Exhibit 10.1

 

EXECUTION COPY

 

SECURITIES PURCHASE AND EXCHANGE AGREEMENT

 

This Securities Purchase and Exchange Agreement (this “Agreement”) is dated as
of January 10, 2020, by and among Interpace Biosciences, Inc., a Delaware
corporation (the “Company”), 1315 Capital II, L.P., a Delaware limited
partnership (including its successors and assigns, “1315 Capital”) and Ampersand
2018 Limited Partnership, a Delaware limited partnership (including its
successors and assigns, “Ampersand” and, together with 1315 Capital, the
“Purchasers” and each a “Purchaser”).

 

RECITALS

 

A. The Company and the Purchasers are executing and delivering this Agreement in
reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and
Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States
Securities and Exchange Commission (the “Commission”).

 

B. The Company has authorized a new series of convertible preferred stock of the
Company designated as Series B Convertible Preferred Stock, par value $0.01 per
share (the “Series B Shares”), the terms of which are set forth in the
certificate of designations, preferences and rights for such Series B Shares,
substantially in the form attached hereto as Exhibit A (the “Certificate of
Designation”).

 

C. Each Purchaser wishes to purchase, and the Company wishes to sell, upon the
terms and subject to the conditions stated in this Agreement, that number of
Series B Shares as set forth next to such Purchaser’s name on Schedule I (the
“New Investment Shares”).

 

D. Ampersand desires to exchange (the “Exchange”) all of its 270 shares of the
Company’s Series A Convertible Preferred Stock, par value $0.01 per share (the
“Series A Shares”), representing all issued and outstanding Series A Shares of
the Company, for that number of Series B Shares as set forth next to Ampersand’s
name on Schedule II (the “Exchange Shares”). The Exchange is intended to be
treated as a recapitalization under Section 368 of the Internal Revenue Code of
1986, as amended, including the regulations and published interpretations
thereunder (the “Code”).

 

E. The Series B Shares shall be convertible into shares of the Company’s common
stock, par value $0.01 per share (the “Common Stock”), in accordance with the
terms of the Certificate of Designation, at a conversion price of $0.60 per
share of Common Stock, subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization
affecting such shares (the shares of Common Stock issued or issuable upon
conversion of any Preferred Shares, being the “Conversion Shares”). The
Preferred Shares and the Conversion Shares are referred to herein as the
“Securities.”

 

F. At the Closing, the parties hereto shall execute and deliver an Amended and
Restated Investor Rights Agreement, substantially in the form attached hereto as
Exhibit B (with such changes as the parties may mutually agree, the “Investor
Rights Agreement”), pursuant to which, among other things, the Company will
agree to provide certain registration rights with respect to the Conversion
Shares under the Securities Act and the rules and regulations promulgated
thereunder and applicable state securities laws and to provide the Purchasers
with certain preemptive and board representation rights among other rights.

 

  

 

 

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 Purchasers hereby
agree as follows:

 

Article I
DEFINITIONS

 

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms shall have the meanings
indicated in this Section 1.1:

 

“1315 Capital” has the meaning set forth in the Preamble.

 

“2018 Form 10-K” means the Company’s Form 10-K for the fiscal year ended
December 31, 2018 as filed with the Commission on March 21, 2019.

 

“2020 Annual Meeting” means the 2020 annual meeting of the Company’s
stockholders.

 

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, Controls, is controlled by or
is under common control with such Person, as such terms are used in and
construed under Rule 405 under the Securities Act; provided, however, (i) the
Company and its Subsidiaries shall not be deemed to be Affiliates of the
Purchasers or their Affiliates, and (ii) with respect to a Purchaser, any
investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate
of the Purchaser.

 

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

 

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

 

“Applicable Laws” has the meaning set forth in Section 3.1(ww).

 

“Authorizations” has the meaning set forth in Section 3.1(ww).

 

“Balance Sheet Date” has the meaning set forth in Section 3.1(b).

 

Any Person shall be deemed to “beneficially own”, to have “beneficial ownership”
of, or to be “beneficially owning” any securities (which securities shall also
be deemed “beneficially owned” by such Person) that such Person is deemed to
“beneficially own” within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act; provided that any Person shall be deemed to beneficially own any
securities that such Person has the right to acquire, whether or not such right
is exercisable immediately (including assuming conversion of all Preferred
Shares, if any, owned by such Person to Common Stock).

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except Saturday, Sunday, any day which is a federal
legal holiday in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other governmental
action to close.

 

“Capitalization Date” has the meaning set forth in Section 3.1(i).

 

“Certificate of Designation” has the meaning set forth in the Recitals.

 

“Closing” means the closing of the purchase and sale of the Preferred Shares
listed in Schedule I, attached hereto, pursuant to this Agreement.

 

“Closing Date” means the date on which when all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all of
the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied
or waived, as the case may be, or such other date as the parties may agree.

 

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“Closing Subscription Amount” means, with respect to each Purchaser, the
aggregate amount to be paid for the New Investment Shares purchased hereunder at
the Closing as indicated on Schedule I attached hereto under the heading
“Closing Subscription Amount” in United States dollars and in immediately
available funds.

 

“Code” has the meaning set forth in the Recitals.

 

“Commission” has the meaning set forth in the Recitals.

 

“Common Stock” has the meaning set forth in the Recitals.

 

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

 

“Company Counsel” means Pepper Hamilton LLP, with offices located at 620 Eighth
Avenue, 37th Floor, New York, NY 10018-1405.

 

“Company Organizational Documents” means the Certificate of Incorporation, as
amended, of the Company and the Amended and Restated Bylaws, as amended, of the
Company, in each case, as in effect on the date of this Agreement.

 

“Company Preferred Stock” has the meaning set forth in Section 3.1(i).

 

“Company Securities” has the meaning set forth in Section 3.1(j).

 

“Company Stock Plans” has the meaning set forth in Section 3.1(k).

 

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

 

“Conversion Shares” has the meaning set forth in the Recitals, and also includes
any securities into which the Conversion Shares may hereafter be reclassified or
changed.

 

“Delaware Courts” means the state and federal courts sitting in the City of
Wilmington in the State of Delaware.

 

“DTC” has the meaning set forth in Section 4.1(b).

 

“Employee Benefit Laws” has the meaning set forth in Section 3.1(bb).

 

“Environmental Laws” has the meaning set forth in Section 3.1(f).

 

“Equity Interests” means (i) any capital stock, share, partnership or membership
interest, unit of participation or other similar interest (however designated)
in any Person or any securities or obligations convertible into or exchangeable
for any of the foregoing and (ii) any option, warrant, purchase right,
conversion right, exchange right or other contractual obligation which would
entitle any Person to share in the equity, profit, earnings, losses or gains of
such Person (including stock appreciation, phantom stock, profit participation
or other similar rights).

 

“ERISA” has the meaning set forth in Section 3.1(bb).

 

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“Exchange” has the meaning set forth in the Recitals.

 

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

 

“Exchange Shares” has the meaning set forth in the Recitals.

 

“FCPA” has the meaning set forth in Section 3.1(gg).

 

“FDA” has the meaning set forth in Section 3.1(pp).

 

“Filed SEC Reports” has the meaning set forth in Section 3.1(a).

 

“Governmental Approval” has the meaning set forth in Section 4.7(b).

 

“Governmental Entity” means any United States or non-United States (i) federal,
national, regional, state, provincial, local, municipal or other government,
(ii) governmental or quasi-governmental entity of any nature (including any
governmental agency, branch, department, official, or entity, any
self-regulatory authority, public utility and any supra-national organization,
state, county, city or other political subdivision and any court or other
tribunal) or (iii) body exercising or entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature, including any public arbitral tribunal, arbitrator or
mediator.

 

“Government Program” means any “federal health care program” as defined in 42
U.S.C. § 1320a-7b(f), including Medicare, state Medicaid programs, state CHIP
programs, TRICARE and similar or successor programs with or for the benefit of
any Governmental Entity.

 

“Grant Date” has the meaning set forth in Section 3.1(k).

 

“Hazardous Materials” has the meaning set forth in Section 3.1(f).

 

“Health Care Laws” has the meaning set forth in Section 3.1(pp).

 

“HIPAA” has the meaning set forth in Section 3.1(pp).

 

“Intellectual Property” has the meaning set forth in Section 3.1(w).

 

“Investment Company Act” has the meaning set forth in Section 3.1(p).

 

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

 

“Legal Proceeding” means any judicial, administrative or arbitral actions,
suits, claims, investigations or proceedings (public or private), whether for
condemnation or otherwise, by or before a Governmental Entity or arbitrator.

 

“Material Adverse Effect” has the meaning set forth in Section 3.1(d).

 

“Material Contract” means any contract or other agreement of the Company that
has been filed or was required to have been filed as an exhibit to the SEC
Reports pursuant to Item 601(b)(1), Item 601(b)(2), Item 601(b)(3), Item
601(b)(4) or Item 601(b)(10) of Regulation S-K.

 

“Money Laundering Laws” has the meaning set forth in Section 3.1(ff).

 

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“New Investment Shares” has the meaning set forth in the Recitals.

 

“OFAC” has the meaning set forth in Section 3.1(ee).

 

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

 

“Preferred Shares” means the Series B Shares, and also includes any securities
into which the Series B Shares may hereafter be reclassified or changed.

 

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

 

“Private Programs” means any private non-governmental program, including any
private insurance program, in which the Company participates or has participated
or from which the Company receives or has received payments or reimbursements.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

 

“Product” has the meaning set forth in Section 3.1(pp).

 

“Purchaser” or “Purchasers” has the meaning set forth in the Preamble.

 

“Purchaser Covered Person” has the meaning set forth in Section 3.2(n)(i).

 

“Regulation D” has the meaning set forth in the Recitals.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

 

“SEC Reports” has the meaning set forth in Section 3.1(a).

 

“Secretary’s Certificate” has the meaning set forth in Section 2.2(a)(iv).

 

“Securities” has the meaning set forth in the Recitals.

 

“Securities Act” has the meaning set forth in the Recitals.

 

“Series A Shares” has the meaning set forth in the Recitals.

 

“Series B Shares” has the meaning set forth in the Recitals.

 

“Stock Options” has the meaning set forth in Section 3.1(k).

 

“Subsidiaries” has the meaning set forth in Section 3.1(nn).

 

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

 

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“Transaction Documents” means this Agreement, the exhibits attached hereto, the
Investor Rights Agreement and any other documents or agreements for the Closing
explicitly contemplated hereunder and thereunder.

 

“Transaction Litigation” has the meaning set forth in Section 4.9.

 

“Transfer Agent” means American Stock Transfer and Trust Company, LLC, the
current transfer agent of the Company, with a mailing address of 6201 15th
Avenue, Brooklyn, New York 11219, and a telephone number of (718) 921-8200, or
any successor transfer agent for the Company.

 

“U.S. GAAP” means U.S. generally accepted accounting principles, as applied by
the Company.

 

Article II
PURCHASE AND SALE; EXCHANGE

 

2.1 Closing.

 

(a) Issuance of New Investment Shares. Subject to the terms and conditions set
forth in this Agreement, at the Closing, the Company shall issue and sell to
each Purchaser, and each Purchaser shall purchase from the Company, such number
of New Investment Shares as set forth next to each Purchaser’s name on Schedule
I.

 

(b) Exchange and Issuance of Exchange Shares.

 

(i) Subject to the terms and conditions set forth in the Agreement, at the
Closing, the Company shall issue to Ampersand such number of Exchange Shares as
set forth next to Ampersand’s name on Schedule II, in exchange for the tender
for cancellation of an aggregate of 270 shares of Series A Shares held by
Ampersand as set forth on Schedule II hereto.

 

(ii) Except as otherwise required by applicable laws, the Company and Ampersand
hereby agree to treat, for U.S. federal, state and local income tax purposes,
the Exchange as a recapitalization under Section 368 of the Code.

 

(c) Closing. The Closing of the purchase and sale of the New Investment Shares
and the exchange and issuance of the Exchange Shares shall take place at the
offices of Pepper Hamilton LLP, with offices located at 620 Eighth Avenue, 37th
Floor, New York, NY 10018-1405, on the Closing Date or at such other locations
or remotely by facsimile transmission or other electronic means as the parties
may mutually agree.

 

(d) Form of Payment. At the Closing, each Purchaser shall wire the Closing
Subscription Amount for the New Investment Shares set forth next to such
Purchaser’s name on Schedule I hereto, in United States dollars and in
immediately available funds, to the Company’s account set forth on Exhibit C
hereto or such other account as may be designated in writing by the Company at
least two (2) Business Days in advance. At the Closing, the Company shall issue
all New Investment Shares and Exchange Shares in book-entry form.

 

2.2 Closing Deliveries. (a) At or prior to the Closing, the Company shall issue,
deliver or cause to be delivered to the Purchasers the following:

 

(i) evidence reasonably satisfactory to each Purchaser that the Transfer Agent
has recorded the Series B Shares to be issued to each Purchaser at the Closing
on the stock ledger of the Company in book-entry form;

 

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(ii) a legal opinion of Company Counsel with respect to the matters described on
Schedule A, dated as of the Closing Date, in form and substance reasonably
satisfactory to each Purchaser, executed by such counsel and addressed to each
Purchaser;

 

(iii) the Investor Rights Agreement, duly executed by the Company;

 

(iv) a certificate of the Secretary of the Company (the “Secretary’s
Certificate”), dated as of the Closing Date, (a) certifying the resolutions
adopted by the Board of Directors of the Company approving the transactions
contemplated by this Agreement and the other Transaction Documents and the
issuance of the Series B Shares at the Closing, (b) certifying the current
versions of the Company Organizational Documents and the Certificate of
Designation and (c) certifying as to the signatures and authority of the
individuals signing the Transaction Documents and related documents on behalf of
the Company, in the form attached hereto as Exhibit E;

 

(v) a certificate dated as of the Closing Date and signed by its chief executive
officer or its chief financial officer in the form attached hereto as Exhibit F;

 

(vi) a certificate evidencing the formation and good standing of the Company
issued by the Secretary of State (or comparable office) of Delaware, as of a
date within seven (7) Business Days of the Closing Date; and

 

(vii) a certificate evidencing the Company’s qualification as a foreign
corporation and good standing issued by the Secretary of State (or comparable
office) of each jurisdiction in which the Company is qualified to do business as
a foreign corporation, as of a date within seven (7) Business Days of the
Closing Date.

 

(b) On or prior to the Closing, each Purchaser shall deliver or cause to be
delivered to the Company the following:

 

(i) the Closing Subscription Amount, in United States dollars and in immediately
available funds, in the amount set forth next to such Purchaser’s name on
Schedule I under the heading “Closing Subscription Amount”, by wire transfer to
the account set forth on Exhibit C attached hereto or such other account as may
be notified by the Company to the Purchasers at least two (2) Business Days
prior to the Closing Date;

 

(ii) the Investor Rights Agreement, duly executed by such Purchaser; and

 

(iii) a fully completed and duly executed Accredited Investor Questionnaire,
satisfactory to the Company, and Stock Certificate Questionnaire in the forms
attached hereto as Exhibits D-1 and D-2, respectively.

 

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Article III
REPRESENTATIONS AND WARRANTIES

 

3.1 Representations and Warranties of the Company. The Company hereby represents
and warrants as of the Closing Date to the Purchasers as follows:

 

(a) The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it under the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, since the date that is two years preceding
the date hereof (or such shorter period as the Company was required by law or
regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Reports” and the SEC Reports filed
with, or furnished to, the Commission and publicly available prior to the date
hereof being the “Filed SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to the
expiration of any such extension, except where the failure to file on a timely
basis, individually or in the aggregate, would not have or reasonably be
expected to be material to the Company. As of their respective filing dates, or
to the extent corrected by a subsequent restatement prior to the date hereof, as
of the date of such restatement, the SEC Reports complied as to form in all
material respects with the requirements of the Securities Act and the Exchange
Act and the rules and regulations of the Commission promulgated thereunder, and
none of the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the Material
Contracts to which the Company or any of its Subsidiaries is a party or to which
the property or assets of the Company or any of its Subsidiaries are subject has
been filed as an exhibit to the SEC Reports. As of the date hereof, (i) the
Company is eligible to file a Registration Statement on Form S-3 for the resale
of the Conversion Shares, (ii) none of the Company’s Subsidiaries is required to
file any documents with the Commission, (iii) there are no outstanding or
unresolved comments in comment letters from the Commission staff with respect to
any of the Filed SEC Reports and (iv) none of the Filed SEC Reports is the
subject of ongoing Commission review, outstanding Commission comment or
outstanding Commission investigation. Each of the certifications and statements
relating to the Filed SEC Reports required by: (A) Rule 13a-14 or Rule 15d-14
under the Exchange Act, (B) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley
Act) or (C) any other rule or regulation promulgated by the Commission or
applicable to the Filed SEC Reports is accurate and complete, has been timely
filed and complies as to form and content with all applicable laws.

 

(b) The financial statements of the Company (including all notes and schedules
thereto) included or incorporated by reference in the SEC Reports complied as to
form, as of their respective dates of filing with the Commission, in all
material respects with the published rules and regulations of the Commission
with respect thereto, have been prepared in all material respects in accordance
with U.S. GAAP (except, in the case of unaudited quarterly statements, as
permitted by Form 10-Q of the Commission or other rules and regulations of the
Commission) applied on a consistent basis during the periods involved (except
(i) as may be indicated in such financial statements or in the notes thereto or
(ii) as permitted by Regulation S-X or other rules or regulations of the
Commission) and present fairly in all material respects the financial position
of the Company and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders’ equity and cash flows of the Company and
its consolidated subsidiaries for the periods specified and such financial
statements and related schedules and notes thereto, subject in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments. Neither
the Company nor any of its Subsidiaries has any liabilities of any nature
(whether accrued, absolute, contingent or otherwise) that would be required
under U.S. GAAP, as in effect on the date hereof, to be reflected on a
consolidated balance sheet of the Company (including the notes thereto) except
liabilities (i) reflected or reserved against in the balance sheet (or the notes
thereto) of the Company and its Subsidiaries as of September 30, 2019 (the
“Balance Sheet Date”) included in the Filed SEC Reports, (ii) incurred after the
Balance Sheet Date in the ordinary course of business, or (iii) as contemplated
by this Agreement.

 

(c) The Company and each of its Subsidiaries has filed all material United
States federal, state, local and non-United States tax returns that are required
to be filed through the date hereof, which returns are true and correct in all
material respects, or has received timely extensions thereof, and has paid all
taxes shown on such returns and all assessments received by it to the extent
that the same are material and have become due, except for any such taxes
currently being contested in good faith. There are no tax audits or
investigations pending.

 

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(d) (i) Neither the Company nor any of its Subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Filed SEC Reports any material loss or interference with its
business, direct or contingent, including from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth or
contemplated in the Filed SEC Reports; and (ii) since the respective dates as of
which information is given in the Filed SEC Reports, there has not been (A) any
change in the capital stock or long-term debt of the Company or any of its
Subsidiaries, taken as a whole (other than changes pursuant to agreements or
employee benefit plans or in connection with the exercise of options, in each
case as described or referred to in the Filed SEC Reports) or (B) any material,
individually or in the aggregate, adverse change, or any development involving a
prospective adverse change that is material (i) in or affecting the properties,
business, management, prospects, operations, earnings or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole or (ii) to the
ability of the Company to consummate the transactions contemplated by the
Transaction Documents on a timely basis or on the ability of the Company to
comply with its obligations under the Transaction Documents (a “Material Adverse
Effect”).

 

(e) The Company and its Subsidiaries have good and marketable title to all real
property owned by them, if any, and have good title to all other material
property owned by them, in each case free and clear of all liens, encumbrances
and defects except as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company and its Subsidiaries; and any real property and buildings held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not materially interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries.

 

(f) (i) The Company and its Subsidiaries are in material compliance with all
Applicable Laws or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products, asbestos-containing materials or mold
(collectively, “Hazardous Materials”) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, “Environmental Laws”), (ii) the Company and
its Subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in material compliance with their
requirements, (iii) there are no pending or, to the knowledge of the Company,
threatened administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of non-compliance or violation,
investigation or Proceedings relating to any Environmental Law against the
Company or any of its Subsidiaries, and (iv) to the knowledge of the Company,
there are no events or circumstances that would reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit or
Proceeding by any private party or Governmental Entity, against or affecting the
Company or any of its Subsidiaries relating to Hazardous Materials or any
Environmental Laws.

 

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(g) The Company (i) has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and corporate authority to own its properties and conduct its
business as described in all material respects in the SEC Reports, and (ii) has
been duly qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which it owns
or leases properties or conducts any business so as to require such
qualification, except in the case of clause (ii), where the failure to be so
qualified or in good standing would not be material; and each Subsidiary of the
Company (x) has been duly incorporated or formed, as the case may be, and is
validly existing as a corporation or limited liability company, as applicable,
in good standing under the laws of its jurisdiction of incorporation or
formation, with the company power and authority to own its properties and
conduct its business as described in the SEC Reports, and (y) has been duly
qualified as a foreign corporation or limited liability company for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, except in the case of clause (y), where the
failure to be so qualified or in good standing would not be material.

 

(h) The execution and delivery of this Agreement by the Company and performance
by the Company of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or other applicable action including by
the Board of Directors. Each Transaction Document to which it is a party has
been (or will be) duly executed by the Company, and when delivered by the
Company in accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Company, enforceable against it in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors’ rights and
remedies, by other equitable principles of general application, or except
insofar as indemnification and contribution provisions may be limited by
applicable law. No vote, consent or approval of the stockholders of the Company
is required under applicable law, the Company Organizational Documents or under
any contract between the Company and any stockholder of the Company, to
authorize or approve this Agreement or the other Transaction Documents or the
transactions contemplated hereby or thereby. The Board of Directors has taken
all necessary actions such that the restrictions set forth in Section 203 of the
General Corporation Law of the State of Delaware will not apply to any
acquisition by any Purchaser of the Preferred Shares to be issued pursuant to
this Agreement or upon the conversion of the Preferred Shares into Conversion
Shares pursuant to the Certificate of Designation.

 

(i) The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock and 5,000,000 shares of preferred stock, par value $0.01 per
share (“Company Preferred Stock”), of which 47,000 shares of Series B Shares
will be authorized as of the Closing and no other shares of Company Preferred
Stock other than the Series A Shares will be authorized as of the Closing. At
the close of business on January 10, 2020 (the “Capitalization Date”), (i)
39,722,603 shares of Common Stock were issued, (ii) 39,604,797 shares of Common
Stock were outstanding, (iii) 2,992,211 shares of Common Stock were reserved and
available for issuance pursuant to the Company Stock Plans, (iv) 4,650,342
shares of Common Stock were subject to outstanding Company Stock Grants, (v)
1,000,000 shares of Common Stock were reserved and available for issuance
pursuant to the Company’s employee stock purchase plan, (vi) warrants to
purchase 14,196,482 shares of Common Stock were outstanding, (vii) 270 Series A
Shares were issued and outstanding, (viii) 34,408,295 shares of Common Stock
were available and reserved for issuance upon conversion of Series A Shares and
(ix) no shares of Series B Shares were issued and outstanding.

 

 10 

 

 

(j) Except as described in Section 3.1(i), as of the Capitalization Date, there
were (i) no outstanding shares of capital stock of, or other Equity Interests or
voting interests in, the Company, (ii) no outstanding securities of the Company
convertible into or exchangeable for shares of capital stock of, or other Equity
Interests or voting interests in, the Company, (iii) no outstanding options,
warrants, rights or other commitments or agreements to acquire from the Company,
or that obligate the Company to issue, any capital stock of, or other Equity
Interests or voting interests (or voting debt) in, or any securities convertible
into or exchangeable for shares of capital stock of, or other Equity Interests
or voting interests in, the Company other than obligations under the Company
Plans in the ordinary course of business, (iv) no obligations of the Company to
grant, extend or enter into any subscription, warrant, right, convertible or
exchangeable security or other similar agreement or commitment relating to any
capital stock of, or other Equity Interests or voting interests in, the Company
(the items in clauses (i), (ii), (iii) and (iv) being referred to collectively
as “Company Securities”) and (v) no other obligations by the Company or any of
its Subsidiaries to make any payments based on the price or value of any Company
Securities. Since the Capitalization Date, neither the Company nor any of its
Subsidiaries has (A) issued any Company Securities or incurred any obligation to
make any payments based on the price or value of any Company Securities or
dividends paid thereon, other than in connection with the vesting, settlement or
exercise of the stock option, service based restricted stock awards and
performance-based restricted stock awards referred to in Section 3.1(i) that
were outstanding as of the Capitalization Date or as expressly contemplated by
this Agreement or (B) established a record date for, declared, set aside for
payment or paid any dividend on, or made any other distribution in respect of,
any shares of the Company’s capital stock. Except as described in the SEC
Reports, there are no outstanding agreements of any kind which obligate the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any Company Securities (other than pursuant to the cashless exercise of Company
Stock Options), or obligate the Company to grant, extend or enter into any such
agreements relating to any Company Securities, including any agreements granting
any preemptive rights, subscription rights, anti-dilutive rights, rights of
first refusal or similar rights with respect to any Company Securities. Except
as set forth in the Investor Rights Agreement, none of the Company or any
Subsidiary of the Company is a party to any stockholders’ agreement, voting
trust agreement, registration rights agreement or other similar agreement or
understanding relating to any Company Securities or any other agreement relating
to the disposition, voting or dividends with respect to any Company Securities.

 

(k) All of the issued shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid, non-assessable and free of
preemptive rights and were not issued in violation of any rights of first
refusal or other similar rights to subscribe for or purchase securities of the
Company; and conform in all material respects to the description of such capital
stock contained in the Filed SEC Reports and all of the issued shares of capital
stock of each Subsidiary of the Company have been duly authorized and validly
issued, are fully paid and non-assessable and are owned directly or indirectly
by the Company, free and clear of all liens, encumbrances, equities or claims
and there are no options, warrants or rights to acquire shares of capital stock
of any Subsidiary of the Company. With respect to stock options (the “Stock
Options”) granted pursuant to the stock-based compensation plans of the Company
(the “Company Stock Plans”), (i) each Stock Option intended to qualify as an
“incentive stock option” under Section 422 of the Code so qualified as of the
applicable Grant Date, (ii) each grant of a Stock Option was duly authorized no
later than the date on which the grant of such Stock Option was by its terms to
be effective (the “Grant Date”) by all necessary corporate action, including, as
applicable, approval by the Board of Directors and any required stockholder
approval by the necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and delivered by each
party thereto, (iii) each such grant was made in accordance with the terms of
the Company Stock Plans, (iv) the per share exercise price of each Stock Option
was equal to the fair market value of a share of Common Stock, as determined in
good faith by the Board of Directors on the effective Grant Date and (v) each
such grant was properly accounted for in accordance with U.S. GAAP.

 

(l) The Preferred Shares to be issued by the Company to the Purchasers hereunder
have been duly authorized and, when issued and delivered against payment
therefor as provided herein, will be duly and validly issued and fully paid and
non-assessable and, assuming the accuracy of the Purchasers’ representations in
Section 3.2 below, issued in compliance with all applicable federal and state
securities laws; the Conversion Shares have been duly authorized and, when
issued and delivered in accordance with the Transaction Documents and the
Certificate of Designation upon conversion of the Series B Shares, will be duly
and validly issued and fully paid and non-assessable and, assuming the accuracy
of the Purchasers’ representations in Section 3.2 below, issued in compliance
with all applicable federal and state securities laws; and the issuance of the
Securities is not and will not be issued in violation of any purchase option,
call option, preemptive right, resale right, subscription right, right of first
refusal or similar right, and will be free and clear of all liens and
encumbrances, except restrictions imposed by the Securities Act and any
applicable state securities laws. The Preferred Shares, when issued, and the
Conversion Shares, if and when issued, will have the terms and conditions and
entitle the holders thereof to the rights set forth in the Company
Organizational Documents, as amended by the Certificate of Designation. The
shares of Common Stock issuable upon conversion of the Preferred Shares have
been duly reserved for issuance. Nothing in this subsection shall be construed
to mean that the Preferred Shares, Conversion Shares and Common Stock are not
subject to the restrictions set forth in the Certificate of Designation and the
Investor Rights Agreement.

 

 11 

 

 

(m) The execution, delivery and performance by the Company of this Agreement,
the Transaction Documents (including the adoption of the Certificate of
Designation), and the consummation of the transactions contemplated hereby and
thereby, including the issue and sale of the Preferred Shares and the compliance
by the Company its obligations hereunder and thereunder, do not and will not
(A) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Subsidiaries is subject, (B) violate any of
the provisions of the Company Organizational Documents, or the organizational
documents of any subsidiary, (C) violate any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) of any court or
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties, or (D) require any consent, approval,
authorization, order, registration or qualification of or with any court,
governmental agency or body or third party, except for such consents, approvals,
authorizations, orders, registrations or qualifications that have been obtained
or made and are in full force and effect, and with respect to any third party
consent, the failure of which to obtain, individually or in the aggregate, would
not be material to the Company and its Subsidiaries, taken as a whole, or
adversely impact the ability to consummate the offering contemplated hereby.

 

(n) Neither the Company nor any of its Subsidiaries is (A) in violation of the
Company Organizational Documents or other organizational documents or (B) in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound, except in the case of clause
(B), to the extent that such default, individually or in the aggregate, would
not be material to the Company and its Subsidiaries, taken as a whole, or
adversely impact the ability to consummate the offering contemplated hereby.

 

(o) Other than as set forth in the Filed SEC Reports, there are no legal or
governmental Proceedings pending to which the Company or any of its Subsidiaries
is a party or of which any property or assets of the Company or any of its
Subsidiaries is the subject, which, if determined adversely to the Company or
any of its Subsidiaries, would individually or in the aggregate be material to
the Company or its Subsidiaries; and, no such Proceedings are threatened by
governmental authorities or threatened by others.

 

(p) The Company is not and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof, will not be required to
be registered as an “investment company,” as such term is defined in the
Investment Company Act of 1940, as amended (the “Investment Company Act”).

 

 12 

 

 

(q) BDO USA, LLP, who have audited certain financial statements of the Company
and its Subsidiaries is a registered public accounting firm (as defined in
Section 2(a)(12) of the Sarbanes-Oxley Act), is “independent” with respect to
the Company within the meaning of Regulation S-X and the Public Company
Accounting Oversight Board (United States) and is in compliance with subsections
(g) through (l) of Section 10A of the Exchange Act and the rules and regulations
promulgated by the Commissions and the Public Company Accounting Oversight Board
thereunder. All non-audit services performed by the Company’s auditors for the
Company that were required to be approved in accordance with Section 202 of the
Sarbanes-Oxley Act were so approved.

 

(r) The Company maintains a system of internal control over financial reporting
(as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies
with the requirements of the Exchange Act and has been designed by the Company’s
principal executive officer and principal financial officer, or under their
supervision, 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. The
Company’s internal control over financial reporting is effective and the Company
is not aware of any material weaknesses in its internal control over financial
reporting.

 

(s) The Board of Directors meets the independence requirements of, and has
established an audit committee that meets the independence requirements of, the
rules and regulations of the Commission and the Principal Trading Market.

 

(t) Since the date of the latest audited financial statements included or
incorporated by reference in the Filed SEC Reports, there has been no change in
the internal control of the Company or its Subsidiaries over financial reporting
that has materially affected, or is reasonably likely to materially affect, the
internal control of the Company or its Subsidiaries over financial reporting.

 

(u) The Company and its Subsidiaries maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act)
that comply with the requirements of the Exchange Act and such disclosure
controls and procedures are effective at the reasonable assurance level.

 

(v) The Company and each of its Subsidiaries make and keep accurate books and
records and maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles as applied in the
United States and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management’s general or specific
authorization; (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences; and (v) the interactive data in extensible Business
Reporting Language included or incorporated by reference in the SEC Reports
fairly presents the information called for in all material respects and is
prepared in accordance with the Commission’s rules and guidelines applicable
thereto.

 

 13 

 

 

(w) To the Company’s knowledge, the Company and its Subsidiaries own, possess,
license or have other rights to use, or could obtain on commercially reasonable
terms, all foreign and domestic patents, patent applications, trade and service
marks, trade and service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the “Intellectual Property”), necessary for
the conduct of their respective businesses as now conducted and as currently
proposed to be conducted. Further, (i) there are no material rights of third
parties to any such Intellectual Property owned by the Company or its
Subsidiaries except for nonexclusive licenses granted to customers in the
ordinary course to third parties; (ii) to the Company’s knowledge, there is no
infringement by third parties of any such Intellectual Property of the Company
or its Subsidiaries necessary for the conduct of their respective businesses as
now conducted and as currently proposed to be conducted; (iii) there is no
pending or, to the Company’s knowledge, threatened action, suit, proceeding or
claim by others challenging the Company’s or its Subsidiaries’ rights in or to
any such Intellectual Property of the Company or its Subsidiaries necessary for
the conduct of their respective businesses as now conducted and as currently
proposed to be conducted, and the Company is unaware of any facts which could
form a reasonable basis for any such action, suit, proceeding or claim; (iv)
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
Intellectual Property of the Company or its Subsidiaries necessary for the
conduct of their respective businesses as now conducted and as currently
proposed to be conducted; (v) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others that the
Company or its Subsidiaries infringe or otherwise violate any patent, trademark,
copyright, trade secret or other proprietary rights of others; (vi) to the
Company’s knowledge, there is no third-party U.S. patent or published U.S.
patent application which contains claims for which an Interference Proceeding
(as defined in 35 U.S.C. § 135), or the equivalent in any other jurisdiction,
has been commenced against any patent or patent application owned by or licensed
to the Company or its Subsidiaries; and (vii) except as disclosed in the SEC
Reports, the Company and its Subsidiaries have complied in all material respects
with the terms of each agreement pursuant to which Intellectual Property has
been licensed to the Company or such Subsidiary, and all such agreements are in
full force and effect.

 

(x) There are no off-balance sheet arrangements (as defined in Regulation S-K
Item 303(a)(4)(ii)) that may have a material current or future effect on the
Company’s financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures or capital resources.

 

(y) The Company and its Subsidiaries have each complied, and are presently in
compliance, in all material respects with all obligations, laws and regulations
regarding the collection, use, transfer, storage, protection, disposal and/or
disclosure of personally identifiable information and/or any other information
collected from or provided by third parties. The Company and its Subsidiaries
have taken commercially reasonable steps to protect the information technology
systems and data used in connection with the operation of the Company and/or its
Subsidiaries. The Company and its Subsidiaries have used reasonable efforts to
establish, and have established, commercially reasonable disaster recovery and
security plans, procedures and facilities for the business, including, without
limitation, for the information technology systems and data held or used by or
for the Company and/or any of its Subsidiaries. There has been no security
breach or attack or other compromise of or relating to any such information
technology system or data which would reasonably be expected to be material to
the Company and its Subsidiaries, taken as a whole.

 

(z) 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, in the Company’s reasonable judgment, prudent and adequate for
the businesses in which they are engaged.

 

(aa) Except as disclosed in the Filed SEC Reports, there are no related party
transactions that would be required to be disclosed therein by Item 404 of
Regulation S-K and any such related party transactions described therein are
accurately described in all material respects.

 

(bb) Neither the Company nor any of its Subsidiaries maintains or contributes
to, or otherwise has any current or contingent liability with respect to, an
employee benefit plan that is subject to Title IV of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”), or Section 412 of the Code; the employee
benefit plans sponsored, maintained or contributed to by the Company and its
Subsidiaries are in compliance in all material respects with the applicable
provisions of ERISA and the Code; to the knowledge of the Company, no non-exempt
prohibited transaction has occurred, within the meaning of Section 406 of ERISA
or Section 4975 of the Code for which the Company or any of its Subsidiaries
would have any liability.

 

 14 

 

 

(cc) The operations of the Company and its Subsidiaries are and have been
conducted at all times in material compliance with the ERISA, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any Governmental Entity
(collectively, the “Employee Benefit Laws”). No action, suit or Proceeding by or
before any court or Governmental Entity, authority or body or any arbitrator to
which the Company or any of its Subsidiaries is a party with respect to Employee
Benefit Laws is pending or, to the knowledge of the Company, threatened.

 

(dd) The holders of outstanding shares of Common Stock are not entitled to
preemptive or other rights to subscribe for the Securities; none of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company; other than Ampersand with respect to the
Series A Shares (which rights have been waived under this Agreement), there are
no Persons with registration or other similar rights to have securities of the
Company registered under the Securities Act or the rules and regulations of the
Commission thereunder; there are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for,
any capital stock of the Company or any of its Subsidiaries except as disclosed
in Section 3.1(i); and the description of the Company Stock Plans, and the
options or other rights granted thereunder, included in the SEC Reports fairly
presents the information required to be shown with respect to such plans,
options and rights.

 

(ee) Neither the Company nor any of its Subsidiaries or any of their respective
Affiliates does business with any court, administrative agency, regulatory body,
commission or other Governmental Entity, board, bureau or instrumentality,
domestic or foreign, any subdivision thereof, or with any individual,
corporation, firm, partnership, joint venture, limited liability company,
estate, trust, business association, organization or other entity located in any
country that is the subject of the economic sanctions or programs of the United
States as administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to its Subsidiaries or any joint venture partner or
other Person, in a manner that violates any U.S. sanctions administered by OFAC.

 

(ff) The operations of the Company and its Subsidiaries are and have been
conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Bank Secrecy Act, as amended by Title III of
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the applicable money
laundering statutes of jurisdictions where the Company and its Subsidiaries
conduct business, the applicable 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 threatened.

 

(gg) Neither the Company or any of its Subsidiaries nor any director, officer,
agent, employee or Affiliate of the Company or any of its Subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in a
violation by 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 and the Company, its Subsidiaries and its
Affiliates have conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance therewith.

 

 15 

 

 

(hh) Private Placement. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2 of this Agreement and the accuracy of
the information disclosed in the Accredited Investor Questionnaires provided by
the Purchasers, no registration under the Securities Act is required for the
offer and sale of the Preferred Shares by the Company to the Purchasers under
the Transaction Documents. The issuance and sale of the Preferred Shares
hereunder does not contravene the rules and regulations of the Trading Market.

 

(ii) Listing and Maintenance Requirements. Except as described in the SEC
Reports, the Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the Principal Trading Market, and the Company has
taken no action designed to terminate, or likely to have the effect of
terminating, the registration of the Common Stock under the Exchange Act or to
delist, or likely to have the effect of delisting, the Common Stock from the
Principal Trading Market, nor has the Company received any notification that the
Commission or the Principal Trading Market is contemplating terminating or
suspending such registration or listing. Except as described in the SEC Reports,
the Company is in compliance with all applicable listing requirements of the
Principal Trading Market.

 

(jj) No Integrated Offering. None of the Company, its Subsidiaries nor any of
its Affiliates or any Person acting on its behalf has, directly or indirectly,
at any time within the past six (6) months, made any offers or sales of any
Company security or solicited any offers to buy any security under circumstances
that would (i) impair the availability of the exemption from registration under
Regulation D under the Securities Act in connection with the offer and sale by
the Company of the Preferred Shares as contemplated hereby or (ii) cause the
offering of the Preferred Shares pursuant to the Transaction Documents to be
integrated with prior offerings by the Company for purposes of any applicable
law, regulation or stockholder approval provisions, including, without
limitation, under the rules and regulations of any Trading Market on which any
of the securities of the Company are listed or designated.

 

(kk) No General Solicitation. Neither the Company nor any Person acting on
behalf of the Company has offered or sold any of the Preferred Shares by any
form of general solicitation or general advertising.

 

(ll) No Rights Agreement. The Company is not party to a stockholder rights
agreement, “poison pill” or similar antitakeover agreement or plan and no
anti-takeover statutes currently in effect in any jurisdiction in which the
Company operates are applicable.

 

(mm) Certain Business Relationships with Affiliates. The Company has provided to
the Purchasers on or prior to the date hereof true and complete unredacted
copies of any contracts or other agreements (excluding employment, stock option
and customary indemnification agreements with officers and directors entered
into in the ordinary course of business) between the Company, on the one hand,
and any director, officer or stockholder (in each case, in his, her or its
capacity as such) of the Company, any of its Subsidiaries or its Affiliates, on
the other hand, which is currently in effect.

 

(nn) Subsidiaries. The entities set forth on Schedule B (collectively, the
entities required to be disclosed on Schedule B, the “Subsidiaries”), are the
Company’s only significant subsidiaries (as such term is defined in Rule 1-02 of
Regulation S-X promulgated by the Commission). The Company owns, directly or
indirectly, all of the equity interests of the Subsidiaries free and clear of
any lien, charge, security interest, encumbrance, right of first refusal or
other restriction, and all the equity interests of the Subsidiaries are validly
issued and are fully paid, nonassessable and free of preemptive and similar
rights. Except as described in the Filed SEC Reports, no Subsidiary is currently
prohibited, directly or indirectly, from paying any dividends to the Company or
any of its Subsidiaries, from making any other distribution on such Subsidiary’s
capital stock, from repaying to the Company any loans or advances to such
Subsidiary from the Company or from transferring any of such Subsidiary’s
property or assets to the Company or any other Subsidiary of the Company.

 

 16 

 

 

(oo) No Preferential Rights. Except as described in the Filed SEC Reports, (i)
no Person has the right, contractual or otherwise, to cause the Company or any
of its Subsidiaries to issue or sell to such Person any Common Stock or shares
of any other capital stock or other securities of the Company or any of its
Subsidiaries, (ii) no Person has any preemptive rights, resale rights, rights of
first refusal, rights of co-sale, or any other rights (whether pursuant to a
“poison pill” provision or otherwise) to purchase any Common Stock or shares of
any other capital stock or other securities of the Company or any of its
Subsidiaries, (iii) no Person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the offer and sale of the
Common Stock, and (iv) no Person has the right, contractual or otherwise, to
require the Company or any of its Subsidiaries to register under the Securities
Act, any Common Stock or shares of any other capital stock or other securities
of the Company or any of its Subsidiaries, or to include any such shares or
other securities in the offering contemplated hereby, as a result of the sale of
the Preferred Shares as contemplated hereby or otherwise.

 

(pp) Consents and Permits. Each product subject to the jurisdiction of the U.S.
Food and Drug Administration (“FDA”) or any non-U.S. counterpart that is
manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by
the Company or any of its Subsidiaries are subject to (each such product, a
“Product”), had been manufactured, packaged, labeled, tested, distributed, sold
and/or marketed by the Company or its Subsidiaries, in compliance in all
material respects with all applicable Health Care Laws relating to registration,
investigational use, premarket clearance, licensure, or application approval,
good manufacturing practices, good laboratory practices, good clinical
practices, product listing, quotas, labeling, advertising, record keeping and
filing of reports. There is no pending, completed or threatened action
(including any lawsuit, arbitration, or legal or administrative or regulatory
proceeding, charge, complaint, or investigation) against the Company or any of
its Subsidiaries, and none of the Company or any of its Subsidiaries has
received any notice, warning letter or other communication from the FDA or any
other governmental entity, which (i) contests the premarket clearance,
licensure, registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising
or sales promotional materials relating to, any Product, (iii) imposes a
clinical hold on any clinical investigation by the Company or any of its
Subsidiaries (iv) enjoins production at any facility of the Company or any of
its Subsidiaries or, (v) enters or proposes to enter into a consent decree of
permanent injunction with the Company or any of its Subsidiaries, or (vi)
otherwise alleges any violation of any laws, rules or regulations by the Company
or any of its Subsidiaries in any material respect. Neither the Company nor any
of its Subsidiaries have been informed by the FDA or any non-U.S. counterpart
that the FDA or any non-U.S. counterpart will prohibit the marketing, sale,
license or use in the United States or in any other territory any product
proposed to be developed, produced or marketed by the Company or any of its
Subsidiaries nor has the FDA or any non-U.S. counterpart expressed any concern
as to approving or clearing for marketing any product being developed or
proposed to be developed by the Company or any of its Subsidiaries. To the
Company’s knowledge, there are no legal or governmental proceedings relating to
any Health Care Law pending or threatened to which the Company or any of its
Subsidiaries is a party, nor is it aware of any material violations of such acts
or regulations by the Company or any of its Subsidiaries. For purposes of this
Agreement, “Health Care Laws” means: (i) the Federal Food, Drug, and Cosmetic
Act and the regulations promulgated thereunder; (ii) all applicable federal,
state, local and all applicable foreign health care related fraud and abuse
laws, including, without limitation, the U.S. Anti-Kickback Statute (42 U.S.C.
Section 1320a-7b(b)), the U.S. Physician Payment Sunshine Act (42 U.S.C. §
1320a-7h), the U.S. Civil False Claims Act (31 U.S.C. Section 3729 et seq.), the
criminal False Claims Law (42 U.S.C. § 1320a-7b(a)), all criminal laws relating
to health care fraud and abuse, including but not limited to 18 U.S.C. Sections
286 and 287, and the health care fraud criminal provisions under the U.S. Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”) (42 U.S.C.
Section 1320d et seq.), the exclusion laws (42 U.S.C. § 1320a-7), the civil
monetary penalties law (42 U.S.C. § 1320a-7a), the statutes, regulations and
directives of applicable government funded or sponsored healthcare programs, and
the regulations promulgated pursuant to such statutes; (iii) the Standards for
Privacy of Individually Identifiable Health Information, the Security Standards,
and the Standards for Electronic Transactions and Code Sets promulgated under
HIPAA, the Health Information Technology for Economic and Clinical Health Act
(42 U.S.C. Section 17921 et seq.), and the regulations promulgated thereunder
and any state or non-U.S. counterpart thereof or other law or regulation the
purpose of which is to protect the privacy of individuals or prescribers; (iv)
Medicare (Title XVIII of the Social Security Act); (v) Medicaid (Title XIX of
the Social Security Act); and (vi) any and all other applicable health care laws
and regulations.

 

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(qq) Regulatory Filings. Except as described in the Filed SEC Reports, neither
the Company nor any of its Subsidiaries has failed to file with the applicable
Governmental Entity (including the FDA or any foreign, federal, state or local
Governmental Entity performing functions similar to those performed by the FDA)
any required filing, declaration, listing, registration, report or submission,
except for any deficiencies that, individually or in the aggregate, would be
immaterial; except as described in the Filed SEC Reports, all such filings,
declarations, listings, registrations, reports or submissions were in material
compliance with applicable laws when filed and no material deficiencies have
been asserted by any applicable regulatory authority with respect to any such
filings, declarations, listings, registrations, reports or submissions. Each of
the Company and its Subsidiaries have operated and currently is, in all material
respects, in compliance with all applicable Health Care Laws. The Company has no
knowledge of any studies, tests or trials the results of the Company or any of
its Subsidiaries which reasonably call into question in any material respect the
results of such studies, tests and trials.

 

(rr) Clinical Studies. The preclinical studies and tests and clinical trials of
the Company or any of its Subsidiaries were, and, if still pending, are being
conducted in all material respects in accordance with the experimental
protocols, procedures and controls pursuant to, where applicable, accepted
professional and scientific standards for products or product candidates
comparable to those being developed by the Company or any of its Subsidiaries;
the descriptions of such studies, tests and trials, and the results thereof,
contained in the Filed SEC Reports, if any, are accurate and complete in all
material respects; the Company is not aware of any tests, studies or trials not
described in the Filed SEC Reports, the results of which reasonably call into
question the results of the tests, studies and trials described in the Filed SEC
Reports; and neither the Company nor any of its Subsidiaries has received any
written notice or correspondence from the FDA or any foreign, state or local
Governmental Entity exercising comparable authority or any institutional review
board or comparable authority requiring the termination, suspension, clinical
hold or material modification of any tests, studies or trials.

 

(ss) Brokers. Neither the Company nor any of its Subsidiaries has incurred any
liability for any finder’s fees, brokerage commissions or similar payments in
connection with the transactions herein contemplated.

 

(tt) Labor Disputes and Matters. Neither the Company nor any of its Subsidiaries
employs any person represented by a union or collective bargaining unit. No
labor disturbance by or dispute with employees of the Company or any of its
Subsidiaries exists or, to the knowledge of the Company, is threatened.

 

(uu) Margin Rules. Neither the issuance, sale and delivery of the Preferred
Shares nor the application of the proceeds thereof by the Company as described
in the Filed SEC Reports will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board of
Governors.

 

(vv) Insurance. The Company and each of its Subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as the Company and each of
its Subsidiaries reasonably believe are adequate for the conduct of their
business and as is customary for companies engaged in similar businesses in
similar industries.

 

 18 

 

 

(ww) Compliance with Laws. Each of the Company and its Subsidiaries: (i) is and
at all times has been in material compliance with all laws, statutes, rules, or
regulations applicable to the ownership, testing, development, manufacture,
packaging, processing, use, distribution, marketing, labeling, promotion, sale,
offer for sale, storage, import, export or disposal of any product manufactured
or distributed by the Company or its Subsidiaries (“Applicable Laws”); (ii) has
not received any FDA Form 483, notice of adverse finding, warning letter,
untitled letter or other correspondence or notice from the FDA or any other
Governmental Entity alleging or asserting noncompliance with any Applicable Laws
or any licenses, certificates, approvals, clearances, authorizations, permits
and supplements or amendments thereto required by any such Applicable Laws
(“Authorizations”); (iii) possesses all material Authorizations and such
Authorizations are valid and in full force and effect and are not in material
violation of any term of any such Authorizations; (iv) has not received notice
of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from any Governmental Entity or third party alleging
that any product operation or activity is in violation of any Applicable Laws or
Authorizations and has no knowledge that any such Governmental Entity or third
party is considering any such claim, litigation, arbitration, action, suit,
investigation or proceeding; (v) has not received notice that any Governmental
Entity has taken, is taking or intends to take action to limit, suspend, modify
or revoke any Authorizations and has no knowledge that any such Governmental
Entity is considering such action; (vi) has filed, obtained, maintained or
submitted all material 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 and correct in all material respects on the date filed
(or were corrected or supplemented by a subsequent submission); and (vii) has
not, either voluntarily or involuntarily, initiated, conducted, or issued or
caused to be initiated, conducted or issued, any recall, market withdrawal or
replacement, safety alert, post-sale warning, “dear healthcare provider” letter,
or other notice or action relating to the alleged lack of safety or efficacy of
any product or any alleged product defect or violation and, to the Company’s
knowledge, no third party has initiated, conducted or intends to initiate any
such notice or action.

 

(xx) Disclosure. No representation or warranty or other statement made by the
Company or its representatives in connection with the negotiation, execution,
delivery or performance of this Agreement or the Transaction Documents contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements contained herein and therein, in light
of the circumstances under which such statements were made, not misleading.

 

(yy) Health Care Regulatory Compliance.

 

(i) The Company and each of its Subsidiaries is in material compliance with all
applicable Health Care Laws. Neither the Company nor any of its Subsidiaries has
received any written or, to the Company’s knowledge, oral communication from a
Governmental Entity, Government Program, Private Program, or other Person
alleging any failure to comply with applicable Health Care Laws. Except as
disclosed in the section entitled “RedPath – DOJ Settlement” in Note 10 of the
consolidated financial statements included in the 2018 Form 10-K, to the
knowledge of the Company, neither the Company nor any of its Subsidiaries has
been investigated for violation of any Health Care Laws to which it is bound or
to which any business activity or professional services performed by or for the
Company or any of its Subsidiaries is subject.

 

(ii) The Company and each of its Subsidiaries has, and for the past three years
has had, privacy and security policies, procedures and safeguards that comply
with then-applicable requirements of health care privacy laws.

 

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(iii) Except as disclosed in the section entitled “RedPath – DOJ Settlement” in
Note 10 of the consolidated financial statements included in the 2018 Form 10-K,
neither the Company nor any of its Subsidiaries is, and in the past three years
has not been, a party to a corporate integrity agreement with any Governmental
Entity or otherwise had any continuing reporting obligations pursuant to any
deferred prosecution, settlement or other integrity agreement with any
Governmental Entity.

 

(iv) Neither the Company nor any of its Subsidiaries has at any time in the past
three years (i) been served with or received any search warrant, subpoena or
civil investigative demand from any Governmental Entity, (ii) made a voluntary
disclosure pursuant to the U.S. Department of Health and Human Services Office
of the Inspector General’s provider Self-Disclosure Protocol or the Centers for
Medicare and Medicaid’s Voluntary Self-Referral Disclosure Protocol, (iii) made
a self-disclosure to a Medicare Administrative Contractor or (iv) otherwise made
a material disclosure to a Governmental Entity regarding potential repayment
obligations arising from actual or potential violations of Health Care Laws.

 

(v) The Company and each of its Subsidiaries, their respective personnel and
authorized representatives are operating, and for past three years have
operated, in material compliance with the federal health care program
anti-kickback statute (42 U.S.C. § 1320a-7b, et seq.), the federal physician
self-referral law (commonly known as the Stark Law) (42 U.S.C. § 1395nn, et
seq., and its implementing regulations, 42 C.F.R. Subpart J), and all other
Applicable Laws with respect to direct and indirect compensation arrangements,
ownership interests or other relationships between such Person and any past,
present or potential patient, physician, supplier, contractor or other Person in
a position to refer, recommend or arrange for the referral of patients or other
health care business or to whom such Person refers, recommends or arranges for
the referral of patients or other health care business.

 

(vi) There has been no non-coverage decision, material adverse change to any
existing coverage determination, nor change in reimbursement or coverage
policies which could have a material adverse effect on, cause, or result in a
denial of reimbursement, with respect to any of the Company’s or any of its
Subsidiaries’ products or services by CMS or its contractors (including but not
limited to Medicare Administrative Contractors (MACs)), whether through a
National Coverage Determination (NCD) or a Local Coverage Determination (LCD),
nor a determination by CMS or a MAC that any of the Company’s or any of its
Subsidiaries’ products or services (i) are considered non-covered services, and
(ii) no existing coverage determination has been, is pending, nor has been
threatened to be revoked or amended.

 

(vii) Except as disclosed in the section entitled “RedPath – DOJ Settlement” in
Note 10 of the consolidated financial statements included in the 2018 Form 10-K
for the year ended December 31, 2018, neither the Company nor any of its
Subsidiaries has received any nor, to the knowledge of the Company, are there
any pending, written complaints, claims, demands, inquiries, proceedings, or
other notices, including any notices of any investigation or other Legal
Proceedings regarding the Company or any of its Subsidiaries, initiated by (i)
any Person; (ii) any Private Programs; (iii) any Governmental Entity, including
the United States Federal Trade Commission, a state attorney general, data
protection authority or similar state official, or a supervisory authority; or
(iv) any self-regulatory authority or entity, alleging that any activity of the
Company or any of its Subsidiaries: (A) is in violation of any applicable
information laws, (B) is in violation of any privacy agreements, (C) is in
violation of any privacy policies, (D) is otherwise in violation of any person’s
privacy, personal or confidentiality rights, or (E) otherwise constitutes an
unfair, deceptive, or misleading trade practice.

 

 20 

 

 

(viii) Neither the Company nor any of its Subsidiaries, to the knowledge of the
Company, any officer, key employee or agent of the Company has, within the last
three years, been convicted of any crime or engaged in any conduct that would
reasonably be expected to result in (i) debarment under 21 U.S.C. Section 335a
or any similar state or foreign Applicable Laws or (ii) exclusion under 42
U.S.C. Section 1320a-7 or any similar state or foreign Applicable Laws.

 

3.2 Representations and Warranties of the Purchasers. Each Purchaser, severally
and not jointly, hereby represents and warrants as of the Closing Date to the
Company as follows:

 

(a) Organization; Authority; Enforceability. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the applicable Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of this
Agreement by such Purchaser and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or, if such Purchaser is not a corporation, such
partnership, limited liability company or other applicable like action, on the
part of such Purchaser. Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.

 

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

 

(c) Investment Intent. Such Purchaser understands that the Securities are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities law and is acquiring the Securities as principal
for its own account and not with a view to, or for distributing or reselling
such Securities or any part thereof in violation of the Securities Act or any
applicable state securities laws. Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business. Such Purchaser does not
presently have any agreement, plan or understanding, directly or indirectly,
with any Person to distribute or effect any distribution of any of the
Securities (or any securities which are derivatives thereof) to or through any
Person; such Purchaser is not a registered broker-dealer under Section 15 of the
Exchange Act or an entity engaged in a business that would require it to be so
registered as a broker-dealer.

 

(d) Purchaser Status. At the time such Purchaser was offered the Preferred
Shares, it was, and at the date hereof it is, an “accredited investor” as
defined in Rule 501(a) under the Securities Act.

 

(e) General Solicitation. Such Purchaser is not purchasing the Preferred Shares
as a result of any advertisement, article, notice or other communication
regarding the Preferred Shares published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general advertisement.

 

 21 

 

 

(f) Experience of Such Purchaser. Such Purchaser, either alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.

 

(g) Access to Information. Such Purchaser acknowledges that it has had the
opportunity to review the Transaction Documents (including all exhibits and
schedules thereto) and the SEC Reports and that it has been afforded (i) the
opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the
Securities; (ii) access to information about the Company and the Subsidiaries
and their respective financial condition, results of operations, business,
properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that
the Company possesses or can acquire without unreasonable effort or expense to
make an informed decision with respect to the investment. Neither such inquiries
nor any other investigation conducted by or on behalf of such Purchaser or its
representatives or counsel shall modify, amend or affect such Purchaser’s right
to rely on the truth, accuracy and completeness of the Company’s representations
and warranties contained in the Transaction Documents.

 

(h) Brokers and Finders; Closing Fee. No Person will have, as a result of the
transactions contemplated by this Agreement, any valid right, interest or claim
against or upon the Company or any Purchaser for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of such Purchaser.

 

(i) Independent Investment Decision. Such Purchaser has independently evaluated
the merits of its decision to purchase the Preferred Shares pursuant to the
Transaction Documents. Such Purchaser understands that nothing in this Agreement
or any other materials presented by or on behalf of the Company to such
Purchaser in connection with the purchase of the Preferred Shares constitutes
legal, tax or investment advice. Such 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 Preferred Shares.

 

(j) Reliance on Exemptions. Such Purchaser understands that the Preferred Shares
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgements and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Preferred Shares.

 

(k) No Governmental Review. Such Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

 

(l) Regulation M. Such Purchaser is aware that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to certain sales of Common Stock
and certain other activities with respect to the Common Stock by the Purchaser.

 

(m) Residency. Such Purchaser’s offices in which its investment decision with
respect to the Preferred Shares was made are located at the address set forth
for notices to be delivered to such Purchaser in Section 6.3.

 

 22 

 

 

(n) No Disqualification Events.

 

(i) Such Purchaser represents that neither it, nor any of its directors,
executive officers, other officers participating in the offering of Preferred
Shares, general partners or managing members, nor any of the directors,
executive officers or other officers participating in the offering of Preferred
Shares of any such general partner or managing member, nor any other officers or
employees of such Purchaser or any such general partner or managing member that
have been or will be paid (directly or indirectly) remuneration for solicitation
of purchasers in connection with the sale of any Preferred Shares (each, a
“Purchaser Covered Person” and, collectively, “Purchaser Covered Persons”), is
subject to any Disqualification Event except for a Disqualification Event (a)
contemplated by Rule 506(d)(2) under the Securities Act and (b) a description of
which has been furnished in writing to the Company prior to the date hereof, or,
in the case of a Disqualification Event occurring after the date hereof, prior
to the date of any offering of Preferred Shares.

 

(ii) Such Purchaser represents that it is not aware of any person that has been
or will be paid (directly or indirectly) remuneration for solicitation of
purchasers in connection with the sale of any Preferred Shares. Such Purchaser
will notify the Company, prior to any offering of Preferred Shares, of any
agreement entered into between such Purchaser and such person in connection with
such sale.

 

(iii) Such Purchaser will notify the Company in writing, prior to any offering
of Preferred Shares of (a) any Disqualification Event relating to any Purchaser
Covered Person not previously disclosed to the Company in accordance with this
Section 3.2(n) and (b) any event that would, with the passage of time, become a
Disqualification Event relating to any Purchaser Covered Person.

 

3.3 Representations and Warranties of Ampersand. Ampersand hereby represents and
warrants as of the Closing Date to the Company that it is the record and
beneficial owner of, and has valid and marketable title to, the Series A Shares
being exchanged by it pursuant to this Agreement, free and clear of any lien,
pledge, restriction or other encumbrance (other than restrictions arising
pursuant to applicable securities laws), and has the absolute and unrestricted
right, power and capacity to surrender and exchange the Series A Shares being
exchanged by it pursuant to this Agreement, free and clear of any lien, pledge,
restriction or other encumbrance. Except for the Investor Rights Agreement, it
is not a party to or bound by, and the Series A Shares being exchanged by it
pursuant to this Agreement are not subject to, any agreement, understanding or
other arrangement (i) granting any option, warrant or right of first refusal
with respect to such Series A Shares to any person, (ii) restricting its right
to surrender and exchange such Series A Shares as contemplated by this
Agreement, or (iii) restricting any other of its rights with respect to such
Series A Shares.

 

The Company and each of the Purchasers acknowledges and agrees that no party to
this Agreement has made or makes any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth
in this Article III and the Transaction Documents.

 

 23 

 

 

Article IV
OTHER AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) Legends. Certificates evidencing the Securities shall bear any legend as
required by the “blue sky” laws of any state and a restrictive legend in
substantially the following form, until such time as they are not required under
Section 4.1(b):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED
BY, IF REQUESTED BY THE COMPANY, A LEGAL OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY AND ITS TRANSFER AGENT OR (II) UNLESS SOLD PURSUANT
TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

(b) Removal of Legends. Promptly, and in no event later than two (2) Business
Days, following a request by a Purchaser, the legend set forth in Section 4.1(a)
above shall be removed and the Company shall issue a certificate without such
legend or any other legend to the holder of the applicable Securities upon which
it is stamped or issue to such holder (if such Securities are DTC eligible) by
electronic delivery at the applicable account at the Depository Trust Company
(“DTC”) designated by such holder, if (i) such Securities are registered for
resale under the Securities Act or (ii) such Securities are sold or transferred
pursuant to Rule 144 (if the transferor is not an Affiliate of the Company).
Certificates for Securities subject to legend removal hereunder may be
transmitted by the Transfer Agent to such Purchaser by crediting the account of
such Purchaser’s prime broker with DTC as directed by such Purchaser. Nothing
herein shall limit a Purchaser’s right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing Securities without legends
as required pursuant to the terms hereof; provided, however, such Purchaser
shall not be entitled to both (i) require the reissuance of the Securities
submitted for legend removal for which such conversion was not timely honored
and (ii) receive the type and number of Securities that would have been issued
if the Company had timely complied with its delivery requirements hereunder. If
the Company fails to deliver to a Purchaser (or its transferee) the applicable
certificate or certificates without any legend or issue to such holder by
electronic delivery at the applicable account at the DTC within such two (2)
Business Day period, and if after such date such Purchaser is required to or
otherwise purchases (in an open market transaction or otherwise), Securities to
deliver in satisfaction of a sale by such Purchaser of Securities which such
Purchaser was entitled to receive without a legend (a “Buy-In”), then the
Company shall (A) pay in cash to such Purchaser (in addition to any other
remedies available to or elected by such Purchaser) the amount by which (x) such
Purchaser’s total purchase price (including any brokerage commissions) for the
Securities so purchased exceeds (y) the product of (1) the aggregate number of
Securities at issue multiplied by (2) the actual sale price at which the sell
order giving rise to such purchase obligation was executed (including any
brokerage commissions) and (B) reissue (if surrendered) the type and number of
Securities equal to the type and number of Securities submitted for legend
removal. For example, if a Purchaser purchases common shares having a total
purchase price of $11,000 to cover a Buy-In with respect to which the actual
sale price (including any brokerage commissions) giving rise to such purchase
obligation was a total of $10,000 under clause (A) of the immediately preceding
sentence, the Company shall be required to pay such Purchaser $1,000. Such
Purchaser shall provide the Company written notice, within three (3) trading
days after the occurrence of a Buy-In, indicating the amounts payable to such
Purchaser in respect of such Buy-In together with applicable confirmations and
other evidence reasonably requested by the Company. Nothing herein shall limit a
Purchaser’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing Securities without legends as required pursuant to the
terms hereof; provided, however, that such Purchaser shall not be entitled to
both (i) require the reissuance of the Securities submitted for legend removal
for which such conversion was not timely honored and (ii) receive the type and
number of Securities that would have been issued if the Company had timely
complied with its delivery requirements hereunder.

 

 24 

 

 

4.2 Integration. The Company shall not, and shall use its reasonable best
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 Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or
that will be integrated with the offer or sale of the Securities for purposes of
the rules and regulations of any Trading Market such that it would require
stockholder approval prior to the closing of such other transaction.

 

4.3 Use of Proceeds. The Company shall use the net proceeds from the sale of the
Preferred Shares hereunder to fund the Company’s ongoing operational needs,
including to fund strategic acquisitions from time to time.

 

4.4 Principal Trading Market Listing. The Company shall, prior to the date
hereof, prepare and submit to The Nasdaq Capital Market a listing application
for the Conversion Shares.

 

4.5 Form D; Blue Sky. The Company agrees to timely file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof,
promptly upon the written request of either Purchaser. The Company, on or before
the Closing Date, shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Securities for sale to the Purchasers under applicable securities or “Blue Sky”
laws of the states of the United States (or to obtain an exemption from such
qualification) and shall provide evidence of such actions promptly upon the
written request of either Purchaser.

 

4.6 Reservation of Securities. The Company shall take all action necessary to at
all times have authorized, and reserved for the purpose of issuance from and
after the Closing Date, the number of shares of Common Stock issuable upon
conversion of the Series B Shares in accordance with the terms of the
Certificate of Designation.

 

4.7 Efforts to Consummate.

 

(a) Subject to the terms and conditions herein provided, each of the Purchasers
and the Company shall use reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things commercially reasonable
efforts, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement (including the
satisfaction, but not waiver, of the closing conditions set forth in Article V).

 

(b) Each of the Purchasers and the Company shall use commercially reasonable
efforts to obtain consents of all Governmental Entities necessary to consummate
the transactions contemplated by this Agreement (collectively, the “Governmental
Approvals”). Each of the Purchasers and the Company shall promptly inform the
other parties hereto of any communication between the Purchasers or the Company,
as applicable, and any Governmental Entity regarding any of the transactions
contemplated by this Agreement.

 

 25 

 

 

4.8 Board of Directors and 2020 Annual Meeting.

 

(a) The Company shall have taken all action necessary such that, effective as of
the Closing, the Company’s Board of Directors will consist of seven (7) members
and shall be comprised of:

 

(i) two (2) Class I Directors, (x) one of whom shall qualify as an “independent
director” under Rule 5605(a)(2) of the of the listing rules of the Nasdaq Stock
Market (or any successor rule) or under any similar rule promulgated by such
other exchange on which the Company’s securities are then listed or designated
(such director, an “Independent Director”), and shall initially be Stephen J.
Sullivan and (y) one of whom shall be designated by Ampersand and shall
initially be Eric Lev;

 

(ii) three (3) Class II Directors, (x) one of whom shall be an Independent
Director designated by Ampersand and shall initially be Robert Gorman, (y) one
of whom shall be an Independent Director designated by 1315 Capital at a future
date, and (z) one of whom shall be designated by 1315 Capital and shall
initially be Edward Chan; and

 

(iii) two (2) Class III Directors, (x) one of whom shall initially be Jack
Stover, and (y) one of whom shall be an Independent Director and shall initially
be Dr. Joseph Keegan.

 

(b) The Company shall use its reasonable best efforts to obtain the approval of
the Company’s stockholders at the 2020 Annual Meeting of an amendment to the
Company’s Certificate of Incorporation to eliminate the classified structure of
the Company’s Board of Directors and to provide that all members of the
Company’s Board of Directors shall stand for election at each annual meeting of
the Company’s stockholders. Each Investor hereby agrees to vote in favor of the
election of Jack Stover, Dr. Joseph Keegan and Stephen J. Sullivan to the
Company’s Board of Directors at the 2020 Annual Meeting.

 

4.9 Notification of Certain Matters. Notwithstanding anything else herein to the
contrary, the Company and each Purchaser shall give prompt written notice to
each other party of (a) any notice or other communication from any Person
alleging that any consent, waiver or approval from, or notification requirement
to, such Person is or may be required in connection with the transactions
contemplated by the Transaction Documents, (b) all effects, changes, events and
occurrences arising subsequent to the date of this Agreement which could
reasonably be expected to result in any breach of a representation or warranty
or covenant of the Company in this Agreement that would, if occurring or
continuing on the Closing Date, cause any of the conditions set forth in Article
V not to be satisfied, (c) any effect, change, event or occurrence that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect and (d) any litigation relating to the transactions
contemplated by the Transaction Documents (the “Transaction Litigation”) and any
updates to the status thereof. The Company and its Subsidiaries shall give the
Purchasers an opportunity to discuss with the Company and its representatives
any Transaction Litigation (subject to the entry into any joint defense or
similar agreement and otherwise subject to the protection of any attorney-client
or other similar doctrine or privilege) and the Company and its representatives
shall consider the Purchasers’ recommendations with respect thereto in good
faith. For the avoidance of doubt, no updated information provided in accordance
with this Section 4.9 shall be deemed to cure any breach of any representation,
warranty or covenant made in this Agreement or affect any rights under this
Agreement or the other Transaction Documents.

 

4.10 Consent. Subject to and effective as of the Closing, Ampersand, as holder
of all issued and outstanding Series A Shares, consents to the transactions
contemplated by this Agreement and waives its rights under Section 7 of the
Investor Rights Agreement, dated as of July 15, 2019, by and among the Company
and Ampersand.

 

 26 

 

 

Article V
CONDITIONS PRECEDENT TO CLOSINGs

 

5.1 Conditions Precedent to the Obligations of the Purchasers to Purchase
Preferred Shares at the Closing. The obligation of the Purchasers to acquire
Preferred Shares at the Closing is subject to the fulfillment to the Purchasers’
satisfaction, on or prior to the Closing Date, of each of the following
conditions, any of which may be waived by the Purchasers:

 

(a) Representations and Warranties. As of the Closing Date, the representations
and warranties of the Company contained in Article III (other than in Sections
3.1(g), 3.1(h), 3.1(i), 3.1(j), 3.1(k) (but only the first sentence thereof),
3.1(l), 3.1(w), and 3.1(yy)) shall be true and correct in all material respects
as though made on and as of such date, except for such representations and
warranties that speak as of a specific date (which shall be true and correct in
all material respects as of such date). As of the Closing Date, the
representations and warranties contained in Sections 3.1(g), 3.1(h), 3.1(w) and
3.1(yy) shall be true and correct in all respects as though made on and as of
such date, except for such representations and warranties that speak as of a
specific date (which shall be so true and correct as of such date). As of the
Closing Date, the representations and warranties contained in Sections 3.1(i),
3.1(j), 3.1(k) (but only the first sentence thereof) and 3.1(l) shall be true
and correct in all respects, except for any de minimis inaccuracies, as though
made on and as of such date, except for such representations and warranties that
speak as of a specific date (which shall be so true and correct as of such
date).

 

(b) Covenants. The Company shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by it at or prior to the Closing.

 

(c) No Material Adverse Effect. Since September 30, 2019, there has not occurred
any event or condition that has had or would reasonably be expected to have a
Material Adverse Effect.

 

(d) Listing on Nasdaq. The Company shall have filed with Nasdaq a Notification
Form: Listing of Additional Shares for the listing of Conversion Shares, a copy
of which shall have been provided to the Purchasers, and Nasdaq shall have
approved the listing of such Conversion Shares.

 

(e) No Injunction; Government Approvals. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or Governmental Entity of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(f) Certificate of Designation. The Certificate of Designation substantially in
the form attached hereto as Exhibit A shall have been filed with the Secretary
of State of the State of Delaware and shall be in full force and effect,
enforceable against the Company in accordance with its terms and shall not have
been amended.

 

(g) Reverse Stock Split. The reverse stock split of the Company’s Common Stock
previously approved by the stockholders of the Company shall have become
effective at a ratio acceptable to each Purchaser.

 

(h) Deliveries. Each Purchaser shall have received each of the agreements,
instruments and other documents set forth in Section 2.2(a).

 

 27 

 

 

5.2 Conditions Precedent to the Obligations of the Company to Issue Preferred
Shares at the Closing. The Company’s obligation to issue the Preferred Shares at
the Closing to each Purchaser is subject to the fulfillment to the satisfaction
of the Company on or prior to the Closing Date of the following conditions, any
of which may be waived by the Company:

 

(a) No Injunction; Governmental Approvals. No statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or Governmental Entity of competent
jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.

 

(b) Representations and Warranties. The representations and warranties of each
Purchaser contained in Article III shall be true and correct in all material
respects as of the Closing Date.

 

(c) Covenants. The Purchasers shall have performed and complied in all material
respects with all covenants, obligations and conditions of this Agreement
required to be performed and complied with by it at or prior to the Closing.

 

(d) Deliveries. The Company shall have received each of the agreements,
instruments and other documents set forth in Section 2.2(b).

 

Article VI
MISCELLANEOUS

 

6.1 Fees and Expenses. At the Closing, the Company shall pay (a) the reasonable
fees and expenses of 1315 Capital incurred in connection with the Closing, in an
amount not to exceed, in the aggregate, $150,000 and (b) the reasonable fees and
expenses of Ampersand incurred in connection with the Closing, in an amount not
to exceed, in the aggregate, $150,000.

 

6.2 Entire Agreement. The Transaction Documents together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules. At or after the Closing, and without further consideration, the
Company and the Purchasers will execute and deliver to the other such further
documents as may be reasonably requested in order to give practical effect to
the intention of the parties under the Transaction Documents.

 

6.3 Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed
given and effective on the earliest of (a) the date of transmission, if such
notice or communication is delivered via email (provided the sender does not
receive a machine-generated rejection of transmission) at the email address
specified in this Section 6.3 prior to 5:00 P.M., New York City time, on a
Business Day, (b) the next Business Day after the date of transmission, if such
notice or communication is delivered via email at the email address specified in
this Section 6.3 on a day that is not a Business Day or later than 5:00 P.M.,
New York City time, on any Business Day, (c) the Business Day following the date
of mailing, if sent by U.S. nationally recognized overnight courier service with
next day delivery specified, or (d) upon actual receipt by the party to whom
such notice is required to be given. The address for such notices and
communications shall be as follows:

 

  If to the Company: Interpace Biosciences, Inc.     Morris Corporate Center 1,
Building C     300 Interpace Parkway, Parsippany, NJ 07054     Attention: Jack
E. Stover, President and CEO     Email: jstover@interpacedx.com

 

 28 

 

 

  With a copy to: Pepper Hamilton LLP     620 Eighth Avenue, 37th Floor     New
York Times Building     New York, NY 10018     Attention: Merrill M. Kraines,
Esquire     Email: krainesm@pepperlaw.com         If to 1315 Capital: 1315
Capital II, L.P.     2929 Walnut Street, Suite 1240     Philadelphia, PA 19104  
  Attention: Brian Schwenk, Chief Financial Officer     Email:
brian.schwenk@1315capital.com         With a copy to: Morgan, Lewis & Bockius
LLP     1701 Market Street     Philadelphia, PA 19103-2921     Attention: Joanne
R. Soslow, Esquire     Email: joanne.soslow@morganlewis.com         If to
Ampersand: Ampersand 2018 Limited Partnership     c/o Ampersand Capital Partners
    55 William Street, Suite 240     Wellesley, MA 02481     Attn: Dana L.
Niles, Chief Operating Partner     Email: dln@ampersandcapital.com         With
a copy to: Goodwin Procter LLP     100 Northern Avenue     Boston, MA 02210    
Attention: James T. Barrett, Esq., and Jocelyn Arel, Esq.     Email:
JBarrett@goodwinlaw.com and JArel@goodwinlaw.com

 

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

 

6.4 Amendments; Waivers; No Additional Consideration. No provision of this
Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Company and each
Purchaser or, in the case of a waiver, by the party against whom enforcement of
any such waiver is sought. No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right. No consideration shall be offered or paid
to either Purchaser to amend or consent to a waiver or modification of any
provision of any Transaction Document unless the same consideration is also
offered to any holders who then hold Securities.

 

 29 

 

 

6.5 Construction; Interpretation. The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement or any of the
Transaction Documents. Unless otherwise indicated to the contrary herein by the
context or use thereof: (i) the words, “herein,” “hereto,” “hereof” and words of
similar import refer to this Agreement as a whole, including the Schedules and
exhibits, and not to any particular section, subsection, paragraph, subparagraph
or clause contained in this Agreement; (ii) masculine gender shall also include
the feminine and neutral genders, and vice versa; (iii) words importing the
singular shall also include the plural, and vice versa; (iv) the words
“include,” “includes” or “including” shall be deemed to be followed by the words
“without limitation”; (v) financial terms shall have the meanings given to such
terms under GAAP unless otherwise specified herein; (vi) references to “$” or
“dollar” or “US$” shall be references to United States dollars; (vii) where the
context permits, the use of the term “or” will be non-exclusive and equivalent
to the use of the term “and/or”; (viii) the word “extent” in the phrase “to the
extent” shall mean the degree to which a subject or other thing extends, and
such phrase shall not mean simply “if”; and (ix) if any action under this
Agreement is required to be done or taken on a day that is not a Business Day or
on which a government office is not open with respect to which a filing must be
made, then such action shall be required to be done or taken not on such day but
on the first succeeding Business Day thereafter.

 

6.6 Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parties and their successors and permitted
assigns. This Agreement, or any rights or obligations hereunder, may not be
assigned by the Company without the prior written consent of each Purchaser. Any
Purchaser may assign its rights hereunder in whole or in part to any Person to
whom such Purchaser assigns or transfers such rights in compliance with
applicable law, provided such transferee shall agree in writing to be bound,
with respect to any Securities transferred in connection with such assignment,
by the terms and conditions of this Agreement and the Investor Rights Agreement
that apply to the “Purchasers;” provided, further, that, such Purchaser remains
liable for its obligations hereunder.

 

6.7 No Third-Party Beneficiaries. Except as set forth in Section 6.13 and
Section 6.14, this Agreement is intended for the benefit of the parties hereto
and their respective successors and permitted assigns and is not for the benefit
of and shall not confer any rights or remedies on, nor may any provision hereof
be enforced by, any other Person.

 

6.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Delaware, without regard to the principles of conflicts of law thereof. Each
party agrees that all 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, employees or agents) shall be commenced exclusively in the Delaware
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Delaware Courts 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 Proceeding, any claim that it is not personally subject to the
jurisdiction of any such Delaware Court, or that such Proceeding has been
commenced in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such 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 manner permitted by law. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

 30 

 

 

6.9 Survival. Subject to applicable statute of limitations, the representations,
warranties, agreements and covenants contained herein shall survive the Closing
and the delivery of the Preferred Shares at the Closing.

 

6.10 Execution. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile transmission, or by email delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile signature page were an original thereof.

 

6.11 Severability. If any provision of this Agreement is held to be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Agreement shall not in any way be affected or
impaired thereby and the parties will attempt to agree upon a valid and
enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

6.12 Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction
Documents. The parties agree that monetary damages may not be adequate
compensation for any loss incurred by reason of any breach of obligations
described in the foregoing sentence and hereby agree to waive in any action for
specific performance of any such obligation (other than in connection with any
action for a temporary restraining order) the defense that a remedy at law would
be adequate.

 

6.13 Limitation of Liability; No Recourse.

 

(a) Notwithstanding anything that may be expressed or implied in this Agreement,
the liability of each Purchaser hereunder shall be several, not joint and
several, and, under no circumstance, shall any Purchaser be liable for any
amounts hereunder or pursuant to claims related to any breach or alleged breach
of this Agreement in excess of its Closing Subscription Amount.

 

(b) Notwithstanding anything that may be expressed or implied in this Agreement,
and notwithstanding the fact that one or more Purchasers may be a corporation,
partnership, limited liability company or trust, the Company and each Purchaser
covenant, agree and acknowledge that no recourse under this Agreement, any
Transaction Document, or any other documents or instruments delivered in
connection with this Agreement shall be had against any current or future
Affiliate, director, officer, employee, general or limited partner, stockholder,
manager, member, trustee or control persons (as such term is used in the
Securities Act, as amended, and the rules and regulations thereunder) of any
Purchaser or any director, officer, employee, general or limited partner,
stockholder, manager, member, trustee or control persons (as such term is used
in the Securities Act, as amended, and the rules and regulations thereunder),
Affiliate or assignee thereof (collectively, “Purchaser Related Parties”),
whether by the enforcement of any assessment or by any legal or equitable
Proceeding, or by virtue of any statute, regulation or other applicable law, it
being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise be incurred by any current or future
officer, agent or employee of any Purchaser or any current or future director,
officer, employee, general or limited partner, stockholder, manager, member or
trustee of any Purchaser or of any Affiliate or assignee thereof, as such for
any obligation of any Purchaser under this Agreement, any Transaction Document,
or any other documents or instruments delivered in connection with this
Agreement for any claim based on, in respect of or by reason of such obligations
or their creation.

 

 31 

 

 

6.14 Indemnification. The Company will indemnify each Purchaser Related Party to
the full extent lawful against any and all claims by any Person (including any
stockholders of the Company), losses and expenses as incurred (including all
reasonable fees and disbursements of any such indemnitee’s counsel and other
out-of-pocket expenses incurred in connection with the investigation of and
preparation for any such pending or threatened claims and any litigation or
other Proceedings arising therefrom) arising in connection with this Agreement,
any of the other Transaction Documents, or any transactions contemplated hereby
or thereby, or in connection with any action or failure to take any action in
connection therewith or any such indemnitee being a controlling person of a
Purchaser Related Party or any of its subsidiaries; provided, however, there
shall be excluded from such indemnification (x) any such claim, loss or expense
to the extent that it is based upon any action or failure to act by such
indemnitee that is found in a final judicial determination to constitute gross
negligence or intentional misconduct on such indemnitee’s part and (y) any such
claim, or loss or expense to the extent that it is based on such claim, brought
by the Company against a Purchaser (but not on behalf of the Company by any of
its stockholders) for a breach of this Agreement by such Purchaser. The Company
will advance costs and expenses, including attorney’s fees, incurred by any such
indemnitee in defending any such claim in advance of the final disposition of
such claim upon receipt of an undertaking by or on behalf of such indemnitee to
repay amounts so advanced if it shall ultimately be determined that such
indemnitee is not entitled to be indemnified by the Company pursuant to this
Agreement.

 

6.15 Termination. This Agreement may be terminated and transactions contemplated
hereby abandoned at any time prior to the Closing: (i) by mutual written consent
of the Company and each Purchaser or (ii) by either Purchaser if the Company or
any of its Affiliates institutes, directly or indirectly, any action, litigation
or other Proceeding against (x) any Purchaser Related Parties in connection with
the transactions described in this Agreement or the Transaction Documents or (y)
such Purchaser in connection with the transactions described in this Agreement,
other than in the case of clause (y), an action, litigation or other Proceeding
seeking to enforce this Agreement in accordance with its terms. Nothing in this
Section 6.15 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, and Sections 6.13 and 6.14 shall survive the
termination of this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 32 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase and
Exchange Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

 INTERPACE BIOSCIENCES, INC.     By: /s/ Jack E. Stover  Name: Jack E. Stover
 Title: President & Chief Executive Officer

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

[Signature Page to Securities Purchase and Exchange Agreement]

 

 

 

 

  1315 CAPITAL II, L.P.       By: 1315 CAPITAL MANAGEMENT II, LLC, its General
Partner         By: /s/ Adele C. Oliva   Name: Adele C. Oliva   Title: Managing
Member         Ampersand 2018 Limited Partnership       By: AMP-18 Management
Company Limited Partnership, its General Partner         By: AMP-18 MC LLC, its
General Partner         By: /s/ Herbert H. Hooper   Name: Herbert H. Hooper  
Title: Managing Member

 

[Signature Page to Securities Purchase and Exchange Agreement]

 

 

 

 

Schedule I

 

Purchaser   Series B Shares   Closing Subscription Amount 1315 capital II, L.P.
  19,000   $19,000,000.00 Ampersand 2018 Limited Partnership   1,000  
$1,000,000.00

 

   

  

 

Schedule II

 

Purchaser   Series A Shares to be Exchanged   Series B Shares to be Issued
Ampersand 2018 Limited Partnership   270   27,000

 

   

  

 

EXHIBITS

 

A: Certificate of Designation B: Form of Investor Rights Agreement C: Wire
Instructions D-1: Accredited Investor Questionnaire D-2: Stock Certificate
Questionnaire E: Form of Secretary’s Certificate F: Form of Officer’s
Certificate

 

Schedule A: Form of Opinion Schedule B: Subsidiaries

 

   

  

 

EXHIBIT A

 

Certificate of Designation

 

A-1

 

 

INTERPACE BIOSCIENCES, INC.
CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS

 

OF

 

SERIES B CONVERTIBLE PREFERRED STOCK

 

PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW

 

INTERPACE BIOSCIENCES, INC., a Delaware corporation (the “Corporation”), in
accordance with the provisions of Section 103 of the Delaware General
Corporation Law (the “DGCL”) does hereby certify that, in accordance with
Section 151 of the DGCL, the following resolution was duly adopted by the Board
of Directors of the Corporation on January [•], 2020:

 

RESOLVED, pursuant to authority expressly set forth in the Certificate of
Incorporation of the Corporation (the “Certificate of Incorporation”), the
issuance of a series of Preferred Stock designated as the Series B Convertible
Preferred Stock, par value $0.01 per share, of the Corporation is hereby
authorized and the designation, number of shares, powers, preferences, rights,
qualifications, limitations and restrictions thereof (in addition to any
provisions set forth in the Certificate of Incorporation that are applicable to
the Preferred Stock of all classes and series) are hereby fixed, and this
Certificate of Designation of Preferences, Rights and Limitations of Series B
Convertible Preferred Stock is hereby approved as follows:

 

SERIES B CONVERTIBLE PREFERRED STOCK

 

Section 1. Definitions. For the purposes hereof, the following terms shall have
the following meanings:

 

“1315 Capital” means 1315 Capital II, L.P., a Delaware limited partnership,
including its successors and assigns.

 

“Ampersand” means Ampersand 2018 Limited Partnership, a Delaware limited
partnership, including its successors and assigns.

 

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, is controlled by or
is under common control with such Person, as such terms are used in and
construed under Rule 405 under the Securities Act. With respect to a Purchaser,
any investment fund or managed account that is managed on a discretionary basis
by the same investment manager as such Purchaser will be deemed to be an
Affiliate of such Purchaser.

 

A-2

 

 

“Business Day” means any day except Saturday, Sunday, any day which shall be a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

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

 

“Common Stock” means the Corporation’s common stock, par value $0.01 per share.

 

“Conversion Shares” means, collectively, the shares of Common Stock issuable
upon conversion of the shares of Series B Preferred Stock in accordance with the
terms hereof.

 

“Convertible Securities” shall mean any evidences of indebtedness, shares or
other securities directly or indirectly convertible into or exchangeable for
Common Stock, but excluding Options.

 

“Deemed Liquidation” shall mean (a) a merger or consolidation in which (i) the
Corporation is a constituent party or (ii) a subsidiary of the Corporation is a
constituent party and the Corporation issues shares of its capital stock
pursuant to such merger or consolidation, except any such merger or
consolidation involving the Corporation or a subsidiary in which the shares of
capital stock of the Corporation outstanding immediately prior to such merger or
consolidation continue to represent, or are converted into or exchanged for
shares of capital stock that represent, immediately following such merger or
consolidation, at least a majority, by voting power, of the capital stock of (1)
the surviving or resulting corporation; or (2) if the surviving or resulting
corporation is a wholly owned subsidiary of another corporation immediately
following such merger or consolidation, the parent corporation of such surviving
or resulting corporation; or (b) the sale, lease, transfer, exclusive license or
other disposition, in a single transaction or series of related transactions, by
the Corporation or any subsidiary of the Corporation of all or substantially all
the assets of the Corporation and its subsidiaries taken as a whole, or the sale
or disposition (whether by merger, consolidation or otherwise) of one or more
subsidiaries of the Corporation if substantially all of the assets of the
Corporation and its subsidiaries taken as a whole are held by such subsidiary or
subsidiaries, except where such sale, lease, transfer, exclusive license or
other disposition is to a wholly owned subsidiary of the Corporation.

 

“DGCL” shall mean the Delaware General Corporation Law.

 

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

 

“Holder” means any holder of Series B Preferred Stock.

 

“Issuance Date” means January [•], 2020.

 

“Option” shall mean rights, options or warrants to subscribe for, purchase or
otherwise acquire Common Stock or Convertible Securities.

 

A-3

 

 

“Person” means any individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Preferred Stock” means the Corporation’s preferred stock, par value $0.01 per
share.

 

“Series B Conversion Price” means an amount initially equal to six dollars
($6.00) (subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization affecting such
shares).

 

“Series B Conversion Ratio” means, for each share of Series B Preferred Stock,
the ratio obtained by dividing the Series B Liquidation Amount of such share by
the Series B Conversion Price.

 

“Series B Liquidation Amount” has the meaning set forth in Section 5(a).

 

“Series B Liquidation Value” means an amount equal to the Series B Liquidation
Amount divided by the number of shares of Series B Preferred Stock outstanding.

 

“Series B Mandatory Conversion Price” means an amount equal to twelve dollars
($12.00).

 

“Stated Value” means $1,000 per share.

 

“Trading Day” means a day on which the Common Stock is traded for any period on
a principal securities exchange or if the Common Stock is not traded on a
principal securities exchange, on a day that the Common Stock is traded on
another securities market on which the Common Stock is then being traded.

 

Section 2. Designation, Amount and Par Value; Assignment.

 

(a) The Preferred Stock designated by this Certificate of Designation shall be
designated as the Corporation’s Series B Convertible Preferred Stock (the
“Series B Preferred Stock”) and the number of shares so designated shall be
47,000.

 

(b) The Corporation shall register shares of the Series B Preferred Stock, upon
records to be maintained by the Corporation for that purpose (the “Series B
Preferred Stock Register”), in the name of the Holders thereof from time to
time. The Corporation may deem and treat the registered Holder of shares of
Series B Preferred Stock as the absolute owner thereof for the purpose of any
conversion thereof and for all other purposes. Shares of Series B Preferred
Stock may be issued solely in book-entry form or, if requested by any Holder,
such Holder’s shares may be issued in certificated form. The Corporation shall
register the transfer of any shares of Series B Preferred Stock in the Series B
Preferred Stock Register, upon surrender of the certificates (if applicable)
evidencing such shares to be transferred, duly endorsed by the Holder thereof,
to the Corporation at its address specified herein. Upon any such registration
or transfer, a new certificate (or book-entry notation, if applicable)
evidencing the shares of Series B Preferred Stock so transferred shall be issued
to the transferee and a new certificate (or book-entry notation, if applicable)
evidencing the remaining portion of the shares not so transferred, if any, shall
be issued to the transferring Holder, in each case, within two (2) Business
Days. The provisions of this Certificate of Designation are intended to be for
the benefit of all Holders from time to time and shall be enforceable by any
such Holder.

 

A-4

 

 

Section 3. Dividends. Dividends may be declared and paid on the Series B
Preferred Stock from funds lawfully available therefor as and when determined by
the Corporation’s Board of Directors. The Corporation shall not declare, pay or
set aside any dividends on shares of any other class or series of capital stock
of the Corporation (other than dividends on shares of Common Stock payable in
shares of Common Stock) unless the Holders of the Series B Preferred Stock then
outstanding shall first receive, or simultaneously receive, a dividend on each
outstanding share of Series B Preferred Stock in an amount at least equal to (A)
in the case of a dividend on Common Stock or any class or series that is
convertible into Common Stock, that dividend per share of Series B Preferred
Stock as would equal the product of (1) the dividend payable on each share of
such class or series determined, if applicable, as if all shares of such class
or series had been converted into Common Stock and (2) the number of shares of
Common Stock issuable upon conversion of a share of Series B Preferred Stock
pursuant to Section 6, in each case calculated on the record date for
determination of holders entitled to receive such dividend or (B) in the case of
a dividend on any class or series that is not convertible into Common Stock, at
a rate per share of Series B Preferred Stock determined by (1) dividing the
amount of the dividend payable on each share of such class or series of capital
stock by the original issuance price of such class or series of capital stock
(subject to appropriate adjustment in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such shares) and
(2) multiplying such fraction by an amount equal to the Stated Value; provided
that, if the Corporation declares, pays or sets aside, on the same date, a
dividend on shares of more than one class or series of capital stock of the
Corporation, the dividend payable to the Holders of Series B Preferred Stock
pursuant to this Section 3 shall be calculated based upon the dividend on the
class or series of capital stock that would result in the highest Series B
Preferred Stock dividend.

 

Section 4. Voting Rights.

 

(a) Series B Preferred Stock Voting Rights. On any matter presented to the
stockholders of the Corporation for their action or consideration at any meeting
of stockholders of the Corporation (or by written consent of stockholders in
lieu of meeting), each Holder of outstanding shares of Series B Preferred Stock
shall be entitled to cast the number of votes equal to the number of whole
shares of Common Stock into which the shares of Series B Preferred Stock held by
such Holder are convertible as of the record date for determining stockholders
entitled to vote on such matter. Except as provided by law or by the other
provisions of this Certificate of Designation, Holders of Series B Preferred
Stock shall vote together with the holders of Common Stock as a single class and
on an as-converted to Common Stock basis.

 

A-5

 

 

(b) Directors.

 

(i) For so long as Ampersand holds at least sixty percent (60%) of the Series B
Preferred Stock held by Ampersand as of the Issuance Date, Ampersand shall be
entitled to elect two (2) directors of the Corporation, provided that one (1)
director elected by Ampersand must qualify as an “independent director” under
Rule 5605(a)(2) of the of the listing rules of the Nasdaq Stock Market (or any
successor rule) or under any similar rule promulgated by such other exchange on
which the Corporation’s securities are then listed or designated. For so long as
Ampersand holds less than sixty percent (60%) of the Series B Preferred Stock
held by Ampersand as of the Issuance Date but at least forty percent (40%) of
the Series B Preferred Stock held by Ampersand as of the Issuance Date,
Ampersand shall be entitled to elect one (1) director of the Corporation.

 

(ii) For so long as 1315 Capital holds at least sixty percent (60%) of the
Series B Preferred Stock held by 1315 Capital as of the Issuance Date, 1315
Capital shall be entitled to elect two (2) directors of the Corporation,
provided that one (1) director elected by 1315 Capital must qualify as an
“independent director” under Rule 5605(a)(2) of the of the listing rules of the
Nasdaq Stock Market (or any successor rule) or under any similar rule
promulgated by such other exchange on which the Corporation’s securities are
then listed or designated. For so long as 1315 Capital holds less than sixty
percent (60%) of the Series B Preferred Stock held by 1315 Capital as of the
Issuance Date but at least forty percent (40%) of the Series B Preferred Stock
held by 1315 Capital as of the Issuance Date, 1315 Capital shall be entitled to
elect one (1) director of the Corporation.

 

(iii) The holders of record of the shares of Common Stock and of any other class
or series of voting stock (including the Series B Preferred Stock), exclusively
and voting together as a single class, shall, subject to the rights of any
additional series of Preferred Stock that may be established from time to time,
be entitled to elect the balance of the total number of directors of the
Corporation. At any meeting held for the purpose of electing a director, the
presence in person or by proxy of the holders of a majority of the outstanding
shares of the class or series entitled to elect such director shall constitute a
quorum for the purpose of electing such director.

 

(iv) Any director elected pursuant to this Section 4(b) may be removed without
cause by, and only by, the affirmative vote of the holders of the shares of the
class or series of capital stock entitled to elect such director or directors,
given either at a special meeting of such stockholders duly called for that
purpose or pursuant to a written consent of stockholders. A vacancy in any
directorship filled by the holders of any class or series shall be filled only
by vote or written consent in lieu of a meeting of the holders of such class or
series or by any remaining director or directors elected by the holders of such
class or series pursuant to this Section 4(b).

 

(c) Protective Provisions. Notwithstanding anything in this Certificate of
Designation to the contrary, for so long as any shares of the Series B Preferred
Stock remain outstanding, the following actions may only be taken by the
Corporation or any of its direct or indirect subsidiaries with the written
consent of Holders representing at least seventy-five percent (75%) of the
outstanding shares of Series B Preferred Stock (voting as a single class):

 

(i) amend, waive, alter or repeal the preferences, rights, privileges or powers
of the Holders of the Series B Preferred Stock;

 

A-6

 

 

(ii) amend, alter or repeal any provision of this Certificate of Designation in
a manner that is adverse to the Holders of Series B Preferred Stock;

 

(iii) authorize, create or issue any equity securities senior to or pari passu
with the Series B Preferred Stock; or

 

(iv) increase or decrease the number of directors constituting the Board of
Directors of the Corporation.

 

(d) Additional Protective Provisions. Notwithstanding anything in this
Certificate of Designation to the contrary, for so long as at least thirty
percent (30%) of the Series B Preferred Stock outstanding as of the Issuance
Date remains outstanding (subject to appropriate adjustment in the event of any
stock dividend, stock split, combination or other similar recapitalization
affecting such shares), the following actions may only be taken by the
Corporation or any of its direct or indirect subsidiaries with the written
consent with the consent of Holders representing at least seventy-five percent
(75%) of the outstanding shares of Series B Preferred Stock (voting as a single
class):

 

(i) (1) authorize, create or issue any debt securities for borrowed money or
funded debt pursuant to which the Corporation or any of its direct or indirect
subsidiaries issues shares, warrants or any other convertible security in the
same transaction or a series of related transactions; or (2) authorize, create
or issue any debt securities for borrowed money or funded debt pursuant to which
the Corporation or any of its direct or indirect subsidiaries does not issue
shares, warrants or any other convertible security in the same transaction or a
series of related transactions exceeding $4.5 million initially (the “Debt
Threshold”), excluding, however: (i) any capitalized and operating leases
entered into by the Corporation or its direct or indirect subsidiaries in the
ordinary course of business consistent with past practice and (ii) any debt
incurred by the Corporation pursuant to the terms of the Corporation’s existing
term loan and credit facility with Silicon Valley Bank; provided, that if the
aggregate consolidated revenue recognized by the Corporation and its direct or
indirect subsidiaries (the “Combined Revenue”) as reported by the Corporation on
Form 10-K as filed with the Commission for any fiscal year ending after the
Issuance Date exceeds $45 million dollars, the Debt Threshold for the following
fiscal year shall increase to an amount equal to: (x) ten percent (10%);
multiplied by (y) the Combined Revenue as reported by the Corporation on Form
10-K as filed with the Commission for the previous fiscal year;

 

(ii) merge with or acquire all or substantially all of the assets of one or more
other companies or entities with a value in excess of $20 million (the
“Acquisition Threshold”); provided, that the Acquisition Threshold shall
increase on a straight line basis to an amount up to $40 million, but in no
event greater than $40 million, to the extent Combined Revenue for the then-most
recently completed quarterly period as reported by the Corporation on Form 10-K
as filed with the Commission or Form 10-Q as filed with the Commission, as
applicable, falls between the Combined Revenue for the Corporation’s fiscal
quarter ended on September 30, 2019, and 100% greater than the Combined Revenue
for the Corporation’s fiscal quarter ended on September 30, 2019;

 

A-7

 

 

(iii) materially change the nature of the business of the Corporation or any of
its direct or indirect subsidiaries as it is proposed to be conducted as of the
Issuance Date.;

 

(iv) consummate any Liquidation (as defined below);

 

(v) transfer, by sale, exclusive license or otherwise, material intellectual
property rights of the Corporation or any of its direct or indirect
subsidiaries, other than licenses, transfers or sales of products accomplished
in the ordinary course of business consistent with past practice;

 

(vi) declare or pay any cash dividend or make any cash distribution on any
equity interests of the Corporation other than the Series B Preferred Stock;

 

(vii) repurchase or redeem any shares of capital stock of the Corporation,
except for: (1) the redemption of the Series B Preferred Stock pursuant to
Section 5(d); or (2) repurchases of Common Stock under agreements previously
approved by the Board of Directors of the Corporation with employees,
consultants, advisors or others who performed services for the Corporation or
any direct or indirect subsidiary in connection with the cessation of such
employment or service;

 

(viii) (1) incur any additional individual debt, indebtedness for borrowed money
or other additional liabilities pursuant to which the Corporation or any of its
direct or indirect subsidiaries issues shares, warrants or any other convertible
security in the same transaction or a series of related transactions; or (2)
incur any individual debt, indebtedness for borrowed money or other liabilities
pursuant to which the Corporation or any of its direct or indirect subsidiaries
does not issue shares, warrants or any other convertible security in the same
transaction or a series of related transactions in excess of the Debt Threshold
(in each case, excluding: (x) any capitalized and operating leases entered into
by the Corporation or its direct or indirect subsidiaries in the ordinary course
of business consistent with past practice; (y) any debt incurred by the
Corporation pursuant to the terms of the Corporation’s existing term loan and
credit facility with Silicon Valley Bank; and (z) any purchase money financing
in connection with the acquisition of equipment or otherwise);

 

(ix) change any accounting methods or practices of the Corporation or any of its
direct or indirect subsidiaries, except for those changes required by GAAP or
applicable regulatory agencies or authorities, including but not limited to the
Securities and Exchange Commission and the Financial Accounting Standards Board,
in each case, as consented to by the Corporation’s independent auditors; or

 

(x) conduct a public offering of Common Stock registered with the Securities and
Exchange Commission, including any at-the-market offering of the Corporation’s
Common Stock.

 

A-8

 

 

Section 5. Liquidation.

 

(a) In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation or Deemed Liquidation (a “Liquidation”), the
Holders of shares of Series B Preferred Stock then outstanding shall be entitled
to be paid out of the assets of the Corporation available for distribution to
its stockholders (on a pari passu basis with the holders of any class or series
of Preferred Stock ranking on liquidation on a parity with the Series B
Preferred Stock), and before any payment shall be made to the holders of Common
Stock or any other class or series of Preferred Stock ranking on liquidation
junior to the Series B Preferred Stock by reason of their ownership thereof, an
amount per share of Series B Preferred Stock equal to the greater of (i) the
Stated Value of such share of Series B Preferred Stock, plus any dividends
declared but unpaid thereon, or (ii) such amount per share as would have been
payable had each such share been converted into Common Stock pursuant to Section
6 immediately prior to such Liquidation, (the amount payable in respect of
shares of Series B Preferred Stock pursuant to this sentence is hereinafter
referred to as the “Series B Liquidation Amount”). If upon any such Liquidation,
the assets of the Corporation available for distribution to its stockholders
shall be insufficient to pay the Holders of shares of Series B Preferred Stock
and any series of Preferred Stock ranking on liquidation on a parity with the
Series B Preferred Stock the full amount to which they shall be entitled under
this Section 5(a), the Holders of shares of Series B Preferred Stock and any
series of Preferred Stock ranking on liquidation on a parity with the Series B
Preferred Stock shall share ratably in any distribution of the assets available
for distribution in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.

 

(b) In the event of any Liquidation, after the payment of all preferential
amounts required to be paid to the Holders of shares of Series B Preferred Stock
and any other series of Preferred Stock ranking on liquidation senior to the
Common Stock, the remaining assets of the Corporation available for distribution
to its stockholders shall be distributed among the holders of shares of Common
Stock, pro rata based on the number of shares held by each such holder.

 

(c) The Corporation shall not have the power to effect a Deemed Liquidation
unless the definitive agreement regarding such transaction provides that the
consideration payable to the stockholders of the Corporation shall be allocated
among the holders of capital stock of the Corporation in accordance with Section
5 of this Certificate of Designation.

 

A-9

 

 

(d) If following a Deemed Liquidation the Corporation does not effect a
dissolution of the Corporation under the General Corporation Law within sixty
(60) days after such Deemed Liquidation, then (i) the Corporation shall send a
written notice to each Holder of Series B Preferred Stock no later than the
sixtieth (60th) day after the Deemed Liquidation advising such Holders of their
right (and the requirements to be met to secure such right) pursuant to the
terms of the following clause (ii) to require the redemption of such shares of
Series B Preferred Stock, and (ii) if the Holders of at least seventy-five
percent (75%) of the then outstanding shares of Series B Preferred Stock so
request in a written instrument delivered to the Corporation not later than
sixty (60) days after receipt of such notice, the Corporation shall use the
consideration received by the Corporation for such Deemed Liquidation (net of
any retained liabilities associated with the assets sold or technology licensed,
as determined in good faith by the Board of Directors of the Corporation) (the
“Net Proceeds”), to the extent legally available therefor, on the one hundred
fiftieth (150th) day after such Deemed Liquidation, to redeem all outstanding
shares of Series B Preferred Stock at a price per share equal to the Series B
Liquidation Value. Notwithstanding the foregoing, in the event of a redemption
pursuant to the preceding sentence, if the Net Proceeds are not sufficient to
redeem all outstanding shares of Series B Preferred Stock and of any other
series of Preferred Stock ranking on redemption on parity with the Series B
Preferred Stock that is required to then be redeemed, or if the Corporation does
not have sufficient lawfully available funds to effect such redemption, the
Corporation shall first redeem a pro rata portion of each Holder’s shares of
Series B Preferred Stock and any such other series of Preferred Stock ranking on
redemption on a parity with the Series B Preferred Stock to the fullest extent
of such Net Proceeds or such lawfully available funds, as the case may be, based
on the respective amounts which would otherwise be payable in respect of the
shares to be redeemed if the legally available funds were sufficient to redeem
all such shares. If upon any such redemption, the assets of the Corporation
lawfully available to effect such redemption shall be insufficient to pay the
Holders of shares of Series B Preferred Stock and any series of Preferred Stock
ranking on redemption on a parity with the Series B Preferred Stock, the full
amount to which they shall be entitled under this Section 5(d), the Holders of
shares of Series B Preferred Stock and any series of Preferred Stock ranking on
redemption on a parity with the Series B Preferred Stock shall share ratably in
any distribution of the assets lawfully available for such redemption in
proportion to the respective amounts which would otherwise be payable in respect
of the shares held by them upon such redemption if all amounts payable on or
with respect to such shares were paid in full, and shall redeem the remaining
shares to have been redeemed as soon as practicable after the Corporation has
funds legally available therefor. Prior to the distribution or redemption
provided for in this Section 5(d), the Corporation shall not expend or dissipate
the consideration received for such Deemed Liquidation, except to discharge
expenses incurred in connection with such Deemed Liquidation or in the ordinary
course of business consistent with past practice.

 

(e) The amount deemed paid or distributed to the holders of capital stock of the
Corporation upon any Liquidation Event shall be the cash or the value of the
property, rights or securities paid or distributed to such holders by the
Corporation or the acquiring person, firm or other entity; provided, that the
value of any such non-cash property, rights or securities shall be determined in
good faith by the Board of Directors of the Corporation.

 

A-10

 

 

Section 6. Conversion of Series B Preferred Stock into Common Stock.

 

(a) Conversion of Series B Preferred Stock into Common Stock at Option of
Holder.

 

Subject to Section 6(c) below, each share of Series B Preferred Stock shall be
convertible, at any time and from time to time from and after the Issuance Date,
at the option of the Holder thereof, into a number of shares of Common Stock
equal to the product of the Series B Conversion Ratio and the number of shares
of Series B Preferred Stock to be converted. Holders shall effect conversions of
Series B Preferred Stock into Common Stock by providing the Corporation with the
form of conversion notice attached hereto as Annex A (a “Notice of Conversion”),
duly completed and executed. Provided the Corporation’s transfer agent is
participating in the Depository Trust Corporation (“DTC”) Fast Automated
Securities Transfer program, the Notice of Conversion may specify, at the
Holder’s election, whether the applicable Conversion Shares shall be credited to
the DTC participant account nominated by the Holder through DTC’s Deposit
Withdrawal Agent Commission system (a “DWAC Delivery”). The “Optional Conversion
Date”, or the date on which a conversion shall be deemed effective, shall be
defined as the Trading Day after the Trading Date that the Notice of Conversion,
completed and executed, is sent by facsimile or other electronic transmission
to, and received during regular business hours by, the Corporation; provided
that the original certificate(s) (if any) representing such shares of Series B
Preferred Stock being converted, duly endorsed, and the accompanying Notice of
Conversion, are received by the Corporation within two (2) Trading Days
thereafter. In all other cases, the Optional Conversion Date shall be defined as
the Trading Day after the Trading Date on which the original shares of Series B
Preferred Stock being converted, duly endorsed, and the accompanying Notice of
Conversion, are received by the Corporation.

 

(b) Mandatory Conversion of Series B Preferred Stock into Common Stock. If the
Corporation consummates the sale of shares of Common Stock to the public in a
firm-commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, pursuant to
which (A) the price per share of the Common Stock in such offering is at least
the Series B Mandatory Conversion Price (subject to appropriate adjustment in
the event of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares) and (B) such offering results in at
least $25 million in proceeds, net of the underwriting discount and commissions,
to the Corporation and the Common Stock continues to be listed for trading on
the Nasdaq Capital Market or another Exchange such as NYSE (such offering, an
“Underwritten Offering”, and the date of the consummation of such Underwritten
Offering is referred to herein as the “Mandatory Conversion Date” and together
with each Optional Conversion Date, a “Conversion Date”), (i) all outstanding
shares of Series B Preferred Stock shall automatically be converted into shares
of Common Stock, at the then effective Series B Conversion Ratio and (ii) such
shares may not be reissued by the Corporation. The provisions of Section 6(c)
shall apply, with such necessary changes in the details thereof as are
necessitated by the context, to the conversion of shares of Series B Preferred
Stock into Common Stock pursuant to this Section 6(b). Notwithstanding the
foregoing, an Underwritten Offering shall not include, and shares of Series B
Preferred Stock will not automatically convert to shares of Common Stock upon
the consummation of, any Underwritten Offering that includes the issuance of
warrants to purchase capital stock of the Corporation or any other Convertible
Security.

 

A-11

 

 

(c) Mechanics of Conversion of Series B Preferred Stock into Common Stock.

 

(i) Delivery of Certificate or Electronic Issuance Upon Conversion. Not later
than three (3) Trading Days after the applicable Conversion Date (the “Share
Delivery Date”), the Corporation shall electronically transfer the number of
Conversion Shares set forth in a Notice of Conversion being acquired upon the
conversion of shares of Series B Preferred Stock by crediting the DTC
participant account nominated by the Holder through DTC’s DWAC system. If in the
case such shares are not electronically delivered to or as directed by, the
applicable Holder by the Share Delivery Date, the applicable Holder shall be
entitled to elect to rescind such Notice of Conversion by written notice to the
Corporation at any time on or before its receipt of such certificate or
certificates for Conversion Shares or electronic receipt of such shares, as
applicable, in which event the Corporation shall promptly return to such Holder
any original Series B Preferred Stock certificate delivered to the Corporation
and such Holder shall promptly direct the return of any shares of Common Stock
delivered to the Holder through the DWAC system, representing the shares of
Series B Preferred Stock unsuccessfully tendered for conversion to the
Corporation.

 

(ii) Obligation Absolute. Subject to Holder’s right to rescind a Notice of
Conversion pursuant to Section 6(c)(i) above, the Corporation’s obligation to
issue and deliver the Conversion Shares upon conversion of Series B Preferred
Stock in accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by a Holder to enforce the same, any
waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by such Holder or any other Person of any obligation to the Corporation
or any violation or alleged violation of law by such Holder or any other Person,
and irrespective of any other circumstance which might otherwise limit such
obligation of the Corporation to such Holder in connection with the issuance of
such Conversion Shares. Nothing herein shall limit a Holder’s right to pursue
actual damages for the Corporation’s failure to deliver Conversion Shares within
the period specified herein and such Holder shall have the right to pursue all
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief; provided
that Holder shall not receive duplicate damages for the Corporation’s failure to
deliver Conversion Shares within the period specified herein. The exercise of
any such rights shall not prohibit a Holder from seeking to enforce damages
pursuant to any other Section hereof or under applicable law.

 

(iii) Compensation for Buy-In on Failure to Timely Deliver Shares Upon
Conversion. If the Corporation fails to effect a DWAC Delivery that represents
shares of Common Stock by the Share Delivery Date pursuant to Section 6(c)(i)
(other than a failure caused by incorrect or incomplete information provided by
Holder to the Corporation), and if after such Share Delivery Date such Holder is
required to or otherwise purchases (in an open market transaction or otherwise),
shares of Common Stock to deliver in satisfaction of a sale by such Holder of
the Conversion Shares which such Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a “Buy-In”), then the
Corporation shall (A) pay in cash to such Holder (in addition to any other
remedies available to or elected by such Holder) the amount by which (x) such
Holder’s total purchase price (including any brokerage commissions) for the
shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate
number of shares of Common Stock that such Holder was entitled to receive from
the conversion at issue multiplied by (2) the actual sale price at which the
sell order giving rise to such purchase obligation was executed (including any
brokerage commissions) and (B) at the option of such Holder, either reissue (if
surrendered) the shares of Series B Preferred Stock equal to the number of
shares of Series B Preferred Stock submitted for conversion or deliver to such
Holder the number of shares of Common Stock that would have been issued if the
Corporation had timely complied with its delivery requirements under Section
6(c)(i). For example, if a Holder purchases shares of Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
conversion of shares of Series B Preferred Stock with respect to which the
actual sale price (including any brokerage commissions) giving rise to such
purchase obligation was a total of $10,000 under clause (A) of the immediately
preceding sentence, the Corporation shall be required to pay such Holder $1,000.
The Holder shall provide the Corporation written notice, within three (3)
Trading Days after the occurrence of a Buy-In, indicating the amounts payable to
such Holder in respect of such Buy-In together with applicable confirmations and
other evidence reasonably requested by the Corporation. Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Corporation’s failure
to timely effect a DWAC Delivery representing shares of Common Stock upon
conversion of the shares of Series B Preferred Stock as required pursuant to the
terms hereof; provided, however, that the Holder shall not be entitled to both
(i) require the reissuance of the shares of Series B Preferred Stock submitted
for conversion for which such conversion was not timely honored and (ii) receive
the number of shares of Common Stock that would have been issued if the
Corporation had timely complied with its delivery requirements under Section
6(c)(i).

 

A-12

 

 

(d) Reservation of Shares Issuable Upon Conversion. The Corporation covenants
that it will, at all times reserve and keep available out of its authorized and
unissued shares of Common Stock for the sole purpose of issuance upon conversion
of the Series B Preferred Stock, free from preemptive rights or any other actual
contingent purchase rights of Persons other than the Holders of the Series B
Preferred Stock, not less than such aggregate number of shares of the Common
Stock as shall be issuable (taking into account the adjustments of Section 7)
upon the conversion of all outstanding shares of Series B Preferred Stock. The
Corporation covenants that all shares of Common Stock that shall be so issuable
shall, upon issue, be duly authorized, validly issued, fully paid,
non-assessable and free and clear of all liens and other encumbrances.

 

(e) Fractional Shares. No fractional shares or scrip representing fractional
shares of Common Stock shall be issued upon the conversion of the Series B
Preferred Stock. As to any fraction of a share of Common Stock which a Holder
would otherwise be entitled to receive upon such conversion, the Corporation
shall pay a cash adjustment in respect of such final fraction in an amount equal
to such fraction multiplied by the Series B Conversion Price.

 

(f) Transfer Taxes. The issuance of book entry notations for shares of the
Common Stock upon conversion of the Series B Preferred Stock shall be made
without charge to any Holder for any documentary stamp or similar taxes that may
be payable in respect of the issue of such book entry notation, provided that
the Corporation shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance of such book entry notation
upon conversion in a name other than that of the registered Holder(s) of such
shares of Series B Preferred Stock, and the Corporation shall not be required to
issue such book entry notation unless or until the Person or Persons requesting
the issuance thereof shall have paid to the Corporation the amount of such tax
or shall have established to the satisfaction of the Corporation that such tax
has been paid.

 

(g) Status as Stockholder. Upon each Conversion Date and Mandatory Conversion
Date: (i) the shares of Series B Preferred Stock being converted shall be deemed
converted into shares of Common Stock; and (ii) the Holder’s rights as a holder
of such converted shares of Series B Preferred Stock shall cease and terminate,
excepting only the right to receive book entry notations for such shares of
Common Stock and to any remedies provided herein or otherwise available at law
or in equity to such Holder because of a failure by the Corporation to comply
with the terms of this Certificate of Designation. In all cases, the Holder
shall retain all of its rights and remedies for the Corporation’s failure to
convert Series B Preferred Stock.

 

A-13

 

 

Section 7. Certain Adjustments.

 

(a) Stock Dividends and Stock Splits. If the Corporation, at any time while any
shares of Series B Preferred Stock are outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares of Common
Stock with respect to the then outstanding shares of Common Stock; (ii)
subdivides outstanding shares of Common Stock into a larger number of shares; or
(iii) combines (including by way of a reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, then the Series B Conversion Price
shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock (excluding any treasury shares of the Corporation)
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event
(excluding any treasury shares of the Corporation). Any adjustment made pursuant
to this Section 7(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision or combination.

 

(b) Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time or from time to time after the Issuance Date shall make
or issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation (other than a distribution of shares of Common Stock in respect
of outstanding shares of Common Stock) or in other property, then and in each
such event the Holders of Series B Preferred Stock shall receive, simultaneously
with the distribution to the holders of Common Stock, a dividend or other
distribution of such securities or other property in an amount equal to the
amount of such securities or other property as they would have received if all
outstanding shares of Series B Preferred Stock had been converted into Common
Stock on the date of such event.

 

(c) Adjustment for Merger or Reorganization, etc. Subject to the provisions of
Section 5, if there shall occur any reorganization, recapitalization,
reclassification, consolidation or merger involving the Corporation in which the
Common Stock (but not the Series B Preferred Stock) is converted into or
exchanged for securities, cash or other property (other than a transaction
covered by Section 7(a) or Section 7(b)), then, following any such
reorganization, recapitalization, reclassification, consolidation or merger,
each share of Series B Preferred Stock shall thereafter be convertible in lieu
of the Common Stock into which it was convertible prior to such event into the
kind and amount of securities, cash or other property which a holder of the
number of shares of Common Stock of the Corporation issuable upon conversion of
one share of Series B Preferred Stock immediately prior to such reorganization,
recapitalization, reclassification, consolidation or merger would have been
entitled to receive pursuant to such transaction; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors of the
Corporation) shall be made in the application of the provisions in this
Certificate of Designation with respect to the rights and interests thereafter
of the Holders of the Series B Preferred Stock, to the end that the provisions
set forth in this Certificate of Designation (including provisions with respect
to changes in and other adjustments of the Series B Conversion Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
securities or other property thereafter deliverable upon the conversion of the
Series B Preferred Stock.

 

A-14

 

 

(d) Calculations. All calculations under this Certificate of Designation shall
be made to the nearest cent or the nearest 1/100th of a share, as the case may
be. For purposes of this Section 7, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the number
of shares of Common Stock (excluding any treasury shares of the Corporation)
issued and outstanding.

 

(e) Notice to the Holders.

 

(i) Adjustment to Series B Conversion Price. Whenever the Series B Conversion
Price is adjusted pursuant to any provision of this Section 7, the Corporation
shall promptly deliver to each Holder a notice setting forth the Series B
Conversion Ratio after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.

 

(ii) Other Notices. If (A) the Corporation shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the Corporation
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock, (C) the Corporation shall authorize the granting to all holders of
the Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any
stockholders of the Corporation shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Corporation is a party, any Liquidation, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property,
or (E) consent of the Holders of Series B Preferred Stock is required pursuant
to Section 4(c) or Section 4(d), then, in each case, the Corporation shall cause
to be filed at each office or agency maintained for the purpose of conversion of
the shares of Series B Preferred Stock, and shall cause to be delivered to each
Holder at its last address as it shall appear upon the stock books of the
Corporation, at least ten (10) calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer, Liquidation or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice.

 

A-15

 

 

Section 8. Miscellaneous.

 

(a) Lost or Mutilated Stock Certificates. If a Holder’s certificate representing
shares of Series B Preferred Stock shall be mutilated, lost, stolen or
destroyed, the Corporation shall execute and deliver, if requested by the
Holder, in exchange and substitution for and upon cancellation of a mutilated
certificate, or in lieu of or in substitution for a lost, stolen or destroyed
certificate, a new certificate for the shares of Series B Preferred Stock so
mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the ownership thereof,
reasonably satisfactory to the Corporation and, in each case, customary and
reasonable indemnity, if requested, without the requirement to post a bond.
Applicants for a new certificate under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Corporation may prescribe, without the requirement to
post a bond.

 

(b) Waiver. Any waiver by the Corporation or a Holder of a breach of any
provision of this Certificate of Designation shall not operate as or be
construed to be a waiver of any other breach of such provision or of any breach
of any other provision of this Certificate of Designation or a waiver by any
other Holders. The failure of the Corporation or a Holder to insist upon strict
adherence to any term of this Certificate of Designation on one or more
occasions shall not be considered a waiver or deprive that party (or any other
Holder) of the right thereafter to insist upon strict adherence to that term or
any other term of this Certificate of Designation. Any waiver by the Corporation
or a Holder must be in writing. Notwithstanding any provision in this
Certificate of Designation to the contrary, any provision contained herein and
any right of the Holders of Series B Preferred Stock granted hereunder may be
waived as to all shares of Series B Preferred Stock (and the Holders thereof)
upon the written consent of the Holders of at least seventy-five percent (75%)
of the shares of Series B Preferred Stock (voting as a single class) then
outstanding, unless a higher percentage is required by the DGCL, in which case
the written consent of the Holders of not less than such higher percentage shall
be required.

 

(c) Severability. If any provision of this Certificate of Designation is
invalid, illegal or unenforceable, the balance of this Certificate of
Designation shall remain in effect, and if any provision is inapplicable to any
Person or circumstance, it shall nevertheless remain applicable to all other
Persons and circumstances. If it shall be found that any interest or other
amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum rate of interest permitted under applicable law.

 

(d) Next Business Day. Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

 

(e) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designation and shall not be deemed to
limit or affect any of the provisions hereof.

 

(f) Status of Converted Series B Preferred Stock. If any shares of Series B
Preferred Stock shall be converted or redeemed by the Corporation, such shares
shall resume the status of authorized but unissued shares of preferred stock and
shall no longer be designated as Series B Preferred Stock.

 

********************

 

A-16

 

 

IN WITNESS WHEREOF, Interpace Biosciences, Inc., has caused this Certificate of
Designation of Preferences, Rights and Limitations of Series B Convertible
Preferred Stock to be executed by its duly authorized officer this __ day of
January, 2020.

 

  INTERPACE BIOSCIENCES, INC.         By:                           Name: Jack
E. Stover   Title: President & Chief Executive Officer

 

[Signature Page to Certificate of Designation]

 

 

 

 

ANNEX A

 

NOTICE OF CONVERSION

 

(TO BE EXECUTED BY THE REGISTERED HOLDER

IN ORDER TO CONVERT SHARES OF SERIES B PREFERRED STOCK)

 

The undersigned Holder hereby irrevocably elects to convert the number of shares
of Series B Preferred Stock indicated below, represented by stock certificate
No(s). _____ (the “Preferred Stock Certificates”), into shares of common stock,
par value $0.01 per share (the “Common Stock”), of Interpace Biosciences, Inc.,
a Delaware corporation (the “Corporation”), as of the date written below. If
securities are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Capitalized terms utilized but not defined herein shall have the meaning
ascribed to such terms in that certain Certificate of Designation of
Preferences, Rights and Limitations of Series B Convertible Preferred Stock (the
“Certificate of Designation”) filed by the Corporation with the Delaware
Secretary of State on January [•], 2020.

 

Conversion calculations:

 

Date to Effect Conversion:           Number of shares of Series B Preferred
Stock owned prior to Conversion:           Number of shares of Series B
Preferred Stock to be Converted:           Number of shares of Common Stock to
be Issued:           Address for delivery of physical certificates:           Or
          for DWAC Delivery:           DWAC Instructions:           Broker no:  
        Account no:    

 

  HOLDER         By:                       Name:     Title:     Date:

 

 

 

 

Exhibit B

 

Form of Investor Rights Agreement

 

B-1

 

 

AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this “Agreement”) is
entered into as of January [●], 2020, by and among Interpace Biosciences, Inc.,
a Delaware corporation (the “Company”), 1315 Capital II, L.P., a Delaware
limited partnership (including its successors and assigns, “1315 Capital”) and
Ampersand 2018 Limited Partnership, a Delaware limited partnership (including
its successors and assigns, “Ampersand” and, together with 1315 Capital, the
“Investors” and each an “Investor”).

 

WHEREAS, the Company and the Investors are parties to a Securities Purchase and
Exchange Agreement, dated as of January 10, 2020 (the “Securities Purchase
Agreement”), pursuant to which on the date hereof (a) the Company issued, sold
and delivered to the Investors, and the Investors purchased and acquired from
the Company, pursuant to the terms and subject to the conditions set forth
therein, an aggregate of 20,000 shares of the Company’s Series B Convertible
Preferred Stock, par value $0.01 per share (the “Series B Shares”) and (b) the
Company issued and delivered 27,000 Series B Shares to Ampersand in exchange for
Ampersand’s 270 shares of the Company’s Series A Convertible Preferred Stock,
par value $0.01 per share (the “Series A Shares”), representing all issued and
outstanding Series A Shares, pursuant to the terms and subject to the conditions
set forth therein;

 

WHEREAS, Series B Shares have the designation, powers, preferences and rights,
and the qualifications, limitations and restrictions, as specified in the Form
of Certificate of Designation of Preferences, Rights and Limitations of Series B
Convertible Preferred Stock (the “Certificate of Designation”), attached as an
exhibit to the Securities Purchase Agreement.

 

WHEREAS, the Series B Shares are convertible into shares of the Company’s common
stock, par value $0.01 per share (“Common Shares”) pursuant to the Certificate
of Designation; and

 

WHEREAS, the Company and the Investors desire to amend and restate that certain
Investor Rights Agreement, dated as of July 15, 2019, among the Company and
Ampersand in order to establish certain terms and conditions concerning the
rights of and restrictions on the Investors with respect to the ownership of the
Series B Shares and other capital stock of the Company, and it is a condition of
the closing of the transactions contemplated by the Securities Purchase
Agreement that the Company and the Investors execute and deliver this Agreement.

 

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

 

1. DEFINITIONS. The following capitalized terms used herein have the following
meanings:

 

“1315 Capital Confidentiality Agreement” means that certain Non-Disclosure
Agreement, dated as of November 22, 2019, between the Company and 1315 Capital
LLC.

 

“Addendum Agreement” is defined in Section 9.2.

 

B-2

 

 

“Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person; provided that the following Persons
shall not be deemed to be Affiliates of any of the Investors or any of their
respective Affiliates: (a) the Company and its subsidiaries and (b) any
portfolio company in which any of the Investors or any of their respective
Affiliates has an investment (whether debt or equity) or any of such portfolio
companies’ controlled Affiliates, so long as, in the case of this clause (b),
such Person shall not have been acting on behalf of or at the direction of any
of the Investors or any of their respective Affiliates or received any
Confidential Information from or on behalf of any of the Investors; provided,
however, clause (b) shall not apply to the use of the word “Affiliate” in the
definition of Investor Parties. For the purposes of this definition, “control”,
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

“Ampersand Confidentiality Agreement” means that certain Letter Agreement, dated
as of February 15, 2019, between the Company and Ampersand Management, LLC.

 

“as converted basis” means with respect to the outstanding Common Shares as of
any date, all outstanding Common Shares calculated on a basis in which all
Common Shares issuable upon conversion of the outstanding Series B Shares (at
the “Series B Conversion Price” in effect on such date as set forth in the
Certificate of Designation), are assumed to be outstanding as of such date.

 

Any Person shall be deemed to “beneficially own”, to have “beneficial ownership”
of, or to be “beneficially owning” any securities (which securities shall also
be deemed “beneficially owned” by such Person) that such Person is deemed to
“beneficially own” within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act; provided that any Person shall be deemed to beneficially own any
securities that such Person has the right to acquire, whether or not such right
is exercisable immediately, within 60 days or otherwise (including assuming
conversion of all Series B Shares owned by such Person to Common Shares).

 

“Business Day” means any day except Saturday, Sunday, any day which is a federal
legal holiday in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other governmental
action to close.

 

“Capital Stock” means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of capital stock, partnership interests (whether general
or limited) or equivalent ownership interests in or issued by such Person, and
with respect to the Company includes, without limitation, any and all Common
Shares and Series B Shares.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the United States Internal Revenue Code of 1986, as amended.

 

“Commission” means the Securities and Exchange Commission, or any other Federal
agency then administering the Securities Act or the Exchange Act.

 

“Common Shares” is defined in the recitals to this Agreement.

 

“Company” is defined in the preamble to this Agreement.

 

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

 

“Demand Registration” is defined in Section 2.1.1.

 

“Demand Takedown” is defined in Section 2.3.4.(a).

 

B-3

 

 

“Demanding Holder” is defined in Section 2.1.1.

 

“Effectiveness Period” is defined in Section 3.1.3.

 

“Equity Securities” means, with respect to any Person, (x) any shares of Capital
Stock of such Person, (y) any rights, options, warrants or similar securities to
subscribe for, purchase or otherwise acquire any shares of Capital Stock of such
Person, and (z) Capital Stock or other equity securities directly or indirectly
convertible into or exercisable or exchangeable for any shares of Capital Stock
of such Person, excluding, for all purposes, any debt, including, without
limitation, any debt convertible into any of the foregoing described in clauses
(x) through (z).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder, all as the same
shall be in effect at the time.

 

“Exempted Securities” means (a) Common Shares, options or convertible securities
issued as a dividend or distribution on Series B Shares; (b) Common Shares,
options or convertible securities issued by reason of a dividend, stock split,
split-up or other distribution on Common Shares; (c) Common Shares or options
issued to employees or directors of, or consultants or advisors to, the Company
or any of its subsidiaries pursuant to a plan, agreement or arrangement approved
by the Company Board, including the approval of at least one Investor Director;
(d) Common Shares or convertible securities actually issued upon the exercise of
options or Common Shares actually issued upon the conversion or exchange of
convertible securities, in each case, provided such issuance is pursuant to the
terms of an option or convertible security that is issued and outstanding prior
to the Closing Date.

 

“GAAP” means United States generally accepted accounting principles, as in
effect from time to time, consistently applied.

 

“Governmental Authority” any United States or non-United States (i) federal,
national, regional, state, provincial, local, municipal or other government,
(ii) governmental or quasi-governmental entity of any nature (including any
governmental agency, branch, department, official, or entity, any
self-regulatory authority, public utility and any supra-national organization,
state, county, city or other political subdivision and any court or other
tribunal) or (iii) body exercising or entitled to exercise any administrative,
executive, judicial, legislative, police, regulatory or taxing authority or
power of any nature, including any public arbitral tribunal, arbitrator or
mediator.

 

“Indemnified Party” is defined in Section 4.3.

 

“Indemnifying Party” is defined in Section 4.3.

 

“Independent Director” is defined in Section 6.1.1.

 

“Investor” and “Investors” are defined in the preamble to this Agreement.

 

“Investor Directors” is defined in Section 6.1.1.

 

“Investor Indemnified Party” is defined in Section 4.1.

 

“Investor Parties” means, as applicable, each of the Investors and any of their
respective Affiliates, including Affiliates to whom Series B Shares or Common
Shares are transferred pursuant to and in accordance with this Agreement.

 

B-4

 

 

“Law” means all applicable constitutions, treaties, statutes, laws (including
common law), orders, ordinances, regulations, codes, rules, legally binding
regulatory policy statements, binding standards or guidance, or general binding
directives or decrees enacted, adopted or applied by any and all Governmental
Authorities.

 

“Lock-Up Parties” is defined in Section 2.4.4.

 

“Lock-Up Period” means the period commencing on the Closing Date and ending one
hundred and eighty (180) days following the Closing Date.

 

“Marketed Takedown” shall mean a Underwritten Takedown that is a fully marketed
underwritten offering that requires Company management to participate in “road
show” presentations to potential investors requiring substantial marketing
effort from management over multiple days.

 

“Maximum Number of Shares” is defined in Section 2.1.4.

 

“Notices” is defined in Section 9.3.

 

“Observer” is defined in Section 6.2.

 

“Participation Portion” means a fraction the numerator of which is the aggregate
number of Common Shares issuable upon the conversion of the Series B Shares held
by an Investor as of the date of the Pre-Emptive Right Notice, and the
denominator of which is the aggregate number of Common Shares issued and
outstanding as of the date of the Pre-Emptive Right Notice, assuming for such
purposes that all Series B Shares have been converted into Common Shares in
accordance with their terms as of such date.

 

“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.

 

“Piggy-Back Registration” is defined in Section 2.2.1.

 

“Pre-Emptive Right Notice” is defined in Section 7.1.1.

 

“Registrable Securities” means (i) any Series B Shares, (ii) any Common Shares
issued upon the conversion of the Series B Shares and (iii) any other Common
Shares hereafter acquired by the Investors (and any other securities issued or
issuable to the Investors with respect to the securities referred to in clauses
(i), (ii) and (iii) by way of any share split, share dividend or other
distribution, recapitalization, share exchange, share reconstruction,
amalgamation, contractual control arrangement or similar event). As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred or disposed of pursuant to such
Registration Statement; (b) upon an Investor’s request in writing, (i) such
securities shall have been otherwise transferred pursuant to such written
request, (ii) new certificates for them or registered in such alternative form,
in each case not bearing a legend restricting further transfer, shall have been
delivered by the Company in accordance with such written request and (iii)
subsequent public distribution of them shall not require registration under the
Securities Act and is permitted under Rule 144A without any volume,
manner-of-sale or other conditions; or (c) such securities shall have ceased to
be outstanding. The parties hereto acknowledge that the inclusion of “any Series
B Shares” in the definition of “Registrable Securities” is intended solely to
facilitate any registration of Common Shares and that, in the event the
Investors have no rights under this Agreement to effect any public offering of
Series B Shares.

 

B-5

 

 

“Registration” means a registration effected by preparing and filing a
registration statement or similar document in compliance with the requirements
of the Securities Act, and the applicable rules and regulations promulgated
thereunder, and such registration statement becoming effective.

 

“Registration Statement” means a registration statement filed by the Company
with the Commission in compliance with the Securities Act and the rules and
regulations promulgated thereunder for a public offering and sale of equity
securities, or securities or other obligations exercisable or exchangeable for,
or convertible into, equity securities (other than a registration statement on
Form S-4 or Form S-8 or their successors, or any registration statement covering
only securities proposed to be issued in exchange for securities or assets of
another entity).

 

“Requesting Holder” is defined in Section 2.3.4(a).

 

“Resale Shelf Registration Statement” is defined in Section 2.3.1.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall be
in effect at the time.

 

“Securities Purchase Agreement” is defined in the recitals to this Agreement.

 

“Selling Holders” is defined in Section 2.3.4(a)(ii).

 

“Short Sales” include, without limitation, (i) all “short sales” as defined in
Rule 200 promulgated under Regulation SHO, whether or not against the box, and
all types of direct and indirect stock pledges, forward sale contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and (ii) sales and other transactions through non-U.S. broker
dealers or foreign regulated brokers (but shall not be deemed to include the
location and/or reservation of borrowable shares of Common Shares).

 

“Standstill Period” means the period commencing on the Closing Date and ending
on the first (1st) anniversary of the Closing Date.

 

“Underwriter” means a securities dealer who purchases any Registrable Securities
as principal in an underwritten offering and not as part of such dealer’s
market-making activities.

 

“Underwritten Takedown” shall mean an underwritten public offering of
Registrable Securities pursuant to the Resale Shelf Registration Statement, as
amended or supplemented.

 

2. REGISTRATION RIGHTS.

 

2.1 Demand Registration.

 

2.1.1 Request for Registration. Subject to Section 2.4, at any time and from
time to time beginning one year following the Closing Date, any Investor or a
group of Investors may make a written demand to require the Company to effect
the Registration under the Securities Act of all or any portion of their
Registrable Securities, as applicable, on Form S-1 or any similar long-form
Registration or, if then available, on Form S-3; provided that the Registrable
Securities included in such demand have an estimated aggregate market value of
not less than $5,000,000. Each registration requested pursuant to this Section
2.1.1 is referred to herein as a “Demand Registration”. Any demand for a Demand
Registration shall specify the number of shares of Registrable Securities
proposed to be sold and the intended method(s) of distribution thereof. The
Company will notify all Investors that are holders of Registrable Securities of
the demand, and each such holder of Registrable Securities who wishes to include
all or a portion of such holder’s Registrable Securities in the Demand
Registration (each such holder including shares of Registrable Securities in
such registration, a “Demanding Holder”) shall so notify the Company within
fifteen (15) days after the receipt by the holder of the notice from the
Company. Upon any such request, the Demanding Holders shall be entitled to have
their Registrable Securities included in the Demand Registration, subject to
Sections 2.1.4 and 3.4 and the provisos set forth in Section 3.1.1.

 

B-6

 

 

2.1.2 Effective Registration. A Registration will not count as a Demand
Registration until the Registration Statement filed with the Commission with
respect to such Demand Registration has been declared effective and the Company
has complied with all of its obligations under this Agreement with respect
thereto (including the Company’s maintaining effectiveness for the duration of
the Effectiveness Period (as defined below)); provided, however, that if, after
such Registration Statement has been declared effective, the offering of
Registrable Securities pursuant to a Demand Registration is interfered with by
any stop order or injunction of the Commission or any other Governmental
Authority or court, the Registration Statement with respect to such Demand
Registration will be deemed not to have been declared effective, unless and
until, (i) such stop order or injunction is removed, rescinded or otherwise
terminated, and (ii) the Demanding Holders holding seventy-five percent (75%) of
the Registrable Securities covered by such Registration Statement thereafter
elect to continue the offering; provided, further, that the Company shall not be
obligated to file a second Registration Statement until a Registration Statement
that has been filed is counted as a Demand Registration or is terminated.

 

2.1.3 Underwritten Offering. If the Demanding Holders so elect and such holders
so advise the Company as part of their written demand for a Demand Registration,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. In such event, the right of
any holder to include its Registrable Securities in such Registration shall be
conditioned upon such holder’s participation in such underwriting and the
inclusion of such holder’s Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders proposing to distribute their
Registrable Securities through such underwriting and the Company shall enter
into an underwriting agreement in customary form with the Underwriter or
Underwriters selected for such underwriting by the holders initiating the Demand
Registration.

 

2.1.4 Reduction of Offering. If the managing Underwriter or Underwriters for a
Demand Registration that is to be an underwritten offering advises the Company
and the Demanding Holders in writing that the dollar amount or number of shares
of Registrable Securities which the Demanding Holders desire to sell, taken
together with all other Common Shares which the Company desires to sell and the
Common Shares, if any, as to which registration has been requested pursuant to
valid written contractual piggy-back registration rights held by other
stockholders of the Company who desire to sell, exceeds the maximum dollar
amount or maximum number of shares that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of shares, as applicable, the “Maximum Number of
Shares”), then the Company shall include in such registration: (i) first, the
Registrable Securities as to which Demand Registration has been requested by the
Demanding Holders (pro rata in accordance with the number of shares held by each
such Person) that can be sold without exceeding the Maximum Number of Shares;
(ii) second, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clause (i), the Common Shares that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares;
(iii) third, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (i) and (ii), the Common Shares for the
account of other persons that the Company is obligated to register pursuant to
valid written contractual arrangements with such persons, as to which
“piggy-back” registration has been requested by the holders thereof (pro rata in
accordance with the number of shares held by each such person) that can be sold
without exceeding the Maximum Number of Shares.

 

B-7

 

 

2.1.5 Withdrawal. The Demanding Holders holding seventy-five percent (75%) of
the Registrable Securities covered by such Registration Statement shall have the
right to require the Company to abandon or withdraw such Registration Statement
by giving written notice to the Company and the managing Underwriter or
Underwriters of such request prior to the effectiveness of the Registration
Statement filed with the Commission with respect to such Demand Registration. In
such case, the abandoned or withdrawn registration shall not count for purposes
of the number of Demand Registrations permitted pursuant to Section 2.4.1 if (i)
more than 20% of the Registrable Securities requested by such Demanding Holders
to be included in such registration are not or would not have been so included
or (ii) a material adverse change in the Company’s business, operations,
financial condition, operating results or prospects or the price to the public
at which the Registrable Securities are proposed to be sold in such registration
has occurred; provided that if such Demanding Holders require the Company to
abandon or withdraw such Registration Statement for any other reason, the
abandoned or withdrawn registration shall also not count for purposes of the
number of Demand Registrations permitted pursuant to Section 2.4.1 if such
Demanding Holders reimburse the Company for the Demanding Holders’ costs
associated with the abandoned or withdrawn registration.

 

2.2 Piggy-Back Registration.

 

2.2.1 Piggy-Back Rights. If at any time from time to time, the Company proposes
to file a Registration Statement under the Securities Act with respect to an
offering of equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities, by the Company for its
own account or for stockholders of the Company for their account (or by the
Company and by stockholders of the Company including, without limitation,
pursuant to Section 2.3), other than a Registration Statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for an
exchange offer or offering of securities solely to the Company’s existing
stockholders, (iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment plan, then the
Company shall (x) give written notice of such proposed filing to the holders of
Registrable Securities as soon as practicable but in no event less than ten (10)
days before the anticipated filing date, which notice shall describe the amount
and type of securities to be included in such offering, the intended method(s)
of distribution, and the name of the proposed managing Underwriter or
Underwriters, if any, of the offering, and (y) offer to the holders of
Registrable Securities in such notice the opportunity to register the sale of
such number of shares of Registrable Securities as such holders may request in
writing within five (5) days following receipt of such notice (a “Piggy-Back
Registration”). Subject to receipt of the information from the holders of
Registrable Securities set forth in Section 3.4, the Company shall cause such
Registrable Securities to be included in such registration and shall use its
best efforts to cause the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be
included in a Piggy-Back Registration on the same terms and conditions as any
similar securities of the Company and to permit the sale or other disposition of
such Registrable Securities in accordance with the intended method(s) of
distribution thereof. The Company and all holders of Registrable Securities
proposing to distribute their securities through a Piggy-Back Registration that
involves an Underwriter or Underwriters shall enter into an underwriting
agreement in customary form with the Underwriter or Underwriters selected for
such Piggy-Back Registration.

 

B-8

 

 

2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters for a
Piggy-Back Registration that is to be an underwritten offering advises the
Company and the holders of Registrable Securities in writing that the dollar
amount or number of Common Shares which the Company desires to sell, taken
together with Common Shares, if any, as to which registration has been demanded
pursuant to valid written contractual arrangements with persons other than the
holders of Registrable Securities hereunder and the Registrable Securities as to
which registration has been requested under this Section 2.2, exceeds the
Maximum Number of Shares, then the Company shall include in any such
registration:

 

(a) If the registration is undertaken for the Company’s account: (A) first, the
Common Shares or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; and (B) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the Common Shares or other securities, if any, comprised
of Registrable Securities, as to which registration has been requested pursuant
to the terms hereof, that can be sold without exceeding the Maximum Number of
Shares, pro rata based on the total number of Registrable Securities held by the
Investors; and (C) third, to the extent that the Maximum Number of shares has
not been reached under the foregoing clauses (A) and (B), the Common Shares or
other securities for the account of other persons that the Company is obligated
to register pursuant to valid written contractual piggy-back registration rights
with such persons and that can be sold without exceeding the Maximum Number of
Shares; and

 

(b) If the registration is a “demand” registration undertaken at the demand of
persons other than the holders of Registrable Securities, (A) first, the Common
Shares or other securities for the account of the demanding persons and the
holders of Registrable Securities exercising their piggy-back registration
rights pursuant to the terms hereof, pro rata based on the total number of fully
diluted Common Shares held by such selling holders, that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clause (A),
the Common Shares or other securities that the Company desires to sell that can
be sold without exceeding the Maximum Number of Shares; and (C) third, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), the Common Shares or other securities for the
account of other persons that the Company is obligated to register pursuant to
valid written contractual arrangements with such persons, that can be sold
without exceeding the Maximum Number of Shares.

 

2.2.3 Withdrawal. Any holder of Registrable Securities may elect to withdraw
such holder’s request for inclusion of Registrable Securities in any Piggy-Back
Registration by giving written notice to the Company of such request to withdraw
prior to the effectiveness of the Registration Statement. With respect to
registrations not initiated by holders of Registrable Securities and to which
such holders are participating solely through their piggy-back registration
rights, the Company (whether on its own determination or as the result of a
withdrawal by persons making a demand pursuant to valid written contractual
obligations) may withdraw a Registration Statement at any time prior to the
effectiveness of such Registration Statement. Notwithstanding any such
withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in Section 3.3.

 

2.3 Resale Shelf Registration Rights.

 

2.3.1 Registration Statement Covering Resale of Registrable Securities. On or
prior to the first anniversary of the Closing Date, upon the written demand of
an Investor or group of Investors and subject to receipt of the information from
the holders of Registrable Securities set forth in Section 3.4, the Company
shall promptly effect an effective Registration Statement permitting offerings
to be made on a continuous basis pursuant to Rule 415 under the Securities Act
registering the resale from time to time by Investors of all of the Registrable
Securities held by or then-issuable to the Investors (the “Resale Shelf
Registration Statement”). The Company will notify all Investors that are holders
of Registrable Securities of the demand and that they will include in the Resale
Shelf Registration Statement such Investor’s Registrable Securities. The Resale
Shelf Registration Statement shall be on Form S-3 or another appropriate form
permitting Registration of such Registrable Securities for resale by such
Investors. If, on the date that the Resale Shelf Registration Statement is
filed, the Company is a well-known seasoned issuer (as defined in Rule 405 under
the Securities Act) (a “WKSI”), then the Company shall file the Resale Shelf
Registration Statement as an automatic shelf registration statement (as defined
in Rule 405 under the Securities Act), which shall be effective upon the filing
thereof. If the Company is not a WKSI on the date of the written demand, the
Company shall make the initial filing of the Resale Shelf Registration Statement
within forty-five (45) days of receipt of the written demand. Once the Resale
Shelf Registration Statement is effective, the Company shall use commercially
reasonable efforts to keep the Resale Shelf Registration Statement continuously
effective under the Securities Act at all times until the expiration of the
Effectiveness Period. If any Registrable Securities are outstanding at the
expiration of the Effectiveness Period, the Company is obligated to file and
make effective a subsequent Resale Shelf Registration Statement on or prior to
the expiration of the Effectiveness Period in accordance with this Section 2.3.1
registering the resale from time to time by Investors of all of the Registrable
Securities held by or then issuable to the Investors.

 

B-9

 

 

2.3.2 Notification and Distribution of Materials. The Company shall notify the
Investors in writing of the effectiveness of the Resale Shelf Registration
Statement and shall furnish to them, without charge, such number of copies of
the Resale Shelf Registration Statement (including any amendments, supplements
and exhibits), the prospectus contained therein (including each preliminary
prospectus and all related amendments and supplements) and any documents
incorporated by reference in the Resale Shelf Registration Statement or such
other documents as the Investors may reasonably request in order to facilitate
the sale of the Registrable Securities in the manner described in the Resale
Shelf Registration Statement.

 

2.3.3 Amendments and Supplements. Subject to the provisions of Section 2.3.1
above, the Company shall promptly prepare and file with the Commission from time
to time such amendments and supplements to the Resale Shelf Registration
Statement and prospectus used in connection therewith as may be necessary to
keep the Resale Shelf Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all the
Registrable Securities during the Effectiveness Period.

 

2.3.4 Notice of Certain Events. The Company shall promptly notify the Investors
in writing of any request by the Commission for any amendment or supplement to,
or additional information in connection with, the Resale Shelf Registration
Statement required to be prepared and filed hereunder (or prospectus relating
thereto). The Company shall promptly notify each Investor in writing of the
filing of the Resale Shelf Registration Statement or any prospectus, amendment
or supplement related thereto or any post-effective amendment to the Resale
Shelf Registration Statement and the effectiveness of any post-effective
amendment.

 

(a) If the Company shall receive a request from one or more holders of
Registrable Securities (the requesting holder(s) shall be referred to herein as
the “Requesting Holder”), provided that the estimated aggregate market value of
the Registrable Securities is at least $5,000,000 for a Marketed Takedown, that
the Company effect an Underwritten Takedown of all or any portion of the
Requesting Holder’s Registrable Securities, and specifying the intended method
of disposition thereof (including whether such Underwritten Takedown is intended
to be a Marketed Takedown), then the Company shall promptly give notice of such
requested Underwritten Takedown (each such request shall be referred to herein
as a “Demand Takedown”) at least five (5) Business Days prior to the anticipated
filing date of the prospectus or supplement relating to such Demand Takedown to
the other Investors and thereupon shall use its commercially reasonable efforts
to effect, as expeditiously as possible, the offering in such Underwritten
Takedown of:

 

(i) subject to the restrictions set forth in Section 2.1.4, all Registrable
Securities for which the Requesting Holder has requested such offering under
Section 2.3.4(a), and

 

(ii) subject to the restrictions set forth in Section 2.1.4, all other
Registrable Securities that any holders of Registrable Securities (all such
holders, together with the Requesting Holder, the “Selling Holders”) have
requested the Company to offer by request received by the Company within two (2)
Business Days after such holders receive the Company’s notice of the Demand
Takedown, all to the extent necessary to permit the disposition (in accordance
with the intended methods thereof as aforesaid) of the Registrable Securities so
to be offered.

 

B-10

 

 

(b) Promptly after the expiration of the two (2) Business Day period referred to
in Section 2.3.4(a)(ii), the Company will notify all Selling Holders of the
identities of the other Selling Holders and the number of shares of Registrable
Securities requested to be included therein.

 

(c) If the managing underwriter in an Underwritten Takedown advises the Company
and the Requesting Holder that, in its view, the number of shares of Registrable
Securities requested to be included in such underwritten offering exceeds the
largest number of shares that can be sold without having an adverse effect on
such offering, including the price at which such shares can be sold, the shares
included in such Underwritten Takedown will be reduced by the Registrable
Securities held by the Selling Holders (on a pro rata basis based on the total
number of Registrable Securities held by such Selling Holders, subject to a
determination by the Commission that certain Selling Holders must be reduced
first based on the number of Registrable Securities held by such Selling
Holders).

 

2.3.5 Selection of Underwriters. Selling Holders holding seventy-five percent
(75%) of the Registrable Securities requested to be sold in an Underwritten
Takedown shall have the right to select an Underwriter or Underwriters in
connection with such Underwritten Takedown, which Underwriter or Underwriters
shall be reasonably acceptable to the Company (which consent shall not be
unreasonably withheld, conditioned or delayed). In connection with an
Underwritten Takedown, the Company shall enter into customary agreements
(including an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of the Registrable Securities in such Underwritten Takedown,
including, if necessary, the engagement of a “qualified independent underwriter”
in connection with the qualification of the underwriting arrangements with the
Financial Industry Regulatory Authority, Inc.

 

2.4 Registration Rights Limitations.

 

2.4.1 The Company shall not be obligated to effectuate more than an aggregate of
two (2) Demand Registrations.

 

2.4.2 The Company shall not be obligated to effectuate more than (i) two (2)
Marketed Takedowns in any 365-day period or (ii) an aggregate of two (2)
Marketed Takedowns.

 

2.4.3 For so long as a Resale Shelf Registration Statement is effective with
respect to all Registrable Securities of an Investor and such Investor is able
to sell its Registrable Securities in a takedown offering pursuant to such
Resale Shelf Registration Statement, such Investor’s right to make a Demand
Registration of such Registrable Securities pursuant to Section 2.1 is
suspended.

 

2.4.4 If any sale of Registrable Securities shall be effected by means of an
underwritten offering, (a) each of the Investors, the members of the Company
Board and the executive officers of the Company (collectively, the “Lock-Up
Parties”) shall enter into a customary “lock-up” agreement (which lock-up
agreements shall contain identical terms) in favor of the underwriters and (b)
neither the Company nor any Lock-Up Party shall effect any public sale or
distribution of any of the Company’s securities (except as part of such
underwritten offering), including any sale pursuant to Rule 144 or by entering
into any swap, hedge or other arrangement that transfers, in whole or in part,
the economic consequence of ownership of such securities, during the ten (10)
Business Days prior to, and continuing for ninety (90) Business Days after, the
date of the pricing of such underwritten offering (unless the underwriters, the
Company and the Investors agree on a different time period). The foregoing
notwithstanding, no Lock-Up Party shall be required to terminate an existing
10b5-1 plan or to cease sales under any such plan. No Lock-Up Party holding any
class of securities subject to this Section 2.4.4 shall be released from any
obligation under any agreement, arrangement or understanding entered into with
respect to this Section 2.4.4 unless the Investors are also released.

 

B-11

 

 

2.4.5 The Company shall not, without the prior written consent of the Investors,
enter into any agreement with any holder or prospective holder of any security
of the Company giving such holder or prospective holder any registration rights
the terms of which are more favorable than the registration rights granted to
the holders of Registrable Securities hereunder, or which would reduce the
amount of Registrable Securities such holders can include in any (i)
registration statement filed pursuant to Sections 2.1 and 2.3.1 hereunder or
(ii) Underwritten Takedown pursuant to Section 2.3.4 hereunder, unless such
rights are subordinate to those of the holders of Registrable Securities.

 

3. REGISTRATION PROCEDURES.

 

3.1 Filings; Information. Whenever the Company is required to effect the
registration of any Registrable Securities pursuant to Section 2, the Company
shall use its commercially reasonable efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method(s) of
distribution thereof as expeditiously as practicable, and in connection with any
such request:

 

3.1.1 Filing Registration Statement. The Company shall use its commercially
reasonable efforts to, as expeditiously as possible after receipt of a request
for a Demand Registration pursuant to Section 2.1, prepare and file with the
Commission a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of all Registrable Securities to be registered
thereunder in accordance with the intended method(s) of distribution thereof,
and shall use its commercially reasonable efforts to cause such Registration
Statement to become effective and use its commercially reasonable efforts to
keep it effective for the Effectiveness Period; provided, however, that the
Company shall have the right to defer any Demand Registration for up to
forty-five (45) days, and any Piggy-Back Registration for such period as may be
applicable to deferment of any Demand Registration to which such Piggy-Back
Registration relates, in each case if the Company shall furnish to the holders a
certificate signed by the chief executive officer and chief financial officer of
the Company stating that, in the good faith judgment of the Company Board, if
the Registration Statement were to be effected at such time, it would (i)
materially interfere with a bona fide material acquisition, corporate
organization or other similar transaction involving the Company or (ii) require
premature disclosure of material information that the Company has a bona fide
business purpose for preserving as confidential, the premature disclosure of
which would materially adversely affect the Company; provided, further, however,
that the Company shall not have the right to exercise the right set forth in the
immediately preceding proviso for more than a total of ninety (90) days in any
365-day period.

 

3.1.2 Copies. The Company shall, prior to filing a Registration Statement or
prospectus, or any amendment or supplement thereto, furnish without charge to
the holders of Registrable Securities included in such registration, and such
holders’ legal counsel, copies of such Registration Statement as proposed to be
filed, each amendment and supplement to such Registration Statement (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents as the holders of Registrable
Securities included in such registration or legal counsel for any such holders
may request in order to facilitate the disposition of the Registrable Securities
owned by such holders.

 

B-12

 

 

3.1.3 Amendments and Supplements. The Company shall prepare and file with the
Commission such amendments, including post-effective amendments, and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective and in
compliance with the provisions of the Securities Act until the date on which all
Registrable Securities and other securities covered by such Registration
Statement have been disposed of in accordance with the intended method(s) of
distribution set forth in such Registration Statement or such securities have
been withdrawn (the “Effectiveness Period”).

 

3.1.4 Notification. After the filing of a Registration Statement, the Company
shall promptly, and in no event more than two (2) Business Days after such
filing, notify the holders of Registrable Securities included in such
Registration Statement of such filing, and shall further notify such holders
within two (2) Business Days of the occurrence of any of the following: (i) when
such Registration Statement becomes effective; (ii) when any post-effective
amendment to such Registration Statement becomes effective; (iii) the issuance
or threatened issuance by the Commission of any stop order (and the Company
shall take all actions required to prevent the entry of such stop order or to
remove it if entered); and (iv) any request by the Commission for any amendment
or supplement to such Registration Statement or any prospectus relating thereto
or for additional information or of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the securities covered by such
Registration Statement, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, and promptly make
available to the holders of Registrable Securities included in such Registration
Statement any such supplement or amendment; except that before filing with the
Commission a Registration Statement or prospectus or any amendment or supplement
thereto, including documents incorporated by reference, the Company shall
furnish to the holders of Registrable Securities included in such Registration
Statement and to the legal counsel for any such holders, copies of all such
documents proposed to be filed sufficiently in advance of filing to provide such
holders and legal counsel with a reasonable opportunity to review such documents
and comment thereon.

 

3.1.5 Securities Laws Compliance. The Company shall use its commercially
reasonable efforts to (i) register or qualify the Registrable Securities covered
by the Registration Statement under such securities or “blue sky” laws of such
jurisdictions in the United States as the holders of Registrable Securities
included in such Registration Statement (in light of their intended plan of
distribution) may reasonably request and (ii) take such action necessary to
cause such Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental authorities as may be
necessary by virtue of the business and operations of the Company and do any and
all other acts and things that may be necessary or advisable to enable the
holders of Registrable Securities included in such Registration Statement to
consummate the disposition of such Registrable Securities in such jurisdictions;
provided, however, that the Company shall not be required to qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph or subject itself to taxation in any such
jurisdiction.

 

3.1.6 Agreements for Disposition. The Company shall enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities. The
representations, warranties and covenants of the Company in any underwriting
agreement which are made to or for the benefit of any Underwriters, to the
extent applicable, shall also be made to and for the benefit of the holders of
Registrable Securities included in such registration statement, and the
representations, warranties and covenants of the holders of Registrable
Securities included in such registration statement in any underwriting agreement
which are made to or for the benefit of any Underwriters, to the extent
applicable, shall also be made to and for the benefit of the Company.

 

B-13

 

 

3.1.7 Comfort Letter. The Company shall obtain a “cold comfort” letter from the
Company’s independent registered public accountants in the event of an
underwritten offering, in customary form and covering such matters of the type
customarily covered by “cold comfort” letters as the managing Underwriter may
reasonably request, and as are reasonably satisfactory to participating holders
holding seventy-five percent (75%) of the Registrable Securities included in
such offering.

 

3.1.8 Opinions. On the date the Registrable Securities are delivered for sale
pursuant to any Registration or Underwritten Takedown, the Company shall obtain
an opinion, dated such date, of one (1) counsel representing the Company for the
purposes of such Registration, addressed to the holders, the placement agent or
sales agent, if any, and the Underwriters, if any, covering such legal matters
with respect to the Registration in respect of which such opinion is being given
as the holders, placement agent, sales agent or Underwriter may reasonably
request and as are customarily included in such opinions, and as are reasonably
satisfactory to participating holders holding seventy-five percent (75%) of the
Registrable Securities included in such offering.

 

3.1.9 Cooperation. The principal executive officer of the Company, the principal
financial officer of the Company, the principal accounting officer of the
Company and all other officers and members of the management of the Company
shall cooperate fully in any offering of Registrable Securities hereunder, which
cooperation shall include, without limitation, the preparation of the
Registration Statement with respect to such offering and all other offering
materials and related documents, and participation in meetings with
Underwriters, attorneys, accountants and potential investors.

 

3.1.10 Records. Upon execution of confidentiality agreements, the Company shall
make available for inspection by the holders of Registrable Securities included
in such Registration Statement, any Underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
professional retained by any holder of Registrable Securities included in such
Registration Statement or any Underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, as shall be
necessary to enable them to exercise their due diligence responsibility, and
cause the Company’s officers, directors and employees to supply all information
requested by any of them in connection with such Registration Statement.

 

3.1.11 Listing. The Company shall use its commercially reasonable efforts to
cause all Registrable Securities included in any Registration Statement to be
listed on such exchanges or otherwise designated for trading in the same manner
as similar securities issued by the Company are then listed or designated.

 

3.2 Obligation to Suspend Distribution. Upon receipt of any written notice from
the Company of the happening of any event of the kind described in Section
3.1.4(iv), or, upon any suspension by the Company, pursuant to a written insider
trading compliance program adopted by the Company Board, of the ability of all
“insiders” covered by such program to transact in the Company’s securities
because of the existence of material non-public information, each holder of
Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such holder
receives the supplemented or amended prospectus contemplated by Section
3.1.4(iv) or the restriction on the ability of “insiders” to transact in the
Company’s securities is removed, as applicable, and, if so directed by the
Company, each such holder will deliver to the Company all copies, other than
permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.

 

B-14

 

 

3.3 Registration Expenses. The Company shall bear all costs and expenses
incurred in connection with the Resale Shelf Registration Statement pursuant to
Section 2.3, any Demand Registration pursuant to Section 2.1, any Demand
Takedown pursuant to Section 2.3.4(a), any Piggy-Back Registration pursuant to
Section 2.2, any other distribution pursuant to the terms hereof and all
expenses incurred in performing or complying with its other obligations under
this Agreement, whether or not the Registration Statement becomes effective,
including, without limitation: (i) all registration and filing fees; (ii) fees
and expenses of compliance with securities or “blue sky” laws (including fees
and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (iii) printing expenses; (iv) the Company’s internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees); (v) the fees and expenses incurred in connection with
the listing of the Registrable Securities as required by Section 3.1.11; (vi)
Financial Industry Regulatory Authority fees; (vii) fees and disbursements of
counsel for the Company and fees and expenses for independent certified public
accountants retained by the Company; (viii) the fees and expenses of any special
experts retained by the Company in connection with such registration and (ix)
the reasonable fees and expenses of one (1) legal counsel selected by
participating holders holding seventy-five percent (75%) of the Registrable
Securities included in such Registration or offering. The Company shall have no
obligation to pay any underwriting discounts or selling commissions attributable
to the Registrable Securities being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne by such holders.

 

3.4 Information. The holders of Registrable Securities shall promptly provide
such information as may reasonably be requested by the Company, or the managing
Underwriter, if any, in connection with the preparation of any Registration
Statement, including amendments and supplements thereto, in order to effect the
registration of any Registrable Securities under the Securities Act and in
connection with the Company’s obligation to comply with applicable state
securities laws, including each participating holder delivering to the Company a
fully completed and duly executed Selling Stockholder Questionnaire, a form of
which is attached hereto as Exhibit B.

 

4. INDEMNIFICATION AND CONTRIBUTION.

 

4.1 Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Investor and each other holder of Registrable Securities, and each
of their respective officers, employees, affiliates, directors, partners,
members, attorneys and agents, and each person, if any, who controls an Investor
and each other holder of Registrable Securities (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) (each, an “Investor
Indemnified Party”), from and against any expenses, losses, judgments, claims,
damages or liabilities, whether joint or several, arising out of or based upon
any untrue statement (or allegedly untrue statement) of a material fact
contained in any Registration Statement under which the sale of such Registrable
Securities was registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained in the Registration Statement,
or any amendment or supplement to such Registration Statement, any “free writing
prospectus” (as defined in Rule 405 under the Securities Act), or any “issuer
information” (as defined in Rule 433 under the Securities Act) or any “road
show” (as defined in Rule 433 under the Securities Act), or arising out of or
based upon any omission (or alleged omission) to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration; and
the Company shall promptly reimburse the Investor Indemnified Party for any
legal and any other expenses reasonably incurred by such Investor Indemnified
Party in connection with investigating and defending any such expense, loss,
judgment, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such expense,
loss, claim, damage or liability arises out of or is based upon any untrue
statement or allegedly untrue statement or omission or alleged omission made in
such Registration Statement, preliminary prospectus, final prospectus, or
summary prospectus, or any such amendment or supplement, any “free writing
prospectus” (as defined in Rule 405 under the Securities Act), or any “road
show” (as defined in Rule 433 under the Securities Act) in reliance upon and in
conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein.

 

B-15

 

 

4.2 Indemnification by Holders of Registrable Securities. Each selling holder of
Registrable Securities will severally, in the event that any registration is
being effected under the Securities Act pursuant to this Agreement of any
Registrable Securities held by such selling holder, indemnify and hold harmless
the Company, each of its directors and officers against any losses, claims,
judgments, damages or liabilities, whether joint or several, insofar as such
losses, claims, judgments, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or allegedly untrue
statement of a material fact contained in any Registration Statement under which
the sale of such Registrable Securities was registered under the Securities Act,
any preliminary prospectus, final prospectus or summary prospectus contained in
the Registration Statement, or any amendment or supplement to the Registration
Statement, any “free writing prospectus” (as defined in Rule 405 under the
Securities Act), or any “issuer information” (as defined in Rule 433 under the
Securities Act) or any “road show” (as defined in Rule 433 under the Securities
Act), or arise out of or are based upon any omission or the alleged omission to
state a material fact required to be stated therein or necessary to make the
statement therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company by such selling holder expressly for use therein, and shall reimburse
the Company, its directors and officers for any legal or other expenses
reasonably incurred by any of them in connection with investigation or defending
any such loss, claim, damage, liability or action. Each selling holder’s
indemnification obligations hereunder shall be several and not joint and shall
be limited to the amount of any net proceeds actually received by such selling
holder.

 

4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any person
of any notice of any loss, claim, damage or liability or any action in respect
of which indemnity may be sought pursuant to Sections 4.1 or 4.2, such person
(the “Indemnified Party”) shall, if a claim in respect thereof is to be made
against any other person for indemnification hereunder, notify such other person
(the “Indemnifying Party”) in writing of the loss, claim, judgment, damage,
liability or action; provided, however, that the failure by the Indemnified
Party to notify the Indemnifying Party shall not relieve the Indemnifying Party
from any liability which the Indemnifying Party may have to such Indemnified
Party hereunder, except and solely to the extent the Indemnifying Party is
actually prejudiced by such failure. If the Indemnified Party is seeking
indemnification with respect to any claim or action brought against the
Indemnified Party, then the Indemnifying Party shall be entitled to participate
in such claim or action, and, to the extent that it wishes, jointly with all
other Indemnifying Parties, to assume control of the defense thereof with
counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that in any action in
which both the Indemnified Party and the Indemnifying Party are named as
defendants, the Indemnified Party shall have the right to employ separate
counsel (but no more than one (1) such separate counsel, which counsel is
reasonably acceptable to the Indemnifying Party) to represent the Indemnified
Party and its controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Indemnified Party
against the Indemnifying Party, with the fees and expenses of such counsel to be
paid by such Indemnifying Party if, based upon the written opinion of counsel of
such Indemnified Party, representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, consent to entry of judgment or effect any settlement of any claim or
pending or threatened proceeding in respect of which the Indemnified Party is or
could have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such judgment or settlement includes an unconditional
release of such Indemnified Party from all liability arising out of such claim
or proceeding.

 

B-16

 

 

4.4 Contribution.

 

4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and
4.3 is unavailable to any Indemnified Party in respect of any loss, claim,
damage, liability or action referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such loss,
claim, damage, liability or action in such proportion as is appropriate to
reflect the relative fault of the Indemnified Parties and the Indemnifying
Parties in connection with the actions or omissions which resulted in such loss,
claim, damage, liability or action, as well as any other relevant equitable
considerations. The relative fault of any Indemnified Party and any Indemnifying
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
Indemnified Party or such Indemnifying Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

 

4.4.2 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.4.2 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding Section
4.4.1.

 

4.4.3 The amount paid or payable by an Indemnified Party as a result of any
loss, claim, damage, liability or action referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

 

5. UNDERWRITING AND DISTRIBUTION.

 

5.1 Rule 144. The Company covenants that it shall file any reports required to
be filed by it under the Securities Act and the Exchange Act and shall take such
further action as the holders of Registrable Securities may reasonably request,
all to the extent required from time to time to enable such holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.

 

6. BOARD OF DIRECTORS MATTERS.

 

6.1 Directors.

 

6.1.1 The Company Board will take the actions necessary such that, effective as
of the Closing Date, the Company Board shall be comprised of:

 

(a) two (2) Class I Directors, (i) one of whom shall qualify as an “independent
director” under Rule 5605(a)(2) of the of the listing rules of the Nasdaq Stock
Market (or any successor rule) or under any similar rule promulgated by such
other exchange on which the Company’s securities are then listed or designated
(such director, an “Independent Director”), and shall initially be Stephen J.
Sullivan and (ii) one of whom shall be designated by Ampersand and shall
initially be Eric Lev;

 

B-17

 

 

(b) three (3) Class II Directors, (i) one of whom shall be an Independent
Director designated by Ampersand and shall initially be Robert Gorman, (ii) one
of whom shall be an Independent Director designated by 1315 at a future date,
and (iii) one of whom shall be designated by 1315 and shall initially be Edward
Chan; and

 

(c) two (2) Class III Directors, (i) one of whom shall initially be Jack Stover,
and (ii) one of whom shall be an Independent Director and shall initially be Dr.
Joseph Keegan.

 

6.1.2 For so long as Ampersand holds at least sixty percent (60%) of the Series
B Shares held by Ampersand as of the Closing Date, Ampersand shall be entitled
to elect two (2) directors of the Company, provided that one (1) director
elected by Ampersand must qualify as an Independent Director. For so long as
Ampersand holds less than sixty percent (60%) of the Series B Shares held by
Ampersand as of the Closing Date but at least forty percent (40%) of the Series
B Shares held by Ampersand as of the Closing Date, Ampersand shall be entitled
to elect one (1) director of the Company. Each director elected pursuant to this
Section 6.1.2 is referred to herein as an “Ampersand Director.”

 

6.1.3 For so long as 1315 Capital holds at least sixty percent (60%) of the
Series B Shares held by 1315 Capital as of the Closing Date, 1315 Capital shall
be entitled to elect two (2) directors of the Company, provided that one (1)
director elected by 1315 Capital must qualify as an Independent Director. For so
long as 1315 Capital holds less than sixty percent (60%) of the Series B Shares
held by 1315 Capital as of the Closing Date but at least forty percent (40%) of
the Series B Shares held by 1315 Capital as of the Closing Date, 1315 Capital
shall be entitled to elect one (1) director of the Company. Each director
elected pursuant to this Section 6.1.3 is referred to herein as a “1315 Capital
Director” and, together with the Ampersand Director, the “Investor Directors.”

 

6.1.4 From and after the Closing Date, subject to the rules and regulations
regarding director independence of the Nasdaq Stock Market or such other
exchange on which the Company’s securities are then listed or designated, one
(1) Ampersand Director and one (1) 1315 Capital Director shall have the right to
serve on each and every committee of the Company Board.

 

6.2 Observation Rights. From and after the Closing Date, 1315 Capital shall have
the right to designate one (1) representative, who shall initially be Adele
Oliva, to attend all meetings of the Company Board and any committees or
sub-committees thereof in a nonvoting observer capacity (a “Observer”) and
Ampersand shall have right to designate two (2) Observers, who shall initially
be Herb Hooper and Laurence McCarthy; provided, that the Observers can be
excluded from any meeting of any committee or sub-committee of the Company Board
at the sole discretion of such committee or sub-committee for any reason.

 

6.3 Compensation; D&O Insurance; Indemnification. The Company shall reimburse
each Investor Director and Observer for his or her reasonable out-of-pocket
expenses incurred for the purpose of attending each meeting of the Company Board
or any committee thereof in accordance with the Company’s reimbursement policy
in effect from time to time for non-employee directors (such policy being deemed
to apply to an Observer as if he or she were a member of the Company Board).
Each Investor Director shall be entitled to the same benefits and other rights
(other than compensation) provided to any other non-executive director,
including benefits and coverage under any director and officer insurance policy
maintained by the Company. Promptly following the appointment or election of any
Investor Director, the Company and such Investor Director shall enter into an
indemnification agreement on terms substantially similar to the terms of
indemnification agreements that the Company has entered into with any other
non-executive director. The Company shall enter into an indemnification
agreement at least as favorable as the indemnification agreements entered into
with any other non-executive director after the Closing Date with any other
individual that becomes an Investor Director, if and as applicable.

 

B-18

 

 

6.4 Information Rights. From and after the Closing Date, the Company shall
deliver to the Investor Directors and Observers, as applicable, and the
Investors (for the benefit of the Investors) copies of all written information
(including, without limitation, board packages, notices, minutes, consents,
budgets, business plans, financial forecasts, financial statements (audited or
unaudited, with or without footnotes), operating reports and any other materials
to the extent and in the manner and form provided to the Company Board or any
committee or sub-committee thereof or in any periodic information required to be
delivered to any lender to the Company or any of its subsidiaries, in each case,
at the same time such information is provided to the Company Board (or any
committee or sub-committee thereof) or any such lender). The Investor Directors,
Observers and/or Investor may, in its, his or her sole discretion, request that
delivery of such written information and materials not be provided to it, him or
her at any time; provided, however, that refusal of any one or more deliveries
shall not be deemed to be an ongoing waiver or amendment of the Company’s
obligations and/or each of the Investor Director’s, Observer’s or Investor’s
rights pursuant to this Section 6.5.

 

6.5 Confidentiality. Ampersand agrees to keep confidential “Evaluation Material”
(as defined in the Ampersand Confidentiality Agreement) and 1315 Capital agrees
to keep confidential “Confidential Information” (as defined in the 1315 Capital
Confidentiality Agreement) received prior to the date hereof and all proprietary
and all non-public information regarding the Company and its subsidiaries
received pursuant to Section 6.5 (the “Confidential Information”), and in each
case not to disclose or reveal any such Confidential Information to any Person
without the prior written consent of the Company; provided, however, that
Confidential Information may be disclosed by any Investor to its members,
directors, managers, officers, employees, debt financing sources, potential
purchasers of Equity Securities from any Investor Party with respect to
transfers that would be permitted pursuant to Section 8.3, consultants, agents,
advisors and representatives, including the Investor Directors and Observers
(collectively, “Permitted Representatives”) who need to know such Confidential
Information for the purpose of evaluating, monitoring or taking any other action
with respect to the investment by any Investor in any Series B Shares or Common
Shares issued or issuable upon conversion of any Series B Shares pursuant to the
Certificate of Designation, and agree to cause such Permitted Representatives to
observe the terms of this Section 6.6; provided, that nothing herein shall
prevent any Investor or any Permitted Representative from disclosing any
Confidential Information that (1) is or becomes generally available to the
public other than as a result of any act or omission by an Investor or such
Permitted Representative in violation of this Section 6.6, (2) was available to
any Investor or Permitted Representative on a non-confidential basis prior to
disclosure to any Investor or Permitted Representative by the Company or its
representatives, (3) becomes available to any Investor or Permitted
Representatives from a source other than the Company or its representatives when
such source is entitled, to the knowledge of such Investor, to make such
disclosure without violating any fiduciary duty or any non-disclosure or
confidentiality agreement, or (4) is required to be disclosed by law, rule or
regulation (provided; that prior to such disclosure, the applicable Investor
shall, unless prohibited by law, rule, regulation or order, promptly notify the
Company of any such disclosure, use reasonable efforts to limit the disclosure
requirements of such law or order, and maintain the confidentiality of such
information to the maximum extent permitted by law, rule or regulation). If any
Investor or Permitted Representative is requested or required (by oral
questions, interrogatories, requests for information, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, it is agreed that such Investor will provide the Company with
prompt written notice of such request(s) so that the Company may seek (at the
Company’s sole cost) an appropriate protective order or other appropriate remedy
and/or waive the Investor’s compliance with this Section 6.6. If, failing the
entry of a protective order or the receipt of a waiver hereunder, any Investor
or Permitted Representative is, after consultation with outside counsel,
compelled to disclose Confidential Information, such Investor or Permitted
Representative may disclose only that portion of such information that in the
opinion of Investor’s counsel is legally required without liability hereunder;
provided, that such Investor agrees to use commercially reasonable efforts to
obtain, at the Company’s sole expense, assurance that confidential treatment
will be accorded such information, including, by cooperating with the Company to
obtain an appropriate protective order or other reliable assurance that
confidential treatment will be accorded the Confidential Information.

 

B-19

 

 

7. RIGHTS TO PURCHASE.

 

7.1 Right to Participate in Certain Sales of Additional Securities.

 

7.1.1 For so long as any shares of Registrable Securities remain outstanding,
the Company agrees that it will not (and that it will cause its subsidiaries not
to) sell or issue any shares of Capital Stock or Equity Securities, in each
case, unless (x) the Company first submits a written notice (a “Pre-Emptive
Right Notice”) to the Investors (for the benefit of the Investor Parties)
setting forth in reasonable detail (A) the designation and all of the terms and
provisions of the securities proposed to be issued (the “Proposed Securities”),
including, to the extent applicable, the voting powers, preferences and relative
participating, optional or other special rights, and the qualification,
limitations or restrictions thereof and interest rate and maturity; (B) the
price, timing (which shall be at least three (3) but no more than six (6)
Business Days after the delivery or deemed delivery of such Pre-Emptive Right
Notice to the Investor) and other terms of the proposed sale of such Proposed
Securities; and (C) the amount of such Proposed Securities proposed to be
issued; provided, that following the delivery of such notice, the Company shall
deliver to the Investors (for the benefit of the Investor Parties) any such
information the Investors may reasonably request in order to evaluate the
proposed issuance, (y) it offers to issue and sell to the Investor Parties, on
such terms as the Proposed Securities are issued and upon full payment by the
Investor Parties, the lesser of (i) fifty percent (50%) of the Proposed
Securities (to be allocated among the Investor Parties in proportion to their
respective levels of ownership of Series B Shares as of the date of the
Pre-Emptive Rights Notice) or (ii) the percentage of the Proposed Securities
equal to the aggregate Participation Portions of the Investor Parties (to be
allocated among the Investor Parties in proportion to their respective levels of
ownership of Series B Shares as of the date of the Pre-Emptive Rights Notice);
provided, however, that, subject to compliance with the terms and conditions set
forth in Section 7.1.5, the Company shall not be required to offer to issue or
sell to the Investor Parties the portion of the Proposed Securities that would
require the Company to obtain stockholder approval in respect of the issuance of
any Proposed Securities to the Investor Parties under Nasdaq Marketplace Rule
5635 unless such approval has been obtained (provided, further, however, that
the Company shall still be obligated to provide written notice of such proposed
issuance to the Investors (for the benefit of the Investor Parties), which
notice shall include a description of the Proposed Securities (including the
number thereof) that would require stockholder approval in respect of the
issuance thereof).

 

7.1.2 The Investor Parties will have the option, exercisable by written notice
delivered by the Investors (on behalf of the Investor Parties) to the Company,
to accept the Company’s offer and commit to purchase any or all of the Proposed
Securities offered to be sold by the Company to such Investor Parties, which
notice must be given prior to the later of (x) five (5) Business Days after
receipt of such notice from the Company and (y) two (2) Business Days prior to
the proposed issuance date set forth in the Pre-Emptive Right Notice (the
“Pre-Emptive Right Lapse Time”). If the Company offers two (2) or more
securities as a unit to all other participants in the offering, the Investor
Parties will be given the same choice as provided to other participants in the
offering. The closing of the exercise of such subscription right shall take
place simultaneously with the closing of the sale of the Proposed Securities
giving rise to such subscription right; provided, however, that the closing of
any purchase by any such Investor Party may be extended beyond the closing of
the sale of the Proposed Securities giving rise to such preemptive right to the
extent necessary to (i) obtain required approvals from any Governmental
Authority or (ii) permit one or more Investor Parties to receive proceeds from
calling capital pursuant to commitments made by its (or its affiliated
investment funds’) limited partners. Upon the expiration of the offering period
described above, the Company will be free to sell such Proposed Securities that
the Investor Parties have not elected to purchase during the 60 days following
such expiration on terms and conditions no more favorable to the purchasers
thereof than those offered to the Investor Parties in the Pre-Emptive Right
Notice delivered in accordance with Section 7.1.1. Any Proposed Securities
offered or sold by the Company after such 60-day period must be reoffered to
issue or sell to the Investor Parties pursuant to this Section 7.1; provided
that, subject to compliance with the terms and conditions set forth in Section
7.1.5, the Company shall not be required to reoffer to the Investor Parties the
portion of the Proposed Securities that would require the Company to obtain
stockholder approval in respect of the issuance of any Proposed Securities under
the under Nasdaq Marketplace Rule 5635 unless such approval has been obtained.

 

B-20

 

 

7.1.3 The election by any Investor Party not to exercise its pre-emptive rights
under this Section 7.1 in any one instance shall not affect its right as to any
subsequent proposed issuance.

 

7.1.4 In the case of an issuance subject to this Section 7.1 for consideration
in whole or in part other than cash, including securities acquired in exchange
therefor, the consideration other than cash shall be deemed to be the “Fair
Market Value” (as defined in the Certificate of Designation) thereof.

 

7.1.5 In the event that the Company is not required to offer or reoffer to an
Investor Party any Proposed Securities because such issuance would require the
Company to obtain stockholder approval in respect of the issuance of any
Proposed Securities under Nasdaq Marketplace Rule 5635, the Company shall, upon
the reasonable request of the Investors delivered to the Company in writing at
or before the Pre-Emptive Right Lapse Time, at the Investors’ election (acting
in its sole discretion):

 

(a) consider and discuss in good faith modifications proposed by the Investors
to the terms and conditions of such portion of the Proposed Securities which
would otherwise be issued to the Investor Party such that the Company would not
be required to obtain stockholder approval in respect of the issuance of such
Proposed Securities as so modified; and/or;

 

(b) take such actions as may be reasonably necessary to seek stockholder
approval in respect of the issuance of any Proposed Securities to the Investor
Parties, including without limitation, calling a special meeting of the
Company’s stockholders to vote on (and including in the proxy statement related
thereto) a proposal to authorize and approve potential equity issuances by the
Company upon exercise of the Investor Parties’ rights pursuant to Section 7
which occur prior to the seven-year anniversary of such special meeting and a
recommendation by the Company Board in favor of the approval of such proposal
(providing the highest level of support for the approval of such proposal as the
Company Board provides to any other proposal included in either such proxy
statement or the proxy statement for the preceding year’s annual meeting of
stockholders).

 

7.2 Exceptions. Notwithstanding the foregoing, the right to purchase granted to
the Investor Parties under this Section 7 shall be inapplicable with respect to
the issuance of Exempted Securities. The Company and the Investors also
severally agree that, with respect to an underwritten offering of securities
that is consummated within one year of the Closing Date, to the extent the offer
and sale of any securities in such underwritten offering to any Investor Party
pursuant to this Section 7 would not comply with Rule 2010 of the Financial
Industry Regulatory Authority Manual or applicable rules and regulations of the
Commission, then the Company shall not be required to make such an offer and
sale in such underwritten offering to any Investor Party pursuant to this
Section 7. In such event, the Company agrees that it will cooperate with the
Investor Parties and will promptly take all actions to effect the offer and sale
of securities to the Investor Parties in an alternative manner that complies
with Rule 2010 of the Financial Industry Regulatory Authority Manual or
applicable rules and regulations of the Commission so that the intents and
purposes of this Section 7 are effectuated, including without limitation by
offering the Investor Parties securities in a private transaction that provide
the Investor Parties the opportunity to maintain their respective proportional
stock ownership in the Company on a fully-diluted basis.

 

B-21

 

 

8. COVENANTS.

 

8.1 Standstill. The Investors agree that during the Standstill Period, without
the prior written approval of the Company or the Company Board, or as otherwise
expressly permitted or contemplated by this Agreement (including Section 7) or
the Certificate of Designation, each Investor will not and will cause its
respective Affiliates not to acquire beneficial ownership of any securities
(including in derivative form) of the Company, in each case excluding (x) the
Series B Shares purchased or issued directly from the Company or Common Shares
issuable upon conversion of the Series B Shares, and (y) any Capital Stock or
other Equity Securities of the Company pursuant to or in accordance with the
Certificate of Designation or Section 7 hereof.

 

8.2 Short Sales Prohibited. The Investors shall not engage, directly or
indirectly, in any transactions in the Company’s securities (including, without
limitation, any Short Sales involving the Company’s securities) during the
period from the date hereof until the earlier of (i) the consummation of a
Deemed Liquidation (as defined in the Certificate of Designation); and (ii) the
date that Investor Parties do not own any Series B Shares or Common Shares
issuable upon conversion of the Series B Shares.

 

8.3 Lock-Up. The Investors agree that during the Lock-Up Period, the Investors
shall not transfer any Common Shares issuable upon conversion of the Series B
Shares, except as part of a pledge by an Investor of the equity securities it
acquires in any portfolio company that is made to secure indebtedness existing
as of the date hereof for borrowed money incurred in connection with on-call
commitments of such Investor’s limited partners (a “Permitted Pledge”) or to any
Affiliate of such Investor.

 

8.4 Investor Consent Rights. For so long as any shares of the Series B Shares
remain outstanding, the following actions may only be taken by the Company or
any of its direct or indirect subsidiaries with the written consent of Investors
representing at least seventy-five percent (75%) of the outstanding Series B
Shares:

 

8.4.1 amend, waive, alter or repeal the preferences, rights, privileges or
powers of the Series B Shares;

 

8.4.2 amend, alter or repeal any provision of the Certificate of Designation in
a manner that is adverse to the holders of Series B Shares;

 

8.4.3 authorize, create or issue any equity securities senior to or pari passu
with either series of the Series B Shares; or

 

8.4.4 increase or decrease the number of directors constituting the Company
Board.

 

B-22

 

 

8.5 Additional Investor Consent Rights. For so long as at least thirty percent
(30%) of the Series B Shares outstanding as of the Closing Date remains
outstanding (as equitably adjusted for any stock split, reverse stock split,
recapitalization or similar event with respect to the Common Shares), the
following actions may only be taken by the Company or any of its direct or
indirect subsidiaries with the written consent with the consent of Investors
representing at least seventy-five percent (75%) of the outstanding shares of
Series B Shares:

 

8.5.1.1 (a) authorize, create or issue any debt securities for borrowed money or
funded debt pursuant to which the Company or any of its direct or indirect
subsidiaries issues shares, warrants or any other convertible security in the
same transaction or a series of related transactions; or (b) authorize, create
or issue any debt securities for borrowed money or funded debt pursuant to which
the Company or any of its direct or indirect subsidiaries does not issue shares,
warrants or any other convertible security in the same transaction or a series
of related transactions exceeding $4.5 million initially (the “Debt Threshold”),
excluding, however: (i) any capitalized and operating leases entered into by the
Company or its direct or indirect subsidiaries in the ordinary course of
business consistent with past practice and (ii) any debt incurred by the Company
pursuant to the terms of the Company’s existing term loan and credit facility
with Silicon Valley Bank; provided, that if the aggregate consolidated revenue
recognized by the Company and its direct or indirect subsidiaries (the “Combined
Revenue”) as reported by the Company on Form 10-K for any fiscal year ending
after the Closing Date exceeds $45 million dollars, the Debt Threshold for the
following fiscal year shall increase to an amount equal to: (i) ten percent
(10%); multiplied by (ii) the Combined Revenue as reported by the Company on
Form 10-K for the previous fiscal year;

 

8.5.1.2 merge with or acquire all or substantially all of the assets of one or
more other companies or entities with a value in excess of $20 million (the
“Acquisition Threshold”); provided, that the Acquisition Threshold shall
increase on a straight line basis to an amount up to $40 million, but in no
event greater than $40 million, to the extent Combined Revenue for the then-most
recently completed quarterly period as reported by the Company on Form 10-K or
Form 10-Q, as applicable, falls between the Combined Revenue for the Company’s
fiscal quarter ended on September 30, 2019, and 100% greater than the Combined
Revenue for the Company’s fiscal quarter ended on September 30, 2019;

 

8.5.1.3 materially change the nature of the business of the Company or any of
its direct or indirect subsidiaries as it is proposed to be conducted as of the
Closing Date;

 

8.5.1.4 consummate any Liquidation (as defined in the Certificate of
Designation);

 

8.5.1.5 transfer, by sale, exclusive license or otherwise, material intellectual
property rights of the Company or any of its direct or indirect subsidiaries,
other than licenses, transfers or sales of products accomplished in the ordinary
course of business consistent with past practice;

 

8.5.1.6 declare or pay any cash dividend or make any cash distribution on any
equity interests of the Company other than the Series B Shares;

 

8.5.1.7 repurchase or redeem any shares of capital stock of the Company, except
for: (a) the redemption of the Series B Shares pursuant to Section 5(d) of the
Certificate of Designation; or (b) repurchases of Common Shares under agreements
previously approved by the Company Board with employees, consultants, advisors
or others who performed services for the Company or any direct or indirect
subsidiary in connection with the cessation of such employment or service;

 

8.5.1.8 (a) incur any additional individual debt, indebtedness for borrowed
money or other additional liabilities pursuant to which the Company or any of
its direct or indirect subsidiaries issues shares, warrants or any other
convertible security in the same transaction or a series of related
transactions; or (b) incur any individual debt, indebtedness for borrowed money
or other liabilities pursuant to which the Company or any of its direct or
indirect subsidiaries does not issue shares, warrants or any other convertible
security in the same transaction or a series of related transactions in excess
of the Debt Threshold (in each case, excluding: (i) any capitalized and
operating leases entered into by the Company or its direct or indirect
subsidiaries in the ordinary course of business consistent with past practice;
(ii) any debt incurred by the Company pursuant to the terms of the Company’s
existing term loan and credit facility with Silicon Valley Bank; and (iii) any
purchase money financing in connection with the acquisition of equipment or
otherwise);

 

B-23

 

 

8.5.1.9 change any accounting methods or practices of the Company or any of its
direct or indirect subsidiaries, except for those changes required by GAAP or
applicable regulatory agencies or authorities, including but not limited to the
Securities and Exchange Commission and the Financial Accounting Standards Board,
in each case, as consented to by the Company’s independent auditors; or

 

8.5.1.10 conduct a public offering of Common Shares registered with the
Securities and Exchange Commission, including any at-the-market offering of the
Company’s Common Shares.

 

8.6 Tax Treatment. The Company agrees that, except as otherwise required
pursuant to a change in law applicable to the Series B Shares or a final
determination (as defined in Section 1313(a) of the Code), (a) it will not treat
the Series B Shares as “preferred stock” for purposes of Section 305 of the Code
and (b) it will not treat any accrued or accumulated but undeclared dividends on
the Series B Shares as a distribution pursuant to Section 305(c) of the Code.

 

8.7 Section 16 Matters. If the Company becomes a party to a consolidation,
merger or other similar transaction that may result in Investor, any other
Investor Party and/or any Investor Director or Observer being deemed to have
made a disposition of equity securities of the Company or derivatives thereof
for purposes of Section 16 of the Exchange Act, and if such Investor Director is
serving on the Company Board at such time or has served on the Company Board
during the preceding six months (or if the Observers are serving in its capacity
as such or has served in such capacity during the preceding six months): (i) the
Company Board will pre-approve such disposition of equity securities of the
Company or derivatives thereof for the express purpose of exempting the Investor
Parties’, the Investor Director’s and the Observer’s interests (for the Investor
Parties and/or Observers, to the extent any Investor Party or the Observers may
be deemed to be “directors by deputization”) in such transaction from Section
16(b) of the Exchange Act pursuant to Rule 16b-3 thereunder and (ii) if the
transaction involves (A) a merger or consolidation to which the Company is a
party and Common Shares or Series B Shares are, in whole or in part, converted
into or exchanged for equity securities of a different issuer, (B) a potential
acquisition by any Investor Party and/or any Investor Director or Observer of
equity securities of such other issuer or derivatives thereof and (C) an
Affiliate or associate or other designee of any Investor Party will serve on the
board of directors (or its equivalent) of such other issuer, then if the Company
requires that the other issuer pre-approve any acquisition of equity securities
or derivatives thereof for the express purpose of exempting the interests of any
director or officer of the Company or any of its subsidiaries in such
transactions from Section 16(b) of the Exchange Act pursuant to Rule 16b-3
thereunder, the Company shall require that such other issuer pre-approve any
such acquisitions of equity securities or derivatives thereof for the express
purpose of exempting the interests of the Investor Parties, the Investor
Directors and the Observers (for the Investor Parties and/or Observers, to the
extent such persons may be deemed to be “directors by deputization” of such
other issuer) in such transactions from Section 16(b) of the Exchange Act
pursuant to Rule 16b-3 thereunder.

 

8.8 Corporate Actions. At any time that any Series B Share is outstanding, the
Company shall:

 

8.8.1 take all action necessary to at all times have authorized, and reserved
for the purpose of issuance from and after the Closing Date, the number of
Common Shares issuable upon conversion of the Series B Shares in accordance with
the terms of the Certificate of Designation; and

 

8.8.2 not effect any voluntary deregistration under the Exchange Act or any
voluntary delisting with the Nasdaq Stock Market in respect of the Common Shares
other than in connection with a Deemed Liquidation (as defined in the
Certificate of Designation) pursuant to which the Company agrees to satisfy, or
will otherwise cause the satisfaction, in full of its obligations under the
Certificate of Designation.

 

B-24

 

 

8.9 Voting. Each Investor shall vote all voting securities of the Company owned
by such Investor, or over which such Investor has voting control, in favor of
the election of any individual who is nominated by the Company’s Nominating and
Corporate Governance Committee to serve as a director on the Company Board;
provided that nothing in this Section 8.9 shall prevent an Investor from
exercising its rights to designate and elect the Investor Directors as
contemplated by Section 6.1. Each Investor’s obligations pursuant to this
Section 8.9 shall terminate if such Investor is no longer entitled to designate
or elect an Investor Director pursuant to Section 6.1.

 

9. MISCELLANEOUS.

 

9.1 Other Registration Rights and Arrangements. The Company represents and
warrants that no person, other than the holders of the Registrable Securities,
has any right to require the Company to register any of the Company’s share
capital for sale or to include the Company’s share capital in any registration
filed by the Company for the sale of shares for its own account or for the
account of any other person. The Company shall not hereafter enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the holders of Registrable Securities in this Agreement
and in the event of any conflict between any such agreement or agreements and
this Agreement, the terms of this Agreement shall prevail.

 

9.2 Assignment; No Third Party Beneficiaries. This Agreement and the rights,
duties and obligations of the Company hereunder may not be assigned or delegated
by the Company in whole or in part. Subject to Section 8.3, this Agreement and
the rights, duties and obligations of the holders of Registrable Securities
hereunder may be freely assigned or delegated by such holder of Registrable
Securities in conjunction with and to the extent of any permitted transfer of
Registrable Securities by any such holder; provided, that Sections 6.1 – 6.5, 7,
8.4, 8.5, 8.6, 8.7 and 8.9 shall not be transferable or assignable to the
transferee of Registrable Securities that received such Registrable Securities
upon foreclosure of a Permitted Pledge. This Agreement and the provisions hereof
shall be binding upon and shall inure to the benefit of each of the parties
hereto and their respective successors and assigns and the holders of
Registrable Securities and their respective successors and permitted assigns.
This Agreement is not intended to confer any rights or benefits on any persons
that are not party hereto other than as expressly set forth in Section 4 and
this Section 9.2. The rights of a holder of Registrable Securities under this
Agreement may be transferred by such a holder to a transferee; provided,
however, that such transferee has executed and delivered to the Company a
properly completed agreement to be bound by the terms of this Agreement
substantially in form attached hereto as Exhibit A (an “Addendum Agreement”),
and the transferor shall have delivered to the Company no later than thirty (30)
days following the date of the transfer, written notification of such transfer
setting forth the name of the transferor, the name and address of the
transferee, and the number of Registrable Securities so transferred. The
execution of an Addendum Agreement shall constitute a permitted amendment of
this Agreement.

 

B-25

 

 

9.3 Notices. All notices, demands, requests, consents, approvals or other
communications (collectively, “Notices”) required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via email (provided
the sender does not receive a machine-generated rejection of transmission) at
the email address specified in this Section 9.3 prior to 5:00 P.M., New York
City time, on a Business Day, (b) the next Business Day after the date of
transmission, if such notice or communication is delivered via email at the
email address specified in this Section 9.3 on a day that is not a Business Day
or later than 5:00 P.M., New York City time, on any Business Day, (c) the
Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service with next day delivery specified, or (d)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as follows (or to such
other address or email address as such party shall have specified most recently
by written notice):

 

If to the Company:

 

Interpace Biosciences, Inc.

Morris Corporate Center 1, Building C

300 Interpace Parkway, Parsippany, NJ 07054

Attention: Jack E. Stover, President and CEO

Email: jstover@interpace.com

 

With a copy to:

 

Pepper Hamilton LLP

620 Eighth Avenue, 37th Floor

New York Times Building

New York, NY 10018

Attention: Merrill M. Kraines, Esquire

Email: krainesm@pepperlaw.com

 

If to 1315 Capital:

 

1315 Capital II, L.P.

2929 Walnut Street, Suite 1240

Philadelphia, PA 19104

Attention: Adele C. Oliva, Founding Partner

Email: adele.oliva@1315capital.com

 

With a copy to:

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Attention: Joanne R. Soslow, Esquire

Email: joanne.soslow@morganlewis.com

 

If to Ampersand:

 

Ampersand 2018 Limited Partnership

c/o Ampersand Capital Partners

55 William Street, Suite 240

Wellesley, MA 02481

Attention: Dana L. Niles, Chief Operating Partner

Email: dln@ampersandcapital.com

 

B-26

 

 

With a copy to:

 

Goodwin Procter LLP

100 Northern Avenue

Boston, MA 02210

Attention: James T. Barrett, Esq., and Jocelyn Arel, Esq.

Email: JBarrett@goodwinlaw.com and JArel@goodwinlaw.com

 

9.4 Severability; Amendments; Waivers. This Agreement shall be deemed severable,
and the invalidity or unenforceability of any term or provision hereof shall not
affect the validity or enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or unenforceable term
or provision, the parties hereto intend that there shall be added as a part of
this Agreement a provision as similar in terms to such invalid or unenforceable
provision as may be possible that is valid and enforceable. The provisions of
this Agreement may be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may be given, only with the written
agreement of holders holding seventy-five percent (75%) of the Registrable
Securities covered hereby.

 

9.5 Governing Law; Waiver of Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by and construed and enforced in accordance with the internal laws
of the State of Delaware, without regard to the principles of conflicts of law
thereof that would result in the application of any law other than the laws of
the State of Delaware. Each party agrees that all proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of Wilmington in the State of Delaware. Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of such
courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, or that such
proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such 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 manner permitted by law. EACH PARTY
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

9.6 Specific Enforcement. The parties acknowledge and agree that (a) the parties
shall be entitled to an injunction or injunctions, specific performance or other
equitable relief to enforce specifically the terms and provisions hereof in the
courts described in Section 9.5 without proof of damages or otherwise, this
being in addition to any other remedy to which they are entitled under this
Agreement and (b) the right of specific enforcement is an integral part of this
Agreement and without that right, neither the Company nor the Investors would
have entered into this Agreement. The parties hereto agree not to assert that a
remedy of specific enforcement is unenforceable, invalid, contrary to law or
inequitable for any reason, and agree not to assert that a remedy of monetary
damages would provide an adequate remedy or that the parties otherwise have an
adequate remedy at law. The parties hereto acknowledge and agree that any party
seeking an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this Agreement in accordance
with this Section 9.6 shall not be required to provide any bond or other
security in connection with any such order or injunction.

 

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

 

9.8 Construction; Interpretation. The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party. This
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement. Unless otherwise
indicated to the contrary herein by the context or use thereof: (i) the words,
“herein,” “hereto,” “hereof” and words of similar import refer to this Agreement
as a whole, including the Schedules and exhibits, and not to any particular
section, subsection, paragraph, subparagraph or clause contained in this
Agreement; (ii) masculine gender shall also include the feminine and neutral
genders, and vice versa; (iii) words importing the singular shall also include
the plural, and vice versa; (iv) the words “include,” “includes” or “including”
shall be deemed to be followed by the words “without limitation”; (v) financial
terms shall have the meanings given to such terms under GAAP unless otherwise
specified herein; (vi) references to “$” or “dollar” or “US$” shall be
references to United States dollars; (vii) where the context permits, the use of
the term “or” will be non-exclusive and equivalent to the use of the term
“and/or”; (viii) the word “extent” in the phrase “to the extent” shall mean the
degree to which a subject or other thing extends, and such phrase shall not mean
simply “if”; and (ix) if any action under this Agreement is required to be done
or taken on a day that is not a Business Day or on which a government office is
not open with respect to which a filing must be made, then such action shall be
required to be done or taken not on such day but on the first succeeding
Business Day thereafter.

 

9.9 Entire Agreement. This Agreement and the Securities Purchase Agreement
(including all agreements entered into pursuant hereto and thereto and all
certificates and instruments delivered pursuant hereto or thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.

 

[Signature Page Follows]

 

B-27

 

 

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

 

 

  COMPANY:         INTERPACE BIOSCIENCES, INC.         By:     Name: Jack E.
Stover   Title: President & Chief Executive Officer

 

[Remainder of Page Intentionally Left Blank]

 

Signature Page to Investor Rights Agreement

 

   

 

 

  INVESTORS:         Ampersand 2018 Limited Partnership         By: AMP-18
Management Company Limited Partnership, its General Partner         By: AMP-18
MC LLC, its General Partner

 

  By:     Name: Herbert H. Hooper   Title: Managing Member

 

  1315 CAPITAL II, L.P.         By: 1315 Capital Management II, LLC,     its
General Partner

 

  By:     Name: Adele C. Oliva   Title: Managing Member

 

Signature Page to Investor Rights Agreement

 

   

 

 

EXHIBIT A

 

Addendum Agreement

 

This Addendum Agreement (“Addendum Agreement”) is executed on
__________________, 20___, by the undersigned (the “New Holder”) pursuant to the
terms of that certain Amended and Restated Investor Rights Agreement, dated as
of January [•], 2020 (the “Agreement”), by and among the Company and the
Investors identified therein, as such Agreement may be amended, supplemented or
otherwise modified from time to time. Capitalized terms used but not defined in
this Addendum Agreement shall have the respective meanings ascribed to such
terms in the Agreement. By the execution of this Addendum Agreement, the New
Holder agrees as follows:

 

1. Acknowledgment. New Holder acknowledges that New Holder is acquiring certain
Common Shares of the Company (the “Shares”) [or other equity securities of the
Company that are convertible, exercisable or exchangeable for Common Shares of
the Company (the “Convertible Securities”)] as a transferee of such Shares [or
Convertible Securities] from a party in such party’s capacity as a holder of
Registrable Securities under the Agreement, and after such transfer, New Holder
shall be considered an “Investor” and a holder of Registrable Securities for all
purposes under the Agreement.

 

2. Agreement. New Holder hereby (a) agrees that the Shares [or Convertible
Securities] shall be bound by and subject to the terms of the Agreement and (b)
adopts the Agreement with the same force and effect as if the New Holder were
originally a party thereto.

 

3. Notice. Any notice required or permitted by the Agreement shall be given to
New Holder at the address or facsimile number listed below New Holder’s
signature below.

 

NEW HOLDER:   ACCEPTED AND AGREED:           Print Name:   INTERPACE
BIOSCIENCES, INC.           By:               By:                  

 

   

 

 

EXHIBIT B

 

SELLING STOCKHOLDER NOTICE AND QUESTIONNAIRE

 

The undersigned holder of shares of the Series B Convertible Preferred Stock,
par value $0.01 per share, of Interpace Biosciences, Inc., a Delaware
corporation (the “Company”), is a party to that certain Amended and Restated
Investor Rights Agreement, dated as of January [•], 2020, by and among the
Company, 1315 Capital II, L.P., a Delaware limited partnership, Ampersand 2018
Limited Partnership, a Delaware limited partnership (the “Agreement”), and
understands that the Company is obligated to file with the Securities and
Exchange Commission a registration statement (the “Registration Statement”) for
the registration of the Registrable Securities in accordance with the terms of
the Agreement. All capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Agreement. The undersigned has agreed to
complete, execute and deliver this Questionnaire to the Company pursuant to
Section 3.4 of the Agreement.

 

In order to sell or otherwise dispose of any Registrable Securities pursuant to
the Registration Statement, a holder of Registrable Securities generally will be
required to be named as a selling stockholder in the related prospectus or a
supplement thereto (as so supplemented, the “Prospectus”), deliver the
Prospectus to purchasers of Registrable Securities (including pursuant to Rule
172 under the Securities Act). Holders must complete and deliver this Notice and
Questionnaire in order to be named as selling stockholders in the Prospectus.
Holders of Registrable Securities who do not complete, execute and return this
Notice and Questionnaire within ten (10) Business Days following either (A) any
Investor’s delivery of a notice for Demand Registration, (B) the Company’s
delivery of a notice for Piggy-Back Registration or (C) a request from the
Company in connection with the filing of a Resale Shelf Registration Statement
pursuant to Section 2.3 of the Agreement (1) will not be named as selling
stockholders in the Registration Statement or the Prospectus and (2) may not use
the Prospectus for resales of Registrable Securities.

 

Certain legal consequences arise from being named as a selling stockholder in
the Registration Statement and the Prospectus. Holders of Registrable Securities
are advised to consult their own securities law counsel regarding the
consequences of being named or not named as a selling stockholder in the
Registration Statement and the Prospectus.

 

NOTICE

 

The undersigned holder (the “Selling Stockholder”) of Registrable Securities
hereby gives notice to the Company of its intention to sell or otherwise dispose
of Registrable Securities owned by it and listed below in Item (3), unless
otherwise specified in Item (3), pursuant to the Registration Statement. The
undersigned, by signing and returning this Notice and Questionnaire, understands
and agrees that it will be bound by the terms and conditions of this Notice and
Questionnaire and the Agreement.

 

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:

 

   

 

 

QUESTIONNAIRE

 

1. Name.

 

(a) Full Legal Name of Selling Stockholder:      

 

(b) Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:    

 

(c) Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):    

 

2. Address for Notices to Selling Stockholder:

 

      Telephone:
____________________________________________________________________________
Fax:
_________________________________________________________________________________
Contact Person:
________________________________________________________________________ E-mail
address of Contact Person:______________________________________________

 

3. Beneficial Ownership of Registrable Securities Issuable Pursuant to the
Purchase Agreement:

 

  (a) Type and Number of Registrable Securities beneficially owned and issued
pursuant to the Agreement:                  

 

 

  (b) Number of shares of Common Shares to be registered pursuant to this Notice
for resale:

 

                       

 

   

 

 

4. Broker-Dealer Status:

 

  (a) Are you a broker-dealer?

 

Yes[  ] No[  ]

 

  (b) If “yes” to Section 4(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?

 

Yes[  ] No[  ]

 

Note: If no, the Commission’s staff has indicated that you should be identified
as an underwriter in the Registration Statement.

 

  (c) Are you an affiliate of a broker-dealer?

 

Yes[  ] No[  ]

 

  Note: If yes, provide a narrative explanation below:

 

                 

 

  (d) If you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and at the time
of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

 

Yes[  ] No[  ]

 

  Note: If no, the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

 

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Stockholder.

 

Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

 

Type and amount of other securities beneficially owned:

 

__________________________________________________________________________________

 

_______________________________________________________________________________

 

6. Relationships with the Company:

 

Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

 

   

 

 

  State any exceptions here:

 

       

 

***********

 

The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the effective date of any applicable Registration Statement.
All notices hereunder and pursuant to the Agreement shall be made in writing, by
hand delivery, confirmed or facsimile transmission, first-class mail or air
courier guaranteeing overnight delivery at the address set forth below. In the
absence of any such notification, the Company shall be entitled to continue to
rely on the accuracy of the information in this Notice and Questionnaire.

 

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (6) above and the inclusion
of such information in the Registration Statement and the Prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of any such Registration
Statement and the Prospectus.

 

By signing below, the undersigned acknowledges that it understands its
obligation to comply, and agrees that it will comply, with the provisions of the
Exchange Act and the rules and regulations thereunder. The undersigned also
acknowledges that it understands that the answers to this Questionnaire are
furnished for use in connection with Registration Statements filed pursuant to
the Registration Rights Agreement and any amendments or supplements thereto
filed with the Commission pursuant to the Securities Act.

 

I confirm that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Questionnaire) are correct.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.

 

Dated: ____________________________ Beneficial Owner: ________________________  
      By:                                            Name:     Title:  

 

   

 

 

EXHIBIT C

 

WIRE INSTRUCTIONS

 

[Intentionally omitted.]

 

 C-1 

  

 

EXHIBIT D-1

 

ACCREDITED INVESTOR QUESTIONNAIRE

 

[Intentionally omitted.]

 

D-1-1

 

 

EXHIBIT D-2

 

STOCK CERTIFICATE QUESTIONNAIRE

 

[Intentionally omitted.]

 

D-2-1

 

 

EXHIBIT E

 

FORM OF SECRETARY’S CERTIFICATE

 

[Intentionally omitted.]

 

E-1

 

 

EXHIBIT F

 

FORM OF OFFICER’S CERTIFICATE

 

[Intentionally omitted.]

 

 F-1 

  

 

Schedule A

 

OPINIONS

 

[Intentionally omitted.]

 

 Schedule A-1 

  

 

Schedule B

 

SUBSIDIARIES

 

[Intentionally omitted.]

 

 Schedule B-1