction or restraining order currently restrain or enjoin you
from engaging or continuing to engage in any conduct or practice related to:
(i) the purchase or sale of any security; (ii) the making of any false filing
with the SEC; or (iii) the conduct of an underwriter, broker, dealer, municipal
securities dealer, investment adviser or paid solicitor of purchasers of
securities?

 

Yes  o          No  o

 

3.              Are you subject to any final order(1) of any governmental
commission, authority, agency or officer(2)(2) related to any securities,
insurance or banking matter?

 

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

(1)  A “final order” is defined under Rule 501(g) as a written directive or
declaratory statement issued by a federal or state agency described in
Rule 506(d)(1)(iii) under applicable statutory authority that provides for
notice and an opportunity for a hearing, and that constitutes a final
disposition or action by such federal or state agency.

(2)  You may limit your response to final orders of: (i) state securities
commissions (or state agencies/officers that perform a similar function);
(ii) state authorities that supervise or examine banks, savings associations or
credit unions; (iii) state insurance commissions (or state agencies/officers
that perform a similar function); (iv) federal banking agencies; (v) the U.S.
Commodity Futures Trading Commission; or (vi) the U.S. National Credit Union
Administration.

 

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

 

Yes   o          (If yes, please continue to Question 3.a)

 

No    o          (If no, please continue to Question 4)

 

a)                                     If your answer to Question 3 was “yes”:

 

i)                                   Does the order currently bar you from:
(i) associating with an entity regulated by such commission, authority, agency
or officer; (ii) engaging in the business of securities, insurance or banking;
or (iii) engaging in savings association or credit union activities?

 

Yes  o             No  o

 

ii)                                      Was the order (i) entered within the
past ten years and (ii) based on a violation of any law or regulation that
prohibits fraudulent, manipulative or deceptive conduct?

 

Yes  o             No  o

 

4.              Are you subject to any SEC disciplinary order?(3)(3)

 

Yes   o          (If yes, please continue to Question 4.a)

 

No    o          (If no, please continue to Question 5)

 

a)                                     If your answer to Question 4 was “yes”,
does the order currently: (i) suspend or revoke your registration as a broker,
dealer, municipal securities dealer or investment adviser; (ii) place
limitations on your activities, functions or operations; or (iii) bar you from
being associated with any particular entity or class of entities or from
participating in the offering of any penny stock?

 

5.              Are you subject to any SEC cease and desist order entered within
the past five years?

 

Yes   o          (If yes, please continue to Question 5.a)

 

No    o          (If no, please continue to Question 6)

 

a)                                     If your answer to Question 5 was “yes”,
does the order currently require you to cease and desist from committing or
causing a violation or future violation of (i) any knowledge-based anti-fraud
provision of the U.S. federal securities laws(4) or (ii) Section 5 of the
Securities Act?

 

Yes  o          No  o

 

6.              Have you been suspended or expelled from membership in, or
suspended or barred from association with a member of, a registered national
securities exchange or a registered national or affiliated securities
association?

 

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(3)  You may limit your response to disciplinary orders issued pursuant to
Sections 15(b) or 15B(c) of the Exchange Act or Section 203(e) or (f) of the
Investment Advisers Act of 1940 (the “Advisers Act”).

(4)  Including (but not limited to) Section 17(a)(1) of the Securities Act,
Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Section 15(c)(1) of
the Exchange Act, and Section 206(1) of the Advisers Act or any other rule or
regulation thereunder.

 

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Yes   o          (If yes, please describe the basis of any such suspension or
expulsion and any related details in the space provided under Question 10
below)(5)

 

No    o          (If no, please continue to Question 7)

 

7.              Have you registered a securities offering with the SEC, made an
offering under Regulation A or been named as an underwriter in any registration
statement or Regulation A offering statement filed with the SEC?

 

Yes   o          (If yes, please continue to Question 7.a)

 

No    o          (If no, please continue to Question 8)

 

a)          If your answer to Question 7 was “yes”:

 

i)                                         During the past five years, was any
such registration statement or Regulation A offering statement the subject of a
refusal order, stop order or order suspending the Regulation A exemption?

 

Yes  o          No  o

 

ii)                                      Is any such registration statement or
Regulation A offering statement currently the subject of an investigation or
proceeding to determine whether a stop order or suspension order should be
issued?

 

Yes  o          No  o

 

8.              Are you subject to a U.S. Postal Service false representation
order entered within the past five years?

 

Yes  o          No  o

 

9.              Are you currently subject to a temporary restraining order or
preliminary injunction with respect to conduct alleged by the U.S. Postal
Service to constitute a scheme or device for obtaining money or property through
the mail by means of false representations?

 

Yes  o          No  o

 

10.       In the space provided below, describe any facts or circumstances that
caused you to answer “yes” to any Question (indicating the corresponding
Question number).   Attach additional pages if necessary.

 

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(5)  In providing additional information, please explain whether or not the
suspension or expulsion resulted from “any act or omission to act constituting
conduct inconsistent with just and equitable principles of trade.”

 

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

 

A.

FOR EXECUTION BY AN INDIVIDUAL:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

Date

 

 

 

 

 

 

 

 

 

 

B.

FOR EXECUTION BY AN ENTITY:

 

 

 

 

 

 

 

 

 

Entity Name:

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Date

 

 

 

 

 

 

C.

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

 

 

 

 

 

 

 

Entity Name:

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Date

 

 

 

 

 

 

 

 

 

Entity Name:

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

Date

 

 

 

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

 

APPENDIX II

 

SELLING STOCKHOLDER QUESTIONNAIRE

 

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

 

SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE

 

 

 

 

Name of Selling Stockholder (please print)

 

T2 BIOSYSTEMS, INC.

 

QUESTIONNAIRE FOR SELLING STOCKHOLDERS

 

IMPORTANT:  IMMEDIATE ATTENTION REQUIRED

 

This Questionnaire is being furnished to all persons or entities (the
“Purchasers”) electing to purchase shares of Common Stock (“Common Stock”) of T2
Biosystems, Inc. (the “Company”) pursuant to the Stock Purchase Agreement by and
among the Company and the Purchaser (the “Purchase Agreement”) to which this
Questionnaire is an Appendix.  This Questionnaire relates to certain information
required to be disclosed in the Registration Statement on Form S-3 (the
“Registration Statement”) to be prepared by the Company for filing with the
United States Securities and Exchange Commission (the “SEC”) pursuant to the
Registration Rights Agreement entered into by and among the Company and the
Purchaser (the “Registration Rights Agreement”) in connection with the Purchase
Agreement.  The Company must receive a completed Questionnaire from each
Purchaser in order to include such Purchaser’s shares of Common Stock in the
Registration Statement.

 

The furnishing of accurate and complete responses to the questions posed in this
Questionnaire is an extremely important part of the registration process.  The
inclusion of inaccurate or incomplete disclosures in the Registration Statement
can result in potential liabilities, both civil and criminal, to the Company and
to the individuals who furnish the information.  Accordingly, Purchaser is
advised to consult its own securities law counsel regarding the consequences of
being named or not being named as a selling securityholder in the Registration
Statement and related prospectus.

 

PLEASE GIVE A RESPONSE TO EVERY QUESTION, indicating “None” or “Not Applicable”
where appropriate.  Please complete, sign, and return one copy of this
Questionnaire by facsimile, email or overnight courier as soon as possible.

 

Unless stated otherwise, answers should be given as of the date you complete
this Questionnaire.  However, it is your responsibility to inform us of any
changes that may occur to your situation.  If there is any situation about which
you have any doubt, or if you are uncertain as to the meaning of any terms used
in this Questionnaire, please contact [                      ]

 

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

 

PART I - STOCK OWNERSHIP

 

Item 1.  Beneficial Ownership.

 

a.  Deemed Beneficial Ownership.  Please state the amount of securities of the
Company you own on the date you complete this Questionnaire.  (If none, please
so state in each case.)

 

 

 

Number of Shares of

Amount Beneficially Owned(1)

 

Common Stock Owned

 

 

 

Please state the number of shares owned by you or by family members, trusts and
other organizations with which you have a relationship, and any other shares of
which you may be deemed to be the “beneficial owner”(1):

 

 

 

 

 

Total Shares:

 

 

 

 

 

Of such shares:

 

 

 

 

 

Shares as to which you have sole voting power:

 

 

 

 

 

Shares as to which you have shared voting power:

 

 

 

 

 

Shares as to which you have sole investment power:

 

 

 

 

 

Shares as to which you have shared investment power:

 

 

 

 

 

Shares which you will have a right to acquire before 60 days after the date you
complete this questionnaire through the exercise of options, warrants or
otherwise:

 

 

 

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

 

Do you have any present plans to exercise options or otherwise acquire, dispose
of or to transfer shares of Common Stock of the Company between the date you
complete this Questionnaire and the date which is 60 days after the date in
which the Registration Statement is filed?

 

Answer:

 

If so, please describe.

 

b.                                      Pledged Securities.  If any of such
securities have been pledged or otherwise deposited as collateral or are the
subject matter of any voting trust or other similar agreement or of any contract
providing for the sale or other disposition of such securities, please give the
details thereof.

 

Answer:

 

c.                                       Disclaimer of Beneficial Ownership.  Do
you wish to disclaim beneficial ownership(1) of any of the shares reported in
response to Item 1(a)?

 

Answer:

 

If the answer is “Yes”, please furnish the following information with respect to
the person or persons who should be shown as the beneficial owner(s)(1) of the
shares in question.

 

Name and Address of

 

Relationship of

 

Number of Shares

Actual Beneficial Owner

 

Such Person To You

 

Beneficially Owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

d.                                      Shared Voting or Investment Power over
Securities.  Will any person be deemed to have beneficial ownership over any of
the Securities purchased by you pursuant to the Purchase Agreement?

 

Answer:

 

If the answer is “Yes”, please furnish the following information with respect to
the person or persons who should be shown as the beneficial owner(s)(1) of the
Securities in question.

 

Name and Address of

 

Relationship of

 

Number of Shares

Beneficial Owner

 

Such Person To You

 

Beneficially Owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Item 2.  Major Shareholders.  Please state below the names of persons or groups
known by you to own beneficially(1) more than 5% of the Company’s Common Stock.

 

Answer:

 

Item 3.  Change of Control.  Do you know of any contractual arrangements,
including any pledge of securities of the Company, the operation of which may at
a subsequent date result in a change of control of the Company?

 

Answer:

 

Item 4.  Relationship with the Company.  Please state the nature of any
position, office or other material relationship you have, or have had within the
past three years, with the Company or its affiliates.

 

 

 

Nature of

Name

 

Relationship

 

 

 

 

 

 

 

 

 

 

Item 5.  Broker-Dealer Status.  Is the Purchaser a broker-dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)?

 

o Yes.

 

o No.

 

If so, please answer the remaining questions under this Item 5.

 

Note that the Company will be required to identify any registered broker-dealer
as an underwriter in the Registration Statement and related prospectus.

 

a.                                      If the Purchaser is a registered
broker-dealer, please indicate whether the Purchaser purchased its Common Stock
for investment or acquired them as transaction-based compensation for investment
banking or similar services.

 

Answer:

 

Note that if the Purchaser is a registered broker-dealer and received its Common
Stock other than as transaction-based compensation, the Company is required to
identify the Purchaser as an underwriter in the Registration Statement and
related prospectus.

 

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

 

b.                                      Is the Purchaser an affiliate of a
registered broker-dealer? For purposes of this Question, an “affiliate” of a
specified person or entity means a person or entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, the person or entity specified.

 

o Yes.

 

o No.

 

If so, please answer questions (i)-(iii) below under this Item 5(b).

 

i.                                          Please describe the affiliation
between the Purchaser and any registered broker-dealers:

 

ii.                                       If the Common Stock was received by
the Purchaser other than in the ordinary course of business, please describe the
circumstances:

 

iii.                                    If the Purchaser, at the time of its
receipt of Common Stock, has had any agreements or understandings, directly or
indirectly, with any person to distribute                      the Common Stock,
please describe such agreements or understandings:

 

Note that if the Purchaser is an affiliate of a broker-dealer and did not
receive its Common Stock in the ordinary course of business or at the time of
receipt had any agreements or understandings, directly or indirectly, to
distribute the securities, the Company must identify the Purchaser as an
underwriter in the Registration Statement and related prospectus.

 

Item 6.  Nature of Beneficial Holding.  The purpose of this question is to
identify the ultimate natural person(s) or publicly held entity that
exercise(s) sole or shared voting or dispositive power over the Registrable
Securities (as defined in the Registration Rights Agreement).

 

a.                                      Is the Purchaser a natural person?

 

o Yes.

 

o No.

 

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

 

b.                                      Is the Purchaser required to file, or is
it a wholly owned subsidiary of a company that is required to file, periodic and
other reports (for example, Form 10-K, 10-Q, 8-K) with the SEC pursuant to
Section 13(a) or 15(d) of the Exchange Act?

 

o Yes.

 

o No.

 

c.                                       Is the Purchaser an investment company,
or a subsidiary of an investment company, registered under the Investment
Company Act of 1940, as amended?

 

o Yes.

 

o No.

 

If a subsidiary, please identify the publicly held parent entity:

 

d.                                      If you answered “no” to questions (a),
(b) and (c) above, please identify the controlling person(s) of the Purchaser
(the “Controlling Entity”). If the Controlling Entity is not a natural person or
a publicly held entity, please identify each controlling person(s) of such
Controlling Entity. This process should be repeated until you reach natural
persons or a publicly held entity that exercises sole or shared voting or
dispositive power over the Registrable Securities:

 

***PLEASE NOTE THAT THE SEC REQUIRES THAT THESE NATURAL PERSONS BE NAMED IN THE
PROSPECTUS***

 

PART II - CERTAIN TRANSACTIONS

 

Item 7.  Transactions with the Company.  If you, any of your associates(2), or
any member of your immediate family(3) had or will have any direct or indirect
material interest in any transactions(4) or series of transactions to which the
Company or any of its subsidiaries was a party at any time since January 1,
2015, or in any currently proposed transactions or series of transactions in
which the Company or any of its subsidiaries will be a party, in which the
amount involved exceeds $120,000, please specify (a) the names of the parties to
the transaction(s) and their relationship to you, (b) the nature of the interest
in the transaction, (c) the amount involved in the transaction, and (d) the
amount of the interest in the transaction.  If the answer is “none”, please so
state.

 

Answer:

 

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

 

Item 8.  Third Party Payments.  Please describe any compensation paid to you by
a third party pursuant to any arrangement between the Company and any such third
party.

 

Answer:

 

PART III — PLAN OF DISTRIBUTION

 

The selling stockholder and any of its pledgees, donees, transferees, assignees
or other successors-in-interest may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions.  These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the time
of sale, or at negotiated prices.  The selling stockholder may use one or more
of the following methods when disposing of the shares or interests therein:

 

·                  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;

 

·                  through brokers, dealers or underwriters that may act solely
as agents;

 

·                  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;

 

·                  through the writing or settlement of options or other hedging
transactions entered into after the effective date of the registration statement
of which this prospectus is a part, whether through an options exchange or
otherwise;

 

·                  broker-dealers may agree with the selling stockholder to sell
a specified number of such shares at a stipulated price per share;

 

·                  one or more underwritten offerings on a firm commitment or
best efforts basis;

 

·                  a combination of any such methods of disposition; and

 

·                  any other method permitted pursuant to applicable law.

 

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

 

The selling stockholder may also sell shares under Rule 144 under the Securities
Act of 1933, as amended, or Securities Act, if available, rather than under this
prospectus.

 

Broker-dealers engaged by the selling stockholder may arrange for other
broker-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the selling stockholder (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The selling stockholder does not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

 

The selling stockholder may from time to time pledge or grant a security
interest in some or all of the shares of common stock owned by its and, if it
defaults in the performance of its secured obligations, the pledgees or secured
parties may offer and sell shares of common stock from time to time under this
prospectus, or under a supplement or amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list
of selling stockholders to include the pledgee, transferee or other successors
in interest as selling stockholders under this prospectus.

 

Upon being notified in writing by the selling stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of common
stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, we will file a
supplement to this prospectus, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of such selling stockholder and of the
participating broker-dealer(s), (ii) the number of shares involved, (iii) the
price at which such shares of common stock were sold, (iv) the commissions paid
or discounts or concessions allowed to such broker-dealer(s), where applicable,
(v) that such broker-dealer(s) did not conduct any investigation to verify the
information set out or incorporated by reference in this prospectus, and (vi)
other facts material to the transaction.  In addition, upon being notified in
writing by the selling stockholder that a donee or pledge intends to sell more
than 500 shares of common stock, we will file a supplement to this prospectus if
then required in accordance with applicable securities law.

 

The selling stockholder also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.

 

In connection with the sale of the shares of common stock or interests in shares
of common stock, the selling stockholder may enter into hedging transactions
after the effective date of the registration statement of which this prospectus
is a part with broker-dealers or other financial institutions, which may in turn
engage in short sales of the common stock in the course of hedging the positions
they assume.  The selling stockholder may also sell shares of common stock short
after the effective date of the registration statement of which this prospectus
is a part and deliver these securities to close out their short positions, or
loan or pledge the common stock to broker-dealers that in turn may sell these
securities.  The selling stockholder may also enter into option or other
transactions after the effective date of the registration statement of which
this prospectus is a part with broker-dealers or other financial institutions or
the creation of one or more derivative securities which require the delivery to
such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other

 

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

 

financial institution may resell pursuant to this prospectus (as supplemented or
amended to reflect such transaction).

 

The selling stockholder and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales.  In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.  The maximum commission or discount to be
received by any member of the Financial Industry Regulatory Authority (FINRA) or
independent broker-dealer will not be greater than 8% of the initial gross
proceeds from the sale of any security being sold.

 

We have advised the selling stockholder that it is required to comply with
Regulation M promulgated under the Securities Exchange Act during such time as
it may be engaged in a distribution of the shares.  The foregoing may affect the
marketability of the common stock.

 

The aggregate proceeds to the selling stockholder from the sale of the common
stock offered by it will be the purchase price of the common stock less
discounts or commissions, if any.  The selling stockholder reserves the right to
accept and, together with its agents from time to time, to reject, in whole or
in part, any proposed purchase of common stock to be made directly or through
agents.  We will not receive any of the proceeds from this offering.

 

We are required to pay all fees and expenses incident to the registration of the
shares.  We have agreed to indemnify the selling stockholder against certain
losses, claims, damages and liabilities, including liabilities under the
Securities Act or otherwise.

 

We have agreed with the selling stockholder to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of (a)
such time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement, and (b) the date
on which the shares of common stock covered by this prospectus may be sold by
non-affiliates without any volume or manner of sale restrictions or current
public information pursuant to Rule 144 of the Securities Act.

 

*         *         *

 

The undersigned has reviewed the Plan of Distribution set forth above and does
not have a present intention of effecting a sale in a manner not described
therein.

 

 

o

Agree

o

Disagree

 

 

 

(If left blank, response will be deemed to be “Agree”.)

 

 

The undersigned hereby represents that the undersigned understands, pursuant to
Securities Act Sections Compliance and Disclosure Interpretations Section
239.10, a copy of which is attached hereto as Exhibit 1, that the undersigned
may not make any short sale of the Common Stock prior to the effectiveness of
the Registration Statement, and further covenants to the Company that the
undersigned will not engage in any short sales of such stock to be registered
under the Registration Statement prior to its effectiveness.

 

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

 

SIGNATURE

 

The undersigned understands that the Company anticipates filing the Registration
Statement within the time frame set forth in the Registration Rights Agreement. 
If at any time any of the information set forth in my responses to this
Questionnaire has materially changed due to passage of time (other than due to
the receipt of the Common Stock set forth opposite the undersigned’s name in the
Schedule of Purchasers in the Purchase Agreement), or any development occurs
which requires a change in any of my answers, or has for any other reason become
incorrect, the undersigned agrees to furnish as soon as practicable to the
individual to whom a copy of this Questionnaire is to be sent, as indicated and
at the address shown on the first page hereof, any necessary or appropriate
correcting information.  Otherwise, the Company is to understand that the above
information continues to be, to the best of my knowledge, information and
belief, complete and correct.

 

Upon any sale of Common Stock pursuant to the Registration Statement, the
undersigned hereby agrees to deliver to the Company and the Company’s transfer
agent the Certificate of Subsequent Sale set forth in Exhibit I hereto.

 

The undersigned understands that the information that the undersigned is
furnishing to the Company herein will be used by the Company in the preparation
of the Registration Statement.

 

 

 

Name of Purchaser:

 

 

 

 

 

 

 

Date:                                   , 2016

 

Signature:

 

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

 

 

 

Title (if applicable):

 

 

 

 

 

 

 

 

 

Address:

 

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

 

FOOTNOTES

 

1.                    Beneficial Ownership.  You are the beneficial owner of a
security, as defined in Rule 13d-3 under the Securities Exchange Act of 1934
(the “Exchange Act”), if you, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise have or share: (1) voting
power, which includes the power to vote, or to direct the voting of, such
security, and/or (2) investment power, which includes the power to dispose, or
to direct the disposition of, such security.  You are also the beneficial owner
of a security if you, directly or indirectly, create or use a trust, proxy,
power of attorney, pooling arrangement or any other contract, arrangement or
device with the purpose or effect of divesting yourself of beneficial ownership
of a security or preventing the vesting of such beneficial ownership.

 

You are deemed to be the beneficial owner of a security if you have the right to
acquire beneficial ownership of such security at any time within 60 days
including, but not limited to, any right to acquire such security (a) through
the exercise of any option, warrant or right, (b) through the conversion of a
security, or (c) pursuant to the automatic termination of, or the power to
revoke a trust, discretionary account, or similar arrangement.

 

Ordinarily, shares held in the name of your spouse or minor child should be
considered as beneficially owned by you absent special circumstances to indicate
that you do not have, as a practical matter, voting power or investment power
over such shares.  Similarly, absent countervailing facts, securities held in
the name of relatives who share your home are to be reported as being
beneficially owned by you.  In addition, securities held for your benefit in the
name of others, such as nominees, trustees and other fiduciaries, securities
held by a partnership of which you are a partner, and securities held by a
corporation controlled by you should be regarded as beneficially owned by you.

 

This definition of beneficial ownership is very broad; therefore, even though
you may not actually have or share voting or investment power with respect to
securities owned by persons in your family or living in your home, you should
include such shares in your beneficial ownership disclosure and may then
disclaim beneficial ownership of such securities.

 

2.                    Associate.  The term “associate”, as defined in Rule 14a-1
under the Exchange Act, means (a) any corporation or organization (other than
the Company or any of its majority owned subsidiaries) of which you are an
officer or partner or are, directly or indirectly, the beneficial owner of 10%
or more of any class of equity securities, (b) any trust or other estate in
which you have a substantial beneficial interest or as to which you serve as
trustee or in a similar capacity, and (c) your spouse, or any relative of yours
or relative of your spouse living in your home or who is a director or officer
of the Company or of any subsidiary.  The term “relative of yours” as used in
this Questionnaire refers to any relative or spouse of yours, or any relative of
such spouse, who has the same home as you or who is a director or officer of any
subsidiary of the Company.

 

Please identify your associate referred to in your answer and indicate your
relationship.

 

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

 

3.                    Immediate Family.  The members of your “immediate family”
are deemed to include the following:  your spouse; your parents; your children;
your siblings; your mother-in-law or father-in-law; your sons- and
daughters-in-law; and your brothers- and sisters-in-law.

 

4.                    Transactions.  The term “transaction” is to be understood
in its broadest sense, and includes the direct or indirect receipt of anything
of value.  Please note that indirect as well as direct material interests in
transactions are to be disclosed.  Transactions in which you would have a direct
interest would include your purchasing or leasing anything (stock in a business
acquired by the Company, office space, plants, Company apartments, computers,
raw materials, finished goods, etc.) from or selling or leasing anything to, or
borrowing or lending cash or other property from or to, the Company, or any
subsidiary.

 

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

 

Exhibit 1

 

Securities Act Sections Compliance and Disclosure Interpretations Section
239.10: “An issuer filed a Form S-3 registration statement for a secondary
offering of common stock which is not yet effective.  One of the selling
shareholders wanted to do a short sale of common stock “against the box” and
cover the short sale with registered shares after the effective date.  The
issuer was advised that the short sale could not be made before the registration
statement becomes effective, because the shares underlying the short sale are
deemed to be sold at the time such sale is made.  There would, therefore, be a
violation of Section 5 if the shares were effectively sold prior to the
effective date.”

 

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

 

Exhibit I

 

CERTIFICATE OF SUBSEQUENT SALE

 

American Stock Transfer & Trust Company, LLC

 

RE:                           Sale of Shares of Common Stock of T2 Biosystems,
Inc. (the “Company”) pursuant to the Company’s Prospectus dated
                             ,             (the “Prospectus”)

 

Dear Sir/Madam:

 

The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Stockholders in the
Prospectus, that the undersigned has sold the shares pursuant to the Prospectus
and in a manner described under the caption “Plan of Distribution” in the
Prospectus and that such sale complies with all securities laws applicable to
the undersigned, including, without limitation, the Prospectus delivery
requirements of the Securities Act of 1933, as amended.

 

Selling Stockholder (the beneficial owner):

 

 

 

 

 

Record Holder (e.g., if held in name of nominee):

 

 

 

 

 

Book Entry Position or Restricted Stock Certificate No.(s):

 

 

 

 

 

Number of Shares Sold:

 

 

 

 

 

Date of Sale:

 

 

In the event that you receive a stock certificate(s) or evidence of a book entry
position representing more shares of Common Stock than have been sold by the
undersigned, then you should return to the undersigned a newly issued
certificate or book entry position for such excess shares in the name of the
Record Holder and BEARING A RESTRICTIVE LEGEND.  Further, you should place a
stop transfer on your records with regard to such certificate.  Notwithstanding
the foregoing, in the event that the undersigned executes and delivers to you
and to the Company the certification set forth on Annex I, upon instructions
from the Company, you should return to the undersigned a newly issued
certificate or book entry position for such excess shares of Common Stock in the
name of the Record Holder without any restrictive legend.  In addition, no
subsequent certification will be required to be delivered to you by the

 

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

 

undersigned provided that the representations and warranties set forth on Annex
I have been delivered to you and continue to be accurate.

 

 

 

Very truly yours,

 

 

 

 

 

 

Dated:

 

 

By:

 

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

cc:                                T2 Biosystems, Inc.

101 Hartwell Avenue

Lexington, Massachusetts 02421

Attention: General Counsel

 

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

 

Annex I

 

In connection with any excess shares to be returned to the Selling Stockholder
upon a sale of shares of Common Stock of T2 Biosystems, Inc. (the “Company”)
included in the table of Selling Stockholders in the Prospectus, the undersigned
hereby certifies to the Company and American Stock Transfer & Trust Company,
LLC, that:

 

1.                                      In connection with the sale by the
undersigned stockholder of any of the shares of Common Stock pursuant to the
Prospectus, the undersigned stockholder will deliver a copy of the Prospectus
included in the Registration Statement to the purchaser directly or through the
undersigned stockholder’s broker-dealer in compliance with the requirements of
the Securities Act of 1933 and the Securities Exchange Act of 1934.

 

2.                                      Any such sale will be made only in the
manner described under “Plan of Distribution” in the Prospectus.

 

3.                                      The undersigned stockholder will only
sell the shares of Common Stock while the Registration Statement is effective,
unless another exemption from registration is available.

 

4.                                      The Company and its attorneys may rely
on this letter to the same extent as if it were addressed to them.

 

5.                                      The undersigned stockholder agrees to
notify you immediately of any development or occurrence which to his, her or its
knowledge would render any of the foregoing representations and agreements
inaccurate.

 

All terms not defined herein are as defined in the Stock Purchase Agreement
entered into in September 2016 among the Company and the Purchaser.

 

 

 

 

Very truly yours,

 

 

 

 

 

 

Dated:

 

 

By:

 

 

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

 

 

 

Title:

 

 

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APPENDIX III

 

REGISTRATION RIGHTS AGREEMENT

 

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APPENDIX IV

 

VOTING AND STANDSTILL AGREEMENT

 

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SCHEDULE OF EXCEPTIONS

September 21, 2016

 

This Schedule of Exceptions is being furnished by T2 Biosystems, Inc., a
Delaware corporation, (the “Company”), to the Purchaser party to that certain
Stock Purchase Agreement of even date herewith by and among the Company and such
Purchaser (the “Agreement”) in connection with the execution and delivery of the
Agreement, pursuant to Section 4 of the Agreement.  Unless the context otherwise
requires, all capitalized terms used in this Schedule of Exceptions shall have
the respective meanings ascribed to such terms in the Agreement.

 

This Schedule of Exceptions and the information, descriptions and disclosures
included herein is intended to set forth exceptions to the representations and
warranties of the Company contained in the Agreement.  The contents of all
agreements and other documents referred to in a particular section of this
Schedule of Exceptions are incorporated by reference into such particular
section as though fully set forth in such section.

 

Section 4.6

 

Capitalization

 

Certain Company stockholders were granted registration rights pursuant to that
Fourth Amended and Restated Investors’ Rights Agreement, dated as of March 22,
2013, as amended, filed as Exhibit 4.2 to that certain Amendment No. 2 to Form
S-1 filed with the Commission on July 28, 2014.

 

Section 4.9

 

No Default or Consents

 

Section 3.2(c) of the Loan and Security Agreement, dated as of July 11, 2014,
with Solar Capital Ltd. as collateral agent, and the lenders party thereto,
filed as Exhibit 10.19 to that certain Amendment No. 1 to Form S-1 filed with
the Commission on July 16, 2014, as amended (the “Solar Agreement”), contains a
subjective acceleration clause whereby an event of default and immediate
acceleration of all amounts owed thereunder occurs if the Company experiences a
material adverse change in the business, operations or condition (financial or
otherwise) or a material impairment of the prospect of repayment of any portion
of the obligations thereunder.

 

The following documents contain a cross-default provision pursuant to which an
event of default under the Solar Agreement may entitle the lender to declare an
event of default and acceleration of all amounts owed to such lender thereunder:

 

·                  Section 7.11 of the Promissory Note, dated May 9, 2011,
issued by the Company to Massachusetts Development Finance Agency, filed as
Exhibit 10.18 to that certain Form S-1 filed with the Commission on July 2, 2014

 

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·                  Section 8.6 of the Loan and Security Agreement, dated as of
August 30, 2007, with Silicon Valley Bank, filed as Exhibit 10.15 to that
certain Form S-1 filed with the Commission on July 2, 2014

 

Section 4.15

 

Compliance with Continued NASDAQ Listing Requirements

 

On August 31, 2016, Harry Wilcox resigned as a member of the Board and the Audit
Committee of the Board.  As a result the Audit Committee currently has two
members.

 

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SCHEDULE 1

 

Form of Affiliate Legend

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE HELD BY AN AFFILIATE OF THE
ISSUER AS DEFINED IN RULE 144 PROMULGATED UNDER THE SECURITIES ACT OF 1933 AND
MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE WITH THE REQUIREMENTS OF
RULE 144 OR PURSUANT TO A REGISTRATION STATEMENT UNDER SAID ACT OR AN EXEMPTION
FROM SUCH REGISTRATION.”

 

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