Exhibit 10.1

 

Execution Version

 

INVESTMENT AGREEMENT

 

dated as of May 25, 2020

 

by and between

 

ADAPTHEALTH CORP.,

 

OEP AHCO INVESTMENT HOLDINGS, LLC

 

AND,

 

SOLELY FOR PURPOSES OF SECTION 3.10,

 

ONE EQUITY PARTNERS VII, L.P.

 

 

 

 

Article I PURCHASE; CLOSING 1 1.1   Purchase 1 1.2   Closing 2 1.3   Closing
Conditions 3 Article II REPRESENTATIONS AND WARRANTIES 5 2.1   Representations
and Warranties of the Company 5 2.2   Representations and Warranties of the
Purchaser 12 Article III COVENANTS 16 3.1   Confidentiality 16 3.2   Listing 16
3.3   Efforts 17 3.4   Legend 17 3.5   Back Leverage 18 3.6   Corporate Actions
18 3.7   Negative Covenants 18 3.8   Tax Matters 19 3.9   Stockholder Approval
20 Article IV SURVIVAL 22 4.1   Survival 22 Article V SHAREHOLDER RIGHTS 22
5.1   Board Matters 22 5.2   Information Rights 25 5.3   Transfer Restrictions
25 5.4   Standstill 26 5.5   Right of First Offer 28 Article VI MISCELLANEOUS 29
6.1   Expenses 29 6.2   Amendment; Waiver 29 6.3   Counterparts; Electronic
Transmission 30 6.4   Governing Law 30

 

 

 

 

6.5   WAIVER OF JURY TRIAL 30 6.6   Notices 30 6.7   Entire Agreement 31
6.8   Assignment 32 6.9   Interpretation; Other Definitions 32 6.10 Captions 37
6.11 Severability 37 6.12 No Third Party Beneficiaries 37 6.13 Public
Announcements 37 6.14 Specific Performance 38 6.15 Termination 38 6.16 Effects
of Termination 38 6.17 Non-Recourse 39

 

Schedule A:  Legal Opinion      Schedule B:  Investor Requirements      Schedule
C:  Competitors

 

ANNEXES

 

Annex I – Form of Certificate of Designations       Annex II – Form of Amended
and Restated Registration Rights Agreement

 

INDEX OF DEFINED TERMS

 

Term Location of Definition Affiliate 6.9(g) Agreement Preamble Beneficial
Owner/Beneficially Own/Beneficial Ownership 6.9(d) Board of Directors 5.1(a)
Board Representatives 5.1(a) BSA/PATRIOT Act 2.2(c)(8) business day 6.9(e)
Bylaws 2.1(d) Capitalization Date 2.1(b)(1) Certificate of Incorporation 2.1(d)
Class A Common Stock Recitals Class B Common Stock 2.1(b)(1) Closing 1.2(a)

 

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Term Location of Definition Closing Date 1.2(a) Closing Notice 1.2(a) Common
Stock 2.1(b)(1) Company Preamble Company Material Adverse Effect 6.9(h) Company
Stock Awards 2.1(b)(1) Company Stock Options 2.1(b)(1) Confidentiality Agreement
3.1 Contract 6.9(i) Derivative Instruments 6.9(j) DGCL 2.2(f Effect 6.9(k)
Encumbrance 6.9(l) Equity Securities 6.9(m) Exchange Act 2.1 GAAP 2.1(e)(2)
Governmental Entity 6.9(n) HSR Act 6.9(o) herein/hereof/hereunder 6.9(c)
including/includes/included/include 6.9(b) Independent Board Representative
5.1(a) Information 3.1 Knowledge of the Company 6.9(p) Law 6.9(q) Lien 6.9(r)
Non-Recourse Party 6.17 OFAC List 2.2(c)(8) or 6.9(a) person 6.9(f) Preferred
Stock 2.1(b)(1) Purchase Price 1.1 Purchaser Preamble Purchaser Board
Representative 5.1(a) Reference Date 2.1 Registration Rights Agreement 6.9(t)
SEC 2.1(e)(1) SEC Reports 2.1(e)(1) Securities Act 2.1 Shares 1.1 Stock Plan
2.1(b)(1) Subsidiary 6.9(u) Target Acquisition 6.9(v) Transfer 6.9(w) Transfer
Agent 1.2(b)(1) Transfer Instructions 1.2(b)(1) Unaffiliated Shareholders 6.9(x)
Voting Debt 2.1(b)(2) Warrants 2.1(b)(1)

 

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INVESTMENT AGREEMENT, dated as of May 25, 2020 (this “Agreement”), by and
between AdaptHealth Corp., a Delaware corporation (the “Company”), OEP AHCO
Investment Holdings, LLC, a Delaware limited liability company (the
“Purchaser”), and, solely for purposes of Section 3.10, One Equity Partners VII,
L.P., a Delaware limited partnership (the “Guarantor”).

 

RECITALS:

 

WHEREAS, the Company proposes to issue and sell to the Purchaser (including its
permitted assignees pursuant to Section 6.8) (x) shares of Class A Common Stock,
par value $0.0001 per share, of the Company (the “Class A Common Stock”) and (y)
shares of Series A Convertible Preferred Stock, par value $0.0001 per share, of
the Company (the “Series A Preferred Stock”), having the designation,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions, as
specified in the form of Certificate of Designation, Preferences and Rights
attached hereto as Annex I (the “Certificate of Designations”);

 

WHEREAS, contemporaneously with the execution hereof, the Company has entered
into that certain Stock Purchase Agreement and Agreement and Plan of Merger, by
and among the Company, Eleanor Merger Sub LLC, Solara Holdings, LLC and LCP
Solara Blocker Seller, LLC, in its capacity as Blocker Seller and the
Representative (in each case as defined therein) (the “Stock Purchase
Agreement”), regarding the Target Acquisition; and

 

WHEREAS, capitalized terms used in this Agreement have the meanings set forth in
Section 6.9 or such other section indicated in the preceding Index of Defined
Terms.

 

NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements set forth herein, the parties agree as
follows:

 

Article I

PURCHASE; CLOSING

 

1.1              Purchase.

 

(a)               On the terms and subject to the conditions herein and subject
to the satisfaction (or waiver) of the conditions set forth in Section 1.3
below, on the Closing Date (as defined below), the Company agrees to sell and
issue to the Purchaser, and the Purchaser agrees to purchase from the Company,
the Shares for the total price in cash of $190,000,000 (the “Initial Purchase
Price”); provided, that, in the event that, in one or more transactions, the
Company sells additional shares of Class A Common Stock to third-party
purchasers between the date hereof and the Closing Date (other than the shares
of Common Stock issued in connection with the Target Acquisition) at a price per
share greater than the Purchase Price Per Common Share (such sales,
collectively, the “Common Equity Offering”), then the Company may elect in its
sole discretion by providing written notice to the Purchaser at least three (3)
business days prior to the Closing Date, which such notice shall contain the
total purchase price of the shares sold in the Common Equity Offering (the
“Aggregate Common Equity Offering Amount”), to reduce the Initial Purchase Price
by an amount up to the Aggregate Common Equity Offering, not to exceed
$50,000,000 (the “Purchase Price Cut-Back”), and in such event the Stock
Consideration Amount shall be reduced by an amount equal to (rounded down to the
nearest whole number) (x) the amount of the Purchase Price Cut-Back divided by
(y) the Purchase Price Per Common Share. In consideration of the Purchaser’s
agreement to permit the Purchase Price Cut-Back, the Company shall pay to the
Purchaser an amount equal to the product of (i) 0.03 and (ii) the amount of the
Purchase Price-Cut-Back (the “Commitment Fee”), in cash. The Commitment Fee
payable to the Purchaser shall be offset against such Purchaser’s obligation to
pay its Initial Purchase Price, and the Purchaser’s Initial Purchase Price shall
be reduced (without duplication) by an amount equal to the sum of (i) the amount
of the Purchase Price Cut-Back and (ii) the Commitment Fee payable hereunder
(the Initial Purchase Price, as adjusted pursuant to this Section 1.1(a), the
“Purchase Price”).

 

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(b)               Purchased Preferred Shares and Purchased Common Shares to be
issued and sold by the Company to the Purchaser pursuant to this Agreement are
collectively referred to as the “Shares.” The Company will use the proceeds of
the Purchase Price for (a) payment of fees and expenses incurred in connection
with the transactions contemplated by this Agreement, (b) other general
corporate purposes, and (c) funding of the Target Acquisition.

 

1.2              Closing.

 

(a)               The closing of the sale of Shares contemplated hereby (the
“Closing”) shall occur on the date, and immediately prior to the consummation,
of the Target Acquisition (the consummation of the Target Acquisition, the
“Target Acquisition Closing”). Upon (a) satisfaction or waiver of the conditions
set forth in Section 1.3 of this Agreement (other than those conditions that by
their nature are to be satisfied at the Closing, but subject to their
satisfaction or waiver at or prior to the Closing), and (b) written notice from
(or on behalf of) the Company to the Purchaser (the “Closing Notice”) that the
Company reasonably expects all conditions to the Target Acquisition Closing to
be satisfied on a date that is not less than three (3) business days from the
date of such Closing Notice, the Purchaser shall deliver to the Company, at
least one (1) business day prior to the proposed date of the Closing specified
in the Closing Notice, the Purchase Price, which shall be held in escrow by the
Company until the Closing and immediately subsequent Target Acquisition Closing.
In the event the Target Acquisition Closing does not occur on the date specified
in such Closing Notice, the Company shall promptly (but not later than one (1)
business day thereafter) return the Purchase Price to the Purchaser. The date
that the Closing occurs shall be referred to as the “Closing Date”.

 

(b)               At the Closing:

 

(1)               the Company will deliver to the Purchaser (i) a copy of the
irrevocable instructions (the “Transfer Instructions”) to Continental Stock
Transfer & Trust Company (the “Transfer Agent”) instructing the Transfer Agent
to issue to such Purchaser, in book-entry form, the Purchased Common Shares and
Purchased Preferred Shares on the Closing Date, (ii) an opinion of Willkie
Farr & Gallagher LLP containing the opinions substantially in the form set forth
in Schedule A, (iii) the executed Amended and Restated Registration Rights
Agreement, in the form of Annex II hereto; provided, that the Company and the
holders of a majority of Registrable Securities (as defined in the form of
Amended and Restated Registration Rights Agreement) shall be entitled to make
amendments to the form of Amended and Restated Registration Rights Agreement to
the extent that such amendments could be made following the effectiveness
thereof after giving effect to the acquisition by Purchaser of the Shares
contemplated hereby, and (iv) all other documents, instruments and writings
required to be delivered by the Company to the Purchaser pursuant to this
Agreement or otherwise required in connection herewith.

 

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(2)               the Purchaser will deliver or cause to be delivered (i) to a
bank account previously designated by the Company in writing, the Purchase Price
by wire transfer of immediately available funds (provided, however, that the
delivery of the Purchase Price in escrow in accordance with Section 1.2 shall
satisfy this obligation), (ii) the executed Amended and Restated Registration
Rights Agreement and (iii) all other documents, instruments and writings
required to be delivered by the Purchaser to the Company pursuant to this
Agreement or otherwise required in connection herewith.

 

1.3              Closing Conditions.

 

(a)              The obligations of the Purchaser, on the one hand, and the
Company, on the other hand, to effect the Closing is subject to the satisfaction
by the Purchaser and the Company at the Closing of the following conditions:

 

(1)               the waiting period (and any extension thereof) applicable to
the consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated;

 

(2)               no temporary restraining order, preliminary or permanent
injunction or other judgement or order issued by any Governmental Entity shall
have been issued, and no Law shall be in effect, restraining, enjoining, making
illegal or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement; and

 

(3)               all conditions precedent to the Company’s obligation to
consummate closing of the Target Acquisition shall have been satisfied or,
waived (other than those conditions which, by their nature, are to be satisfied
at the closing of the Target Acquisition) and the parties to the Target
Acquisition are ready, willing and able to consummate the Target Acquisition
immediately subsequent to the Closing.

 

(b)               The obligation of the Purchaser to effect the Closing is
subject to the satisfaction by the Company at the Closing of the following
conditions:

 

(1)               (A) the Fundamental Representations (other than Section
2.1(a)(1)(ii) and Section 2.1(a)(5)) (disregarding all qualifications as to
materiality or “Company Material Adverse Effect” set forth therein) shall be
true and correct in all material respects as of the Closing Date as if made on
and as of the Closing Date (except to the extent any such Fundamental
Representation speaks as of the date of this Agreement or any other specific
date, in which case such representation or warranty shall be true and correct as
of such date), (B) Section 2.1(a)(1)(ii) (for the avoidance of doubt, without
disregarding any qualifications as to materiality or “Company Material Adverse
Effect” set forth therein) shall be true and correct in all respects as of the
Closing Date as if made on and as of the Closing Date, (C) Section 2.1(a)(5)
shall be true and correct as of the Closing Date as if made on and as of the
Closing Date and (D) the other representations and warranties of the Company set
forth in Section 2.1 (disregarding all qualifications as to materiality or
“Company Material Adverse Effect” set forth therein) shall be true and correct
as of the Closing Date as though made on and as of the Closing Date (except to
the extent any such representation or warranty speaks as of the date of this
Agreement or any other specific date, in which case such representation or
warranty shall be true and correct as of such date), except, solely with respect
to this clause (D), where the failure of such representations and warranties to
be so true and correct would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect;

 

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(2)               the Company shall have performed or complied with in all
material respects all of the covenants and agreements required to be performed
or complied with by the Company under this Agreement on or prior to the Closing
Date;

 

(3)               since the date of this Agreement, there shall not have
occurred and be continuing any Company Material Adverse Effect;

 

(4)               Purchaser shall have received a certificate, signed on behalf
of the Company by an authorized officer thereof, certifying that the conditions
set forth in Section 1.3(b)(1), 1.3(b)(2) and 1.3(b)(3) have been satisfied;

 

(5)               the Company shall have delivered to Purchaser a copy of the
Certificate of Designations that has been filed with the Secretary of State of
the State of Delaware;

 

(6)               (A) any Purchased Common Shares and (B) any shares of Common
Stock issuable upon conversion of any Purchased Preferred Shares at the
Conversion Rate specified in the Certificate of Designations as in effect on the
date hereof shall have been approved for listing on the Nasdaq, subject to
official notice of issuance;

 

(7)               if the Company Stockholder Approval has not been obtained
prior to the Closing, (A) Voting Parties shall have entered into Voting
Agreements or (B) other Persons shall have entered into other voting agreements
in substantially the form of the Voting Agreements, which Voting Agreements and
other such voting agreements collectively represent at least 45% of the voting
power of the Company as of the earlier of (x) the record date of the first
Company Stockholders’ Meeting held for the Company Stockholder Approval or (y)
the Closing entitled to vote with respect to the Company Stockholder Approval
and such Voting Agreements and other such voting agreements shall be in full
force and effect; and

 

(8)               the consents set forth on Schedule 2.1(a)(3) have been
obtained and are in full force and effect.

 

(c)              The obligation of the Company to effect the Closing is subject
to the satisfaction by the Purchaser at the Closing of the following conditions:

 

(1)               the representations and warranties of the Purchaser set forth
in Section 2.2 (disregarding all qualifications as to materiality set forth
therein) shall be true and correct as of the Closing Date as though made on the
Closing Date (except to the extent any such representation or warranty speaks as
of the date of this Agreement or any other specific date, in which case such
representation or warranty shall be true and correct as of such date), except
where the failure of such representations and warranties to be so true and
correct would not, individually or in the aggregate, reasonably be expected to
materially impair or delay the Purchaser’s ability to perform or comply with its
obligations under this Agreement or to consummate the transactions contemplated
hereby or thereby;

 

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(2)               the Purchaser shall have performed or complied with in all
material respects all covenants and agreements required to be performed or
complied with by the Purchaser under this Agreement on or prior to the Closing
Date; and

 

(3)               the Company shall have received a certificate, signed on
behalf of the Purchaser by an authorized officer thereof, certifying that the
conditions set forth in Section 1.3(c)(1) and Section 1.3(c)(2) have been
satisfied.

 

Article II

REPRESENTATIONS AND WARRANTIES

 

2.1              Representations and Warranties of the Company. Except as set
forth (x) in publicly available SEC Reports filed by the Company with the SEC
following December 31, 2019 (the “Reference Date”), excluding any disclosures
set forth in risk factors or any “forward looking statements” within the meaning
of the Securities Act of 1933 (the “Securities Act”) or the Securities Exchange
Act of 1934, as amended, (the “Exchange Act”) or (y) in a correspondingly
identified schedule attached hereto (provided that any such disclosure shall be
deemed to be disclosed with respect to each other representation and warranty to
which the relevance of such exception is reasonably apparent on the face of such
disclosure), the Company represents and warrants to the Purchaser that:

 

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(a)               Incorporation and Authority.

 

(1)               The Company is duly organized, validly existing and in good
standing under the Laws of the State of Delaware. The Company has all requisite
corporate or other applicable organizational power to (i) enter into, consummate
the transactions contemplated by, and carry out its obligations under this
Agreement, and (ii) own, lease and operate its properties and carry on its
business as presently conducted, and the Company is duly qualified to do
business and is in good standing in all jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified, except for any failure under clause (ii) that would not, individually
or in the aggregate, reasonably be expected to have a Company Material Adverse
Effect. The execution and delivery by the Company of this Agreement and each
other agreement, document, instrument, schedule or certificate contemplated by
this Agreement to be executed by the Company in connection with the transactions
contemplated hereunder (the “Ancillary Documents”) and the consummation by the
Company of the transactions contemplated by this Agreement and the Ancillary
Documents have been duly authorized by all requisite corporate or other similar
organizational action on the part of the Company. This Agreement has been and
the Ancillary Documents will be duly executed and delivered by the Company.
Assuming due authorization, execution and delivery by the other parties hereto,
this Agreement constitutes and the Ancillary Documents will constitute the
legal, valid and binding obligations of the Company, enforceable against it in
accordance with their respective terms, subject in each case to the effect of
any applicable bankruptcy, reorganization, insolvency, moratorium or similar
Laws now or hereafter in effect relating to or affecting creditors’ rights and
remedies generally and subject, as to enforceability, to the effect of general
equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law). True and complete copies of the Second Amended
and Restated Certificate of Incorporation of the Company (as amended or modified
from time to time prior to the date hereof, the “Certificate of Incorporation”))
and the Amended and Restated Bylaws of the Company (as amended or modified from
time to time prior to the date hereof, the “Bylaws”)), each as in effect, have
been made available to the Purchaser prior to the date hereof. The Board of
Directors, at a meeting duly called and held or by written consent, adopted
resolutions (i) directing that the Company submit to the holders of Common Stock
a proposal to approve the removal of the Conversion Restriction (as such term is
defined in the Certificate of Designations) at a meeting of the holders of
Common Stock in accordance with the terms of this Agreement and (ii)
recommending that the holders of the Common Stock approve the removal of the
Conversion Restriction (as such term is defined in the Certificate of
Designations) (such recommendation, the “Company Board Recommendation”), which
resolutions have not been subsequently rescinded, modified or withdrawn. The
affirmative vote (in person or by proxy) of the holders of a majority of the
shares of Common Stock (excluding the Shares and any Common Stock issued in
exchange for the Shares) voting at the stockholders meeting for the removal of
the Conversion Restriction (as such term is defined in the Certificate of
Designations) is the only vote or approval of the holders of any class or series
of capital stock of the Company or any of its Subsidiaries that is required
under the rules and regulations of the SEC, the General Corporation Law of the
State of Delaware (the “DGCL”) or Nasdaq to approve the transactions
contemplated hereby and the consummation thereof, including the conversion of
all the Shares under Nasdaq listing rule 5635 (the “Company Stockholder
Approval”).

 

(2)               Each of the Company’s Significant Subsidiaries (as defined in
Rule 1-02 of Regulation S-X of the SEC) (i) is duly organized and validly
existing under the Laws of its jurisdiction of organization, (ii) has all
requisite corporate or other applicable entity power and authority to own its
properties and conduct its business as presently conducted, and (iii) is duly
qualified to do business and is in good standing in all jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified, except, in the case of this clause (iii), where failure to be
so qualified or in good standing, individually or in the aggregate, has not and
would not reasonably be expected to have a Company Material Adverse Effect.

 

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(3)               Neither the execution and delivery by the Company of this
Agreement or the Ancillary Documents, nor the consummation of the transactions
contemplated hereby or thereby, nor compliance by the Company with any of the
provisions hereof or thereof will (a) violate or conflict with the
organizational documents of the Company, (b) conflict with or violate any Law
applicable to the Company or by which any of its properties or assets is bound
or subject or (c) result in any breach of, or constitute a default (or event
which, with the giving of notice or lapse of time or both, would constitute a
default) under, or give to any person any rights of termination, acceleration or
cancellation of or result in the creation of any Lien on any of the assets or
properties of the Company, any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which the Company
or any of its subsidiaries is a party or by which any of them or any of their
respective properties or assets is bound or subject, except, in the case of
clauses (b) and (c), for any such conflicts, violations, breaches, defaults,
terminations, accelerations, cancellations or creations as, individually or in
the aggregate, would not reasonably be expected to have a Company Material
Adverse Effect.

 

(4)               Except for (a) the filing with the SEC of such current reports
and other documents, if any, required to be filed with the SEC under the
Exchange Act or Securities Act in connection with the transactions contemplated
hereunder, including the filing with the SEC of a proxy statement relating to
the Company Stockholders’ Meeting (the “Proxy Statement”), (b) filings required
under, and compliance with other applicable requirements of, the HSR Act, (c)
compliance with any applicable state securities or blue sky laws, (d) any
filings required by the Registration Rights Agreement or the Amended and
Restated Registration Rights Agreement, as in effect at such time, (e) pursuant
to the terms of any Contract by and between the Company or any of its
Subsidiaries, on the one hand, and any Governmental Entity, on the other hand,
and (f) the filing of the Certificate of Designations with the Secretary of
State of the State of Delaware, no consent or approval of, or filing or
registration with, any Governmental Entity is necessary for the execution,
delivery and performance by the Company of this Agreement, other than such other
consents, approvals, filings or registrations that, if not obtained, made or
given, would not, individually or in the aggregate, reasonably be expected to
have a Company Material Adverse Effect.

 

(5)               As of the date hereof, the persons set forth on Schedule
2.1(a)(5) (the “Voting Parties”) represent at least 45% of the voting power of
the Company entitled to vote with respect to the Company Stockholder Approval.

 

(b)           Capitalization.

 

(1)               The total number of shares of all classes of capital stock
which the Company is authorized to issue is 250,000,000 shares, which consists
of (a) 245,000,000 shares of Common Stock, which Common Stock consists of (i)
210,000,000 shares of Class A Common Stock and (ii) 35,000,000 shares of Class B
Common Stock (“Class B Common Stock”) and (b) 5,000,000 shares of preferred
stock, par value $0.0001 per share (“Preferred Stock”). As of the close of
business on March 31, 2020 (the “Capitalization Date”), there were 43,354,251
shares of Class A Common Stock outstanding, 30,563,799 shares of Class B Common
Stock outstanding and no shares of Preferred Stock outstanding. As of the close
of business on the Capitalization Date, (i) 3,037,761 shares of Class A Common
Stock remained available for issuance pursuant to the AdaptHealth Corp. 2019
Stock Incentive Plan (the “Stock Plan”), (ii) options to purchase 3,416,666
shares of Class A Common Stock (“Company Stock Options”) pursuant to the Stock
Plan were outstanding, (iii) 1,486,956 unvested shares of Class A Common Stock
granted pursuant to the Stock Plan were outstanding (together with the Company
Stock Options, the “Company Stock Awards”), (iv) 1,000,000 shares of Class A
Common Stock remained available for issuance pursuant to the AdaptHealth 2019
Employee Stock Purchase Plan, and (v) public and private warrants to acquire
8,728,036 shares of Class A Common Stock were outstanding (the “Warrants”). All
of the issued and outstanding shares of Common Stock have been duly authorized
and validly issued and are fully paid, nonassessable and free of preemptive or
similar rights. From the Capitalization Date through and as of the date of this
Agreement, no other shares of Common Stock or Preferred Stock have been issued
other than shares of Common Stock issued in respect of the exercise of Company
Stock Options or grant or payment of Company Stock Awards in the ordinary course
of business. The Company does not have outstanding stockholder purchase rights
or “poison pill” or any similar arrangement in effect.

 

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(2)               No bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into or exchangeable for, securities having the
right to vote) on any matters on which the stockholders of the Company may vote
(“Voting Debt”) are issued and outstanding. Except (i) pursuant to any cashless
exercise provisions of any Company Stock Options or pursuant to the surrender of
shares to the Company or the withholding of shares by the Company to cover tax
withholding obligations under Company Stock Options or Company Stock Awards,
(ii) for the Warrants and (iii) as set forth in Section 2.1(b)(1), the Company
does not have and is not bound by any outstanding options, preemptive rights,
rights of first offer, warrants, calls, commitments or other rights or
agreements calling for the purchase, sale or issuance of, or securities or
rights convertible into, or exchangeable for, any shares of Common Stock or any
other equity securities of the Company or Voting Debt or any securities
representing the right to purchase or otherwise receive any shares of capital
stock of the Company (including any rights plan or agreement).

 

(c)               Sale of Securities. Based in part on the Purchaser’s
representations in Section 2.2, the offer and sale of the Shares is exempt from
the registration and prospectus delivery requirements of the Securities Act and
the rules and regulations promulgated thereunder. Without limiting the
foregoing, neither the Company nor, to the Knowledge of the Company, any other
person authorized by the Company to act on its behalf, has engaged in a general
solicitation or general advertising (within the meaning of Regulation D of the
Securities Act) of investors with respect to offer or sales of the Shares and
neither the Company nor, to the Knowledge of the Company, any person acting on
its behalf, has made any offers or sales of any security or solicited any offers
to buy any security, under circumstances that would cause the offering or
issuance of the Shares under this Agreement to be integrated with prior
offerings by the Company for purposes of the Securities Act that would result in
Regulation D or any other applicable exemption from registration under the
Securities Act not being available, nor will the Company take any action or
steps that would cause the offering or issuance of the Shares under this
Agreement to be integrated with other offerings.

 

(d)               Shares. The Shares to be delivered to the Purchaser hereunder
(including the shares of Common Stock issuable upon conversion of the Purchased
Preferred Shares) have been duly authorized and, when issued and paid for
pursuant to this Agreement and, if applicable, the Certificate of Designations,
shall be validly issued, fully paid and non-assessable and not subject to
pre-emptive rights created by statute, the Company’s Bylaws or Certificate of
Incorporation or any contract to which the Company is a party or is otherwise
bound. As of the Closing, the Company shall have the right, authority and power
to sell, assign and transfer the Shares to the Purchaser. Upon delivery of such
Shares to the Purchaser, the Purchaser shall acquire good, valid and marketable
title to the Shares, free and clear of all Liens other than restrictions on
transfer imposed by applicable securities Laws or in this Agreement, the
Registration Rights Agreement or the Amended and Restated Registration Rights
Agreement, as in effect at such time, or in the Certificate of Designations. The
Shares to be issued hereunder and the shares of Class A Common Stock issuable
upon conversion of the Purchased Preferred Shares have been duly authorized and
reserved for such issuance.

 

8

 

 

(e)               SEC Reports; Financial Statements.

 

(1)               The Company has filed, on a timely basis, all forms, reports,
prospectuses, proxy statements and documents (together with all amendments
thereof and supplements thereto) required to be filed by it with the Securities
and Exchange Commission (the “SEC”) since February 15, 2018 (together with all
exhibits and schedules thereto and all information incorporated therein by
reference, the “SEC Reports”). The SEC Reports (as of the date filed with the
SEC and, in the case of registration statements, prospectuses and proxy
statements, on the dates of effectiveness and the dates of mailing,
respectively, and, in the case of any SEC Reports amended or superseded by a
filing prior to the date hereof, then on the date of such amending or
superseding filing) (i) have complied in all material respects in accordance
with either the applicable requirements of the Securities Act or the Exchange
Act, as the case may be, and the applicable rules and regulations promulgated by
the SEC thereunder and (ii) did not contain any untrue statement of a material
fact or omit 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.

 

(2)               As of the date hereof, (A) none of the Company’s Subsidiaries
is required to file any documents with the SEC, (B) there are no outstanding or
unresolved comments in comment letters from the SEC staff with respect to any of
the SEC Reports, and (C) to the Company’s knowledge, none of the SEC Reports is
the subject of ongoing SEC review, outstanding SEC comment or outstanding SEC
investigation. Each of the certifications and statements relating to the SEC
Reports required by: (x) Rule 13a-14 or Rule 15d-14 under the Exchange Act; (y)
18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act); or (z) any other rule
or regulation promulgated by the SEC or applicable to the SEC Reports is
accurate and complete, and complies as to form and content, in all material
respects with all applicable Laws.

 

(3)               The consolidated financial statements of the Company, and the
related notes thereto, included or incorporated by reference in the SEC Reports,
as of the date filed with the SEC (and, in the case of registration statements,
prospectuses and proxy statements, on the dates of effectiveness and the dates
of mailing, respectively, and, in the case of any SEC Report amended or
superseded by a filing prior to the date hereof, then on the date of such
amending or superseding filing), have complied as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, were prepared in accordance
with generally accepted accounting principles in the United States (“GAAP”)
applied on a consistent basis during the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC), and fairly presented, in all material
respects (subject, in the case of the unaudited statements, to normal year-end
adjustments and the absence of footnote disclosure, none of which, individually
or in the aggregate, are material to the Company and its Subsidiaries taken as a
whole), the consolidated financial position of the Company and its consolidated
Subsidiaries as of the date of such financial statements and the consolidated
results of their operations and cash flows for each of the periods then ended.

 

9

 

 

(4)               The Company (a) has implemented and maintains disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act)
that are reasonably designed to provide assurance that material information
relating to the Company, including its consolidated Subsidiaries, is made known
to the individuals responsible for the preparation of the Company’s filings with
the SEC, and (b) has disclosed, based on its most recent evaluation prior to the
date of this Agreement, to the Company’s outside auditors and the Board of
Director’s audit committee (i) any significant deficiencies and material
weaknesses in the design or operation of internal controls over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act) that are
reasonably likely to adversely affect the Company’s ability to record, process,
summarize and report material financial information, and (ii) any fraud
involving the Company, whether or not material, by management or other employees
who have a significant role in the Company’s internal controls over financial
reporting. As of the date of this Agreement, to the Knowledge of the Company,
the outside auditors and its chief executive officer and chief financial officer
will be able to give the certifications and attestations required pursuant to
the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley
Act of 2002, without qualification, when next due.

 

(5)               There is no transaction, arrangement or other relationship
between the Company and/or any of its Subsidiaries and an unconsolidated or
other off-balance sheet entity that is required to be disclosed by the Company
in its SEC Reports and is not so disclosed.

 

(6)               The Proxy Statement (including any amendment or supplement
thereto) will comply as to form in all material respects with the requirements
of the Exchange Act and will not, at the time it or any amendment or supplement
thereto is filed with the SEC or at the time first published, sent or given to
the stockholders of the Company, or at the time of the Company Stockholders’
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to statements made or incorporated by reference therein
based on information supplied by or on behalf of the Purchaser or any Affiliates
thereof for inclusion or incorporation by reference in the Proxy Statement.

 

(f)                Brokers and Finders. No broker, finder or investment banker
is entitled to any brokerage, finder’s or other fee or commission in connection
with the consummation of the transactions contemplated by this Agreement based
upon arrangements made by or on behalf of the Company or its Affiliates.

 

10

 

 

(g)               Litigation. There are no actions or proceedings or, to the
Knowledge of the Company, investigations pending or, to the Knowledge of the
Company, any actions, proceedings, or investigations threatened in writing
against the Company or any of its Affiliates or any of their respective assets,
properties or businesses that (i) question the legality of the transactions
contemplated by this Agreement or (ii) individually or in the aggregate would
reasonably be expected to have a Company Material Adverse Effect. Except as has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, neither the Company nor any of its
Subsidiaries is subject to any judgment, order or decree of any Governmental
Entity.

 

(h)               Compliance with Laws. Neither the Company nor any of its
Subsidiaries is, or since February 15, 2018 has been, in violation of any
applicable Law, except where such violation would not, individually or in the
aggregate, reasonably be expected to have, or has not had, a Company Material
Adverse Effect. To the Knowledge of the Company as of the date of this
Agreement, neither the Company nor any of its Subsidiaries is being investigated
with respect to any applicable Law, except for such of the foregoing as would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.

 

(i)                 Absence of Changes. Since December 31, 2019, there has not
been any Company Material Adverse Effect or any event, change or occurrence that
would, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.

 

(j)                 Listing and Maintenance Requirements. The shares of Class A
Common Stock are registered pursuant to Section 12(b) of the Exchange Act and
listed on the Nasdaq Global Market (“Nasdaq”), and the Company has taken no
action designed to, or which to the Knowledge of the Company is reasonably
likely to, have the effect of, terminating the registration of the shares of
Class A Common Stock under the Exchange Act or delisting the Class A Common
Stock from the Nasdaq nor has the Company received as of the date of this
Agreement any notification that the SEC or the Nasdaq is contemplating
terminating such registration or de-listing.

 

(k)               Indebtedness. Neither the Company nor any of its Subsidiaries
is, immediately prior to the execution and delivery of this Agreement, in
default in the payment of any material indebtedness or in material default under
any agreement relating to its material indebtedness.

 

(l)                 Anti-Takeover Provisions. Assuming the accuracy of the
representations in Section 2.2(f), the Company and the Board of Directors have
taken all necessary action, if any, in order to render inapplicable any “control
share acquisition”, “interested stockholder”, “business combination”, “fair
price”, “moratorium”, or other similar anti-takeover provision under the
Certificate of Incorporation, Bylaws or other organizational documents or the
Laws of the State of Delaware which is applicable to the Purchaser as a result
of the consummation of the transactions contemplated by this Agreement and the
Ancillary Documents in the manner contemplated hereby and thereby, including,
without limitation, the Company’s issuance of the Shares and the Purchaser’s
ownership of the Shares and the shares of Class A Common Stock issuable upon
conversion of the Purchased Preferred Shares.

 

(m)             Investment Company Status. Neither the Company nor any
Subsidiary is an “investment company,” and, to the Company’s knowledge, neither
the Company nor any Subsidiary is a company controlled by an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company” as such terms are defined in the Investment Company
Act of 1940, as amended.

 

(n)               No Disqualification Events. With respect to the issuance of
the Shares, none of the Company, any of its predecessors, any Affiliated issuer,
any director, executive officer, other officer of the Company, any beneficial
owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, nor any promoter (as that term is
defined in Rule 405 under the Securities Act) connected with the Company in any
capacity at the time of sale is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities
Act except for items covered by Rule 506(d)(2) or (d)(3).

 

11

 

 

(o)               No Plan Assets. Neither the Company nor any of its
Subsidiaries holds “plan assets” within the meaning of the Department of Labor
regulations located at 29 C.F.R. Section 2510.3-101, as modified by Section
3(42) of the Employee Retirement Income Security Act of 1974, as amended (“Plan
Assets”).

 

(p)               No Additional Representations. Except for the representations
and warranties made by the Company in this Section 2.1, none of the Company or
any of its Affiliates or representatives makes any other representation or
warranty of any kind or nature whatsoever, oral or written, express or implied,
with respect to itself, its Affiliates, their respective businesses, this
Agreement or the transactions contemplated by the Agreement.

 

2.2              Representations and Warranties of the Purchaser. The Purchaser
hereby represents and warrants to the Company that:

 

(a)               Incorporation and Authority. The Purchaser is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization. The Purchaser has all requisite corporate or other applicable
organizational power to (i) enter into, consummate the transactions contemplated
by, and carry out its obligations under this Agreement, and (ii) own, lease and
operate its properties and carry on its business as it is now being conducted
and is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified, except for any failure under clause
(ii) that would not, individually or in the aggregate, reasonably be expected to
adversely affect the Purchaser’s ability to perform its obligations under this
Agreement or the Ancillary Documents or consummate the transactions contemplated
hereby or thereby on a timely basis. The execution and delivery by the Purchaser
of this Agreement and the Ancillary Documents and the consummation by the
Purchaser of the transactions contemplated by this Agreement and the Ancillary
Documents have been or will be duly authorized by all requisite corporate or
other similar organizational action on the part of the Purchaser. This Agreement
has been and the Ancillary Documents will be duly executed and delivered by the
Purchaser. Assuming due authorization, execution and delivery by the other
parties hereto, this Agreement constitutes and the Ancillary Documents will
constitute the legal, valid and binding obligation of the Purchaser, enforceable
against it in accordance with their respective terms, subject in each case to
the effect of any applicable bankruptcy, reorganization, insolvency, moratorium
or similar Laws now or hereafter in effect relating to or affecting creditors’
rights and remedies generally and subject, as to enforceability, to the effect
of general equitable principles (regardless of whether enforcement is sought in
a proceeding in equity or at law).

 

12

 

 

(b)               Non-Contravention.

 

(1)               Neither the execution, delivery and performance by the
Purchaser of this Agreement or the Ancillary Documents, nor the consummation of
the transactions contemplated hereby or thereby, nor compliance by the Purchaser
with any of the provisions hereof or thereof, will (A) violate, conflict with,
or result in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance required by, or
result in a right of termination or acceleration of, or result in the creation
of any Lien upon any of the properties or assets of the Purchaser under any of
the terms, conditions or provisions of (i) its governing instruments or (ii) any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Purchaser is a party or by which it
may be bound, or to which the Purchaser or any of the properties or assets of
the Purchaser may be subject, or (B) subject to compliance with the statutes and
regulations referred to in the next paragraph, violate any law, statute,
ordinance, rule or regulation, permit, concession, grant, franchise or any
judgment, ruling, order, writ, injunction or decree applicable to the Purchaser
or any of their respective properties or assets except in the case of clauses
(A)(ii) and (B) for such violations, conflicts and breaches as would not
reasonably be expected to materially and adversely affect the Purchaser’s
ability to perform its respective obligations under this Agreement or consummate
the transactions contemplated hereby on a timely basis.

 

(2)               Other than (A) the securities or blue sky laws of the various
states, (B) filings required under, and compliance with other applicable
requirements of, the HSR Act, and (C) the filing by the Company of the
Certificate of Designations with the Delaware Secretary of State, no notice to,
registration, declaration or filing with, exemption or review by, or
authorization, order, consent or approval of, any Governmental Entity, nor
expiration or termination of any statutory waiting period, is necessary for the
consummation by the Purchaser of the transactions contemplated by this Agreement
or the Ancillary Documents.

 

(c)               Securities Law Matters.

 

(1)               The Purchaser acknowledges that the Shares have not been
registered under the Securities Act or under any state securities laws. The
Purchaser (A) acknowledges that it is acquiring the Shares pursuant to an
exemption from registration under the Securities Act solely for investment with
no present intention to distribute any of the Shares to any person in violation
of applicable securities laws, (B) is acquiring the Shares only for its own
account and not for the account of others, and not on behalf of any other
account or person, (C) will not sell, transfer, pledge or otherwise dispose of
any of the Shares, except in compliance with the registration requirements or
exemption provisions of the Securities Act, any other applicable securities
laws, (D) has such knowledge and experience in financial and business matters
and in investments of this type that it is capable of evaluating the merits and
risks of its investment in the Shares and of making an informed investment
decision, (E) is an institutional “accredited investor” (as that term is defined
by Rule 501 of the Securities Act) or is a “qualified institutional buyer” (as
that term is defined in Rule 144A of the Securities Act), in each case of this
clause (E), satisfying the requirements set forth on Schedule B, and (F) can
bear the economic risk of (x) an investment in the Shares indefinitely and (y) a
total loss in respect of such investment. The Purchaser has such knowledge and
experience in business and financial matters so as to enable it to understand
and evaluate the risks of and form an investment decision with respect to, its
investment in the Shares and to protect its own interest in connection with such
investment.

 

13

 

 

(2)               In making its decision to purchase the Shares, the Purchaser
has relied solely upon independent investigation made by the Purchaser. The
Purchaser acknowledges and agrees that the Purchaser has had the opportunity to
review the SEC Reports and the Purchaser has received such information as it
deems necessary in order to make an investment decision with respect to the
Shares. The Purchaser represents and agrees that the Purchaser and the
Purchaser’s professional advisor(s), if any, have had the full opportunity to
ask such questions, receive such answers and obtain such information as the
Purchaser and the Purchaser’s professional advisor(s), if any, have deemed
necessary to make an investment decision with respect to the Shares.

 

(3)               The Purchaser became aware of this offering of the Shares
solely by means of direct contact between it and the Company or a representative
of the Company, and the Shares were offered to the Purchaser solely by direct
contact between it and the Company or a representative of the Company. The
Purchaser did not become aware of this offering of the Shares, nor were the
Shares offered to the Purchaser, by any other means. The Purchaser acknowledges
that it was not induced to purchase the Shares through any form of general
solicitation or general advertising.

 

(4)               The Purchaser acknowledges that it is aware that there are
risks incident to the purchase and ownership of the Shares. The Purchaser has
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of an investment in the Shares, and the
Purchaser has sought such accounting, legal and tax advice as the Purchaser has
considered necessary to make an informed investment decision.

 

(5)               The Purchaser is not (i) a person or entity named on the List
of Specially Designated Nationals and Blocked Persons administered by the U.S.
Treasury Department’s Office of Foreign Assets Control or in any Executive Order
issued by the President of the United States and administered by OFAC (“OFAC
List”), or a person or entity prohibited by any OFAC sanctions program, (ii) a
Designated National as defined in the Cuban Assets Control Regulations, 31
C.F.R. Part 515, or (iii) a non-U.S. shell bank or providing banking services
indirectly to a non-U.S. shell bank. The Purchaser agrees to provide law
enforcement agencies, if requested thereby, such records as required by
applicable law, provided that the Purchaser is permitted to do so under
applicable law. If the Purchaser is a financial institution subject to the Bank
Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act
of 2001, and its implementing regulations (collectively, the “BSA/PATRIOT Act”),
the Purchaser maintains policies and procedures reasonably designed to comply
with applicable obligations under the BSA/PATRIOT Act. To the extent required,
it maintains policies and procedures reasonably designed for the screening of
its investors against the OFAC sanctions programs, including the OFAC List. To
the extent required, it maintains policies and procedures reasonably designed to
ensure that the funds held by the Purchaser and used to purchase the Shares were
legally derived.

 

14

 

 

(6)               None of (i) the Purchaser, (ii) any of its directors,
executive officers, other officers that may serve as a director or officer of
any company in which it invests, general partners or managing members, nor (iii)
any beneficial owner of the Company’s voting equity securities (in accordance
with Rule 506(d) of the Securities Act) held by the Purchaser is subject to any
of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii)
under the Securities Act (a “Disqualification Event”), except for
Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under
the Securities Act and disclosed reasonably in advance of the Closing in writing
in reasonable detail to the Company.

 

(7)               The Purchaser does not hold Plan Assets.

 

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

 

(d)               Financial Capability. The Purchaser has and at the Closing
will have available funds necessary to consummate the Closing on the terms and
conditions contemplated by this Agreement. The Purchaser is not aware as of the
date hereof of any reason why the funds sufficient to fulfill its obligations
under Article I will not be available at the Closing. The Purchase Price to be
paid by Purchaser, together with the purchase price for any shares of Class A
Common Stock held by the Purchaser prior to the Closing, is less than the
maximum amount that Purchaser or Guarantor is permitted to invest in any one
portfolio investment pursuant to the terms of its organizational or governing
documents or otherwise. Purchaser has uncalled capital commitments or otherwise
has available funds in excess of the Purchase Price and all other unfunded
contractually binding equity commitments of Purchaser that are currently
outstanding.

 

(e)               Brokers and Finders. Neither the Purchaser nor its Affiliates
or any of their respective officers, directors, employees or agents has employed
any broker or finder for which the Company will incur any liability for any
financial advisory fees, brokerage fees, commissions or finder’s fees.

 

(f)                Ownership of Common Stock. As of the date of this Agreement,
except as publicly disclosed by the Purchaser prior to the date hereof, neither
the Purchaser nor any of its Affiliates owns (directly or indirectly,
beneficially or of record) any shares of Class A Common Stock and neither the
Purchaser nor any of its Affiliates holds any rights to acquire or vote any
shares of Class A Common Stock except pursuant to this Agreement. Neither the
Purchaser nor any of its “affiliates” or “associates” is or has been, within
three years of the date hereof, an “interested stockholder” of the Company, as
those terms are defined in Section 203 of the DGCL, or has taken any action that
would cause any anti-takeover statute under the DGCL to be applicable to this
Agreement or any of the transactions contemplated hereby. As of the date hereof,
there are no Contracts between the Purchaser, on the one hand, and any member of
the Company’s management or directors, on the other hand, that relate in any way
to the Company or the transactions contemplated hereby.

 

15

 

 

(g)               No Additional Representations. Except for the representations
and warranties made by the Company in this Section 2.2, none of the Purchaser or
any of its Affiliates or representatives makes any other representation or
warranty of any kind or nature whatsoever, oral or written, express or implied,
with respect to itself, its Affiliates, their respective businesses, this
Agreement, any Ancillary Document or the transactions contemplated by the
Agreement.

 

Article III

COVENANTS

 

3.1              Confidentiality. Subject to the terms and conditions set forth
in the Confidentiality Agreement, which shall remain in full force and effect in
accordance with its terms, each party to this Agreement will hold, and will
cause its respective Affiliates and their respective directors, managers,
officers, employees, agents, consultants and advisors to hold, in strict
confidence, unless disclosure to a regulatory authority is reasonably necessary
in connection with any reasonably necessary regulatory approval, examination or
inspection or unless disclosure is required by judicial or administrative
process or by other requirement of law or the applicable requirements of any
regulatory agency or relevant stock exchange (in which case, other than in
connection with a disclosure in connection with a routine audit or examination
by, or document request from, a regulatory or self-regulatory authority, bank
examiner or auditor, the party disclosing such information shall provide the
other party with prior written notice of such permitted disclosure), all
non-public records, books, contracts, instruments, computer data and other data
and information (collectively, “Information”) concerning the other party hereto
furnished to it by or on behalf of such other party or its representatives
pursuant to this Agreement (except to the extent that such information can be
shown to have been (1) previously known by such party from other sources,
provided that such source was not known, after reasonable inquiry and
investigation, by such party to be bound by a contractual, legal or fiduciary
obligation of confidentiality to the other party, (2) in the public domain
through no violation of this Section 3.1 by such party or (3) later lawfully
acquired from other sources by the party to which it was furnished), and neither
party hereto shall release or disclose such Information to any other person,
except its auditors, attorneys, financial advisors, financing sources and other
consultants and advisors.

 

3.2              Listing. At or prior to the Closing, the Company shall use its
reasonable best efforts to cause the Purchased Common Shares and the shares of
Class A Common Stock issuable upon the conversion of the Purchased Preferred
Shares issued to Purchaser pursuant to this Agreement and pursuant to the
Certificate of Designations to be approved for listing on Nasdaq, subject to
official notice of issuance, following the Closing Date. From time to time
following the Closing Date, in the event the number of shares of Class A Common
Stock into which the Series A Preferred Stock is convertible increases under the
Certificate of Designations, the Company shall apply to cause the number of
shares of Class A Common Stock issuable upon conversion of the then outstanding
shares of Series A Preferred Stock to be approved for listing on the Nasdaq.

 

16

 

 

3.3              Efforts. Subject to the other terms and conditions of this
Agreement, each of the parties hereto shall use its respective reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things reasonably necessary, proper or advisable under this Agreement
and applicable Law to, as promptly as reasonably practicable following the date
of this Agreement, consummate the Closing. In furtherance of the foregoing, to
the extent required under the HSR Act, the Purchaser and the Company agree to
each promptly, and in any event within ten (10) business days, following the
date hereof make any filings required under the HSR Act and agree to supply as
promptly as reasonably practicable any additional information and documentary
material that may be requested pursuant to the HSR Act and to take all other
actions necessary, proper or advisable to cause the expiration or termination of
the applicable waiting periods under the HSR Act as soon as practicable,
including, to the extent then available, by requesting early termination of the
waiting period provided for under the HSR Act. Each party shall, in connection
therewith, use its commercially reasonable efforts to: (i) cooperate in all
respects with the other party or its affiliates in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private person; (ii) keep the other party
reasonably informed of any communication received by such party or its
representatives from, or given by such party or its representatives to, any
governmental authority and of any communication received or given in connection
with any proceeding by a private person, in each case regarding the purchase of
the Shares; (iii) permit a representative of the other party and their
respective outside counsel to review any communication given by it to, and
consult with each other in advance of any meeting or conference with, any
governmental authority or, in connection with any proceeding by a private
person, with any other person, and to the extent permitted by such governmental
authority or other person, give a representative or representatives of the other
party the opportunity to attend and participate in such meetings and
conferences; (iv) in the event a party’s representative is prohibited from
participating in or attending any meetings or conferences, the other party shall
keep such party promptly and reasonably apprised with respect thereto; and (v)
use commercially reasonable efforts to cooperate in the filing of any memoranda,
white papers, filings, correspondence or other written communications explaining
or defending the purchase of the Shares, articulating any regulatory or
competitive argument, and/or responding to requests or objections made by any
governmental authority.

 

3.4              Legend. The Purchaser agrees that all certificates or other
instruments (including book-entry notations) representing the Shares or shares
of Class A Common Stock issued upon conversion of the Series A Preferred Stock
subject to this Agreement will bear a legend substantially to the following
effect:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.

 

Upon request of the Purchaser, upon receipt by the Company of an opinion of
counsel reasonably satisfactory to the Company to the effect that such legend is
no longer required under the Securities Act, the Company shall promptly cause
the legend to be removed from any Shares so requested.

 

17

 

 

3.5              Back Leverage.

 

(a)               Subject to the additional terms and conditions set forth on
Schedule 3.5, to the extent reasonably requested by the Purchaser, the Company
will provide customary and reasonable cooperation in good faith as may be
reasonably required in connection with the Purchaser obtaining any Back
Leverage, including entering into a waiver of transfer restrictions in customary
form to allow for Liens to be placed on the Shares.

 

(b)               The Purchaser acknowledges and agrees that, notwithstanding
the Company’s obligations under this Section 3.5, neither the obtaining of the
Back Leverage, nor the completion of any issuance of debt contemplated by the
Back Leverage, is a condition to the Closing.

 

3.6              Corporate Actions.

 

(a)               At any time that any Series A Preferred Stock is outstanding,
the Company shall from time to time take all lawful action within its control to
cause the authorized capital stock of the Company to include a sufficient number
of authorized but unissued shares of Class A Common Stock to satisfy the
conversion requirements of all shares of the Series A Preferred Stock then
outstanding, based solely on the conversion rate then in effect.

 

(b)               Prior to or upon the Closing, the Company shall file with the
Secretary of State of the State of Delaware the Certificate of Designations in
the form attached hereto as Annex I.

 

(c)               If any occurrence since the date of this Agreement until the
Closing would have resulted in an adjustment to the Conversion Rate pursuant to
the Certificate of Designations if the Series A Preferred Stock had been issued
and outstanding since the date of this Agreement, the Company shall adjust the
Conversion Rate, effective as of the Closing, in the same manner as would have
been required by the Certificate of Designations if the Series A Preferred Stock
had been issued and outstanding since the date of this Agreement.

 

(d)               At any time that any Series A Preferred Stock is outstanding,
the Company shall not adopt any stockholder rights agreement, “poison pill” or
similar anti-takeover agreement or plan that is applicable to Purchaser unless
the Company has excluded Purchaser from the definition of “acquiring person” (or
such similar term) as such term is defined in such anti-takeover agreement to
the extent of Purchaser’s beneficial ownership of Preferred Stock or Common
Stock owned as of the date any such agreement or plan is adopted by the Company.

 

3.7              Negative Covenants. Except as required by applicable Law or to
comply with any notice from a Governmental Entity, as expressly contemplated,
required or permitted by this Agreement or as described in Section 3.7 of the
Company Disclosure Schedule, during the period from the date of this Agreement
until (x) in the case of clauses (b) through (e) below, the Closing Date (or
such earlier date on which this Agreement may be terminated pursuant to Section
6.15) and (y) in the case of clause (a) below, the date on which the first
Company Stockholders’ Meeting is held for the Company Stockholder Approval (or
such earlier date on which this Agreement may be terminated pursuant to Section
6.15), unless Purchaser otherwise consents in writing (such consent not to be
unreasonably withheld, delayed or conditioned), the Company shall not:

 

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(a)               other than the authorization and issuance of the Series A
Preferred Stock to Purchaser and the consummation of the other transactions
contemplated hereunder and under the Acquisition Agreement, issue, sell or grant
any shares of its capital stock or other equity or voting interests, or any
securities or rights convertible into, exchangeable or exercisable for, or
evidencing the right to subscribe for any shares of its capital stock or other
equity or voting interests, or any rights, warrants or options to purchase any
shares of its capital stock or other equity or voting interests, in each case,
following which the Voting Parties would beneficially own less than 45% of the
outstanding equity interests eligible to vote for the Company Stockholder
Approval;

 

(b)               establish a record date for, declare, set aside for payment or
pay any dividend on, or make any other distribution in respect of, any shares of
its capital stock or other equity or voting interests;

 

(c)               amend, alter, repeal or otherwise modify (whether by merger,
consolidation or otherwise) any provision of the Certificate of Incorporation in
a manner that would adversely affect the powers, preferences, rights or
privileges of the Series A Preferred Stock or the Purchaser’s investment therein

 

(d)               take any action prohibited as provided on Schedule 3.7; or

 

(e)               agree or commit to do any of the foregoing.

 

3.8              Tax Matters. The Purchaser and the Company agree (i) not to
treat the Series A Preferred Stock (based on its terms as set forth in the
Certificate of Designations) as “preferred stock” within the meaning of Section
305 of the Code and Treasury Regulation Section 1.305-5 and (ii) to not take a
reporting position that the holders of Series A Preferred Stock are required to
include as dividend income any amounts in respect of the Series A Preferred
Stock unless and until dividends on the Series A Preferred Stock are paid in
cash or other property, in each case, for United States federal income tax and
withholding tax purposes.

 

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3.9              Stockholder Approval.

 

(a)               As promptly as reasonably practicable after the execution of
this Agreement, and in any event no later than the first to occur of (x) 30th
day following the date upon which the Company receives the Target Financial
Statements and (y) the 15th day following the Closing, the Company shall prepare
the Proxy Statement in preliminary form and file it with the SEC. The Board of
Directors shall recommend to the Company’s stockholders that the holders of the
Common Stock approve the transactions contemplated hereunder and shall include
such recommendation in the Proxy Statement. The Purchaser shall provide to the
Company all information concerning the Purchaser and its respective Affiliates
as may be reasonably requested by the Company in connection with the Proxy
Statement and shall otherwise assist and cooperate with the Company in the
preparation of the Proxy Statement and the resolution of any comments thereto
received from the SEC. Each of the Company and the Purchaser shall promptly
correct any information provided by it for use in the Proxy Statement if and to
the extent such information shall have become false or misleading in any
material respect. The Company shall notify the Purchaser promptly upon the
receipt of any comments from the SEC and of any request by the SEC for
amendments or supplements to the Proxy Statement and shall supply the Purchaser
with copies of all written correspondence between the Company or any of its
representatives, on the one hand, and the SEC, on the other hand, with respect
to the Proxy Statement. The Company shall use its reasonable best efforts to
respond as promptly as reasonably practicable to any comments received from the
SEC concerning the Proxy Statement and to resolve such comments with the SEC,
and shall use its reasonable best efforts to cause the Proxy Statement to be
disseminated to its stockholders as promptly as reasonably practicable after the
resolution of any such comments.  Prior to the filing of the Proxy Statement (or
any amendment or supplement thereto) or any dissemination thereof to the
stockholders of the Company, or responding to any comments from the SEC with
respect thereto, the Company shall provide the Purchaser with a reasonable
opportunity to review and to propose comments on such document or response,
which the Company shall consider in good faith. The Company shall inform the
Purchaser promptly (and in any event within two Business Days) of the receipt of
the Target Financial Statements (or the purported delivery of the Target
Financial Statements by Solara Holdings, LLC).

 

(b)               Subject to Section 3.9(a), the Company shall take all
necessary actions in accordance with applicable Law, the organizational
documents of the Company and the rules of Nasdaq to duly call, give notice of,
convene and hold a meeting of its stockholders (including any adjournment,
recess or postponement thereof, the “Company Stockholders’ Meeting”) for the
purpose of obtaining the Company Stockholder Approval, as soon as reasonably
practicable after the SEC confirms that it has no further comments on the Proxy
Statement. The Company shall not submit any Additional Transaction for approval
or adoption by the stockholders of the Company prior to (x) (but the Company may
submit an Additional Transaction contemporaneously with) the first Company
Stockholders’ Meeting for the Company Stockholder Approval or (y) if earlier,
the termination of this Agreement in accordance with its terms if termination
occurs prior to the Closing. The Company shall use its reasonable best efforts
to obtain the Company Stockholder Approval. Notwithstanding anything to the
contrary contained in this Agreement, the Company may, in its sole discretion,
adjourn, recess, or postpone the Company Stockholders’ Meeting (i) after
consultation with the Purchaser, to the extent necessary to ensure that any
required supplement or amendment to the Proxy Statement is provided to the
stockholders of the Company within a reasonable amount of time in advance of the
Company Stockholders’ Meeting, (ii) if as of the time for which the Company
Stockholders’ Meeting is originally scheduled (as set forth in the Proxy
Statement) there are insufficient shares of Common Stock represented (either in
person or by proxy) to constitute a quorum necessary to conduct the business of
the Company Stockholders’ Meeting or (iii) to solicit additional proxies if the
Company reasonably believes it may be necessary to obtain the Company
Stockholder Approval.

 

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3.10             Guarantee.

 

(a)               The Guarantee. The Guarantor hereby irrevocably and
unconditionally guarantees to the Company the obligations of the Purchaser
contained in this Agreement and the Ancillary Documents in accordance with the
terms and conditions set forth herein and therein, including the due and
punctual payment of all monetary obligations (including the payment of Purchase
Price) of the Purchaser pursuant to this Agreement and the Ancillary Documents.
In case of the failure of the Purchaser punctually to pay any such monetary
obligation, the Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, and as if such
payment were made by the Purchaser. The Guarantor shall cause the punctual
performance and discharge by the Purchaser of, and the compliance by the
Purchaser with, all covenants, agreements, obligations and undertakings of the
Purchaser under this Agreement and the Ancillary Documents in accordance with
the terms hereof and thereof.

 

(b)       Guarantee Unconditional. The Guarantor hereby agrees that its
obligations hereunder shall be as principal and not merely as surety, and shall
be absolute, irrevocable and unconditional, irrespective of, and shall be
unaffected by, any invalidity, irregularity or unenforceability of this
Agreement or any Ancillary Document, any failure to enforce the provisions of
this Agreement or any Ancillary Document, or any waiver, modification, consent
or indulgence granted with respect thereto by the Company, the recovery of any
judgment against the Purchaser or any action to enforce the same, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or guarantor. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of merger, insolvency or
bankruptcy of the Purchaser, any right to require a proceeding first against the
Purchaser, protest or notice with respect to any obligations guaranteed pursuant
to Section 3.10(a) and all demands whatsoever, and covenants that the
obligations under this Section 3.10 will not be discharged except by payment in
full of any obligations guaranteed pursuant to Section 3.10(a).

 

(c)       Reinstatement. The guarantees in this Section 3.10 shall continue to
be effective or be reinstated, as the case may be, if at any time any
obligations guaranteed pursuant to Section 3.10(a), in whole or in part, is
rescinded or must otherwise be restored to the Purchaser or the Guarantor upon
the bankruptcy, liquidation or reorganization of the Purchaser or otherwise.

 

(d)       Subrogation. The Guarantor shall be subrogated to all rights of the
Company against the Purchaser in respect of any amounts paid to the Company by
the Guarantor pursuant to the provisions of this Section 3.10; provided,
however, that the Guarantor shall not be entitled to enforce, or to receive any
payments arising out of or based upon, such right of subrogation until the
obligations guaranteed pursuant to Section 3.10(a), when and as the same shall
become due and payable according to the terms of this Agreement or any Ancillary
Documents shall have been paid in full.

 

(e)       Representations and Warranties of the Guarantor.

 

(i)       Authority. The Guarantor has all requisite power and authority to
enter into this and to provide the undertakings contemplated by this Section
3.10. All acts and proceedings required to be taken to authorize the execution,
delivery, and performance by the Guarantor of this Agreement and provide the
undertakings contemplated by this Section 3.10 have been duly and properly
taken. This Agreement has been duly executed, and delivered by the Guarantor
and, assuming due authorization, execution and delivery by Seller, constitutes a
valid and binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium and other similar laws affecting creditors’
rights generally and by general principles of equity.

 

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(ii)       Non Contravention. The execution, delivery, and performance by the
Guarantor of this Agreement does not, and the consummation by the Guarantor of
its obligations under this Section 3.10 will not, (x) conflict with, or result
in any violation of, any provision of the certificate of limited partnership or
limited partnership agreement (or similar organizational documents) of the
Guarantor, or (y) conflict with, result in any violation of, or constitute a
default under, any Contract to which the Guarantor is a party or by which the
Guarantor or the property or assets of the Guarantor is bound, or any judgment,
order, writ, injunction, or decree to which the Guarantor has been specifically
identified as subject, or result in any violation of any statute, law,
ordinance, rule, or regulation applicable to the Guarantor or its property or
assets (except where such conflict, violation, or default would not, reasonably
be expected to, individually or in the aggregate, materially impair or delay the
ability of the Guarantor to perform its obligations under this Section 3.10(a).

 

(iii)       Financial Capacity. The Guarantor has, and will have, the financial
capacity to pay and perform its obligations under this Section 3.10, including
payment and satisfaction of obligations guaranteed pursuant to Section 3.10(a).

 

Article IV

SURVIVAL

 

4.1              Survival. The representations and warranties of the parties
contained in this Agreement shall survive for twelve (12) months following the
Closing. All of the covenants or other agreements of the parties contained in
this Agreement to be performed prior to the Closing shall terminate at the
Closing. All covenants or agreements of the parties contained in this Agreement
to be performed following the Closing shall survive until fully performed or
fulfilled, unless and to the extent that non-compliance with such covenants or
agreements is waived in writing by the party entitled to such performance.

 

Article V

SHAREHOLDER RIGHTS

 

5.1              Board Matters.

 

(a)               Promptly following the Closing Date, and in any event within
five (5) business days following the Closing Date, the Company shall increase
the size of the Board of Directors of the Company (the “Board of Directors”) by
two (2) members and, promptly following such increase, and in any event within
five (5) business days following the Closing Date, shall cause Brad Coppens to
be elected or appointed to the Board of Directors (the “Purchaser Board
Representative”) and one independent director nominated by the Company or Board
of Directors to be elected or appointed to the Board of Directors (the
“Independent Board Representative” and together with the Purchaser Board
Representative, the “Board Representatives”). The election or appointment of the
Board Representatives will be subject to satisfaction of all legal and
governance requirements regarding service as a director of the Company and to
the reasonable approval of the Nominating and Governance Committee of the Board
of Directors (such approval not to be unreasonably withheld, conditioned or
delayed); provided, that the parties hereto agree that election of Brad Coppens
to serve as the Purchaser Board Representative shall be acceptable and no such
approval of the Nominating and Governance Committee shall be required. For so
long as the Purchaser or an Affiliate of Purchaser holds at least 25% of the
Shares, on an as-converted basis, issued to the Purchaser hereunder, on an
as-converted basis, the Purchaser shall continue to have the right to nominate
the Purchaser Board Representative. Subject to this Section 5.1(a), so long as
the Purchaser has the right to nominate the Purchaser Board Representative to
the Board of Directors, the Company shall not increase the number of Directors
on the Board of Directors without the prior consent of the Purchaser. The
Company will reimburse the Purchaser Board Representative and any observer
appointed pursuant to Section 5.1(b) for their respective reasonable and
documented out-of-pocket expenses incurred in connection with travel to or from
and attendance at each meeting of the Board of Directors. The Purchaser Board
Representative will receive the same director compensation as each other
non-executive director of the Board of Directors. The Purchaser agrees, upon the
Company’s request, to timely provide the Company with accurate and complete
information relating to the Purchaser Board Representative as may be required to
be disclosed by the Company under the Exchange Act and the rules and regulations
promulgated thereunder. Notwithstanding any rights to be granted with respect to
the Purchaser Board Representative hereunder, the Board of Directors may exclude
the Purchaser Board Representative from access to any Board of Directors or
committee materials or information or meeting or portion thereof or written
consent if the Board of Directors determines, in good faith, including the
Purchaser Board Representative in discussions relating to such determination
(but not requiring the affirmative vote of such Purchaser Board Representative),
that such access would reasonably be expected to result in a conflict of
interest with the Company; provided, that such exclusion shall be limited to the
portion of the Board of Directors or committee material or information and/or
meeting or written consent that is the basis for such exclusion and shall not
extend to any portion of the Board of Directors or committee material and/or
meeting that does not involve or pertain to such exclusion.

 

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(b)               Following the Closing Date and for so long as the Purchaser or
an Affiliate of Purchaser holds at least 50% of the Shares, on an as-converted
basis, issued to the Purchaser hereunder, on an as-converted basis, the
Purchaser shall have the right (in addition to the rights set forth in Section
5.1(a)) to designate a non-voting observer of the Board of Directors, which
observer shall be an employee or partner of the Purchaser or one of its
Affiliates. The observer shall be entitled to receive notice of and have the
right to attend any and all meetings of the Board of Directors, and the Company
shall provide the observer with copies of all notices, minutes, consents and
other material in connection therewith at the same time as such materials are
distributed to members of the Board of Directors; provided, that (A) the
Purchaser shall cause the observer to agree to hold in confidence and trust and
to act in a fiduciary manner with respect to all information provided to the
observer pursuant hereto and (B) the Company and the Board of Directors shall
have the right to withhold any information and to exclude the observer from any
meeting or portion thereof (1) if doing so is, in the opinion of outside counsel
to the Company, advisable or necessary to protect the attorney-client privilege
between the Company and counsel or (2) if the Board of Directors determines in
good faith, after consultation with outside counsel, that fiduciary requirements
under applicable law would make attendance by the observer not advisable;
provided, further, that, if the Company and/or the Board of Directors withhold
any information or exclude the observer from any meeting pursuant to the
foregoing clause (B), to the extent practicable they shall give Purchaser notice
of such withholding or exclusion and the parties shall cooperate in seeking to
allow disclosure of such information in a manner that is not reasonably likely
(in the good faith belief of the Company and the Board of Directors (after
consultation with outside counsel)) to contravene such applicable law or cause
such privilege to be waived. The observer shall have no right to vote on any
matters presented to the Board of Directors. All obligations of the Company
pursuant to this Section 5.1(b) shall terminate, and, upon request by the Board
of Directors, the Purchaser shall cause the observer to resign promptly from the
Board of Directors, in each case upon the Purchaser ceasing to have the right to
designate the observer pursuant to this Section 5.1.

 

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(c)               For so long as the Purchaser has the right to designate or
nominate the Purchaser Board Representative pursuant to Section 5.1(a), the
Company and the Nominating and Governance Committee of the Board of Directors
shall take such action as is required under applicable law, the rules and
regulations in effect at such time of Nasdaq or such other market on which the
Class A Common Stock is then listed or quoted or under the Bylaws or Certificate
of Incorporation to include on the Board of Directors or in the slate of
nominees recommended by the Board of Directors such person designated or
nominated, as the case may be, by the Purchaser pursuant to Section 5.1. The
Company shall use its reasonable best efforts to have the Purchaser Board
Representative elected as a director of the Company and the Company shall
solicit proxies for such person to the same extent as it does for any of its
other nominees to the Board of Directors. For so long as the Purchaser has the
right to designate or nominate the Purchaser Board Representative, in the event
that a vacancy is created at any time by the death, disability, retirement,
resignation or removal of the Purchaser Board Representative, the Purchaser may
designate or nominate, as applicable, another individual to be elected to fill
the vacancy created thereby, and the Company hereby agrees to take, at any time
and from time to time, all actions necessary to accomplish the same. For so long
as the Purchaser has the right to designate or nominate the Purchaser Board
Representative pursuant to Section 5.1(a) and the Purchaser Board Representative
is a member of the Board of Directors, the Purchaser Board Representative shall
be appointed to the compensation committee and the nominating and governance
committee of the Board of Directors; provided, that if applicable SEC rules or
Nasdaq listing rules do not permit the Purchaser Board Representative to be a
member of such committee, then the Board of Directors shall appoint the
Purchaser Board Representative as a non-voting observer of such committee if
designated by Purchaser.

 

(d)               The Company shall maintain in effect at all times directors’
and officers’ indemnity insurance covering the Purchaser Board Representative to
the same extent and on the same terms as any directors’ and officers’ indemnity
insurance maintained by the Company with respect to the other non-executive
members of the Board of Directors. Any directors’ and officers’ indemnity
insurance shall be primary to any insurance coverage for the Purchaser Board
Representative maintained by any other person. At the Closing, the Company and
the Purchaser Board Representative shall enter into an indemnification agreement
substantially similar to the form included as Exhibit 10.4 to the Company’s Form
10-K for the fiscal year ended December 31, 2019 (the “Indemnification
Agreement”).

 

(e)               All obligations of the Company pursuant to this Section 5.1
relating to the Purchaser Board Representative shall terminate, and, upon
request by the Board of Directors, the Purchaser shall cause the Purchaser Board
Representative to resign promptly from the Board of Directors, in each case upon
the Purchaser ceasing to have the right to designate or nominate a director
pursuant to Section 5.1. Any vacancy created by such resignation may be filled
by the Board of Directors or the shareholders of the Company in accordance with
the Bylaws or Certificate of Incorporation and applicable law.

 

24

 

 

5.2              Information Rights. From and after the date hereof and for so
long as the Purchaser or an Affiliate of Purchaser holds at least 25% of the
Shares, on an as-converted basis, issued to the Purchaser hereunder, on an
as-converted basis:

 

(a)               The Company will provide to the Purchaser the annual,
quarterly and periodic reports of the Company in the time periods required for
the filing of such reports with the SEC as soon as reasonably practicable after
they become available; provided, however, that the filing of such reports with
the SEC shall satisfy such delivery requirement.

 

(b)               The Company will permit the Purchaser and its representatives,
at the Purchaser’s expense, to reasonable and customary rights to the
information of the Company and access to management of the Company, all at such
reasonable times and as often as may be reasonably requested.

 

5.3              Transfer Restrictions.

 

(a)               Other than Permitted Transfers, the Purchaser shall not
Transfer any Shares, or the shares of Class A Common Stock issuable upon
conversion of the Purchased Preferred Shares (together, the “Prohibited Shares”)
during the period commencing on the Closing Date and continuing until the date
that is the eighteen (18) month anniversary of the Closing Date (such date, the
“Restricted Period Termination Date”). Notwithstanding the foregoing, in the
event that following the six (6) month anniversary of the Closing Date (x) the
volume weighted average price of the Class A Common Stock exceeds $22.50 (as
adjusted for share splits, share dividends, reorganizations, recapitalizations,
reclassifications, combinations, exchanges of shares or other like changes) for
twenty (20) consecutive trading days, 50% of the Prohibited Shares shall no
longer be subject to the Transfer restrictions set forth in the first sentence
of this Section 5.3(a) and (y) the volume weighted average price of the Class A
Common Stock exceeds $30.00 (as adjusted for share splits, share dividends,
reorganizations, recapitalizations, reclassifications, combinations, exchanges
of shares or other like changes) for twenty (20) consecutive trading days, 100%
of the Prohibited Shares shall no longer be subject to the Transfer restrictions
set forth in the first sentence of this Section 5.3(a) (in either case, a
“Restricted Period Early Termination Event”).

 

(b)               “Permitted Transfer” means, in each case so long as such
Transfer is in accordance with applicable Law:

 

(1)               a Transfer of Prohibited Shares to Affiliates of the
Purchaser, so long as such transferee, to the extent it has not already done so,
executes a customary joinder to this Section 5.3, in form and substance
reasonably acceptable to the Company, in which such transferee agrees to be
subject to the restrictions on Transfer in this Section 5.3;

 

(2)               a Transfer of Prohibited Shares as a distribution in-kind to
the Purchaser’s investors, and to their subsequent investors, including limited
partners, so long as all such transferees, to the extent it has not already done
so, executes a customary joinder to this Section 5.3, in form and substance
reasonably acceptable to the Company, in which such transferee agrees to be
subject to the restrictions on Transfer in this Section 5.3;

 

25

 

 

(3)               a Transfer of Prohibited Shares in connection with the
exercise of piggyback registration rights set forth in the Registration Rights
Agreement or the Amended and Restated Registration Rights Agreement, as in
effect at such time;

 

(4)               a Transfer of Prohibited Shares in connection with a sale of
the Company approved by the Board of Directors or in connection with a tender
offer into which a majority of the Unaffiliated Shareholders of the Company have
tendered their respective shares of Common Stock;

 

(5)               a Transfer of Prohibited Shares to the Company; and

 

(6)               a Transfer of Prohibited Shares following a voluntary filing
by the Company of a petition for relief under the United States Bankruptcy Code.

 

(c)               Notwithstanding anything to the contrary contained herein,
including the occurrence of the Restricted Period Termination Date, the
Purchaser shall not Transfer any Prohibited Shares (i) other than in accordance
with all applicable Laws and the other terms and conditions of this Agreement
and (ii) other than any Transfers that are made pursuant to a registered
offering or in accordance with an exemption from registration. Any Transfers of
Prohibited Shares shall only be made to a person that, to Purchaser’s knowledge,
is not a competitor of the Company set forth on Schedule C attached hereto and
that does not become a competitor of the Company after the date hereof, as set
forth on a quarterly or annual report filed by the Company with the SEC.

 

(d)               The Company may impose stop-transfer instructions and may
stamp each certificate representing the Prohibited Shares with an appropriate
legend to enforce the provisions of this Section 5.3. Any purported Transfer or
other transaction in violation of this Section 5.3 shall be null and void.

 

5.4              Standstill.

 

(a)               For so long as the Purchaser Beneficially Owns Shares
representing at least twenty five percent (25%), on an as-converted basis, of
the Shares issued to the Purchaser pursuant to this Agreement, on an
as-converted basis, without the prior written consent of the Company, the
Purchaser shall not, and shall cause its Affiliates not to, directly or
indirectly:

 

(1)               acquire, offer to acquire or agree or make a proposal to
acquire Beneficial Ownership of Common Stock or any Derivative Instruments with
respect to Common Stock, except pursuant to share splits, reverse share splits,
share dividends or distributions, or combinations or any similar
recapitalizations on or after the date hereof or offerings made available to
holders of Common Stock generally on a pro rata basis including;

 

(2)               effect or seek, offer or propose to effect, or announce any
intention to effect or cause or participate in (A) any acquisition of any
securities (or beneficial ownership thereof) or material assets of the Company
or any of its Affiliates, including rights or options to acquire such ownership,
in connection with any “change of control” of the Company; (B) initiate or
propose any merger, tender offer, business combination, restructuring,
recapitalization or other extraordinary transaction involving, or any change of
control of, the Company or any of its Subsidiaries; (C) any shareholder proposal
(including any precatory proposal) to be considered by the stockholders of the
Company, or take any action to nominate any person for membership on the Board
of Directors, or take any action to remove any director (other than the
Purchaser Board Representative) from the Board of Directors of the Company or to
change the composition of the board of directors of the Company or (D) make, or
in any way participate in, directly or indirectly, any “solicitation” of
“proxies” to vote, or seek to influence any person with respect to the voting
of, Shares, or become a “participant” in a “solicitation” (as such terms are
defined in Regulation 14A under the Exchange Act) with respect to Common Stock;
provided that the foregoing shall not restrict the Purchaser’s right to vote its
Common Stock in its sole discretion;

 

26

 

 

(3)               deposit any Common Stock into a voting trust or subject Common
Stock to any proxy, arrangement or agreement with respect to the voting of such
securities or other agreement having a similar effect (other than a proxy
provided to the management of the Company in connection with an annual or
special meeting of shareholders);

 

(4)               initiate or propose a call for any special meeting of the
Company’s shareholders;

 

(5)               otherwise act, alone or in concert with others, to seek or
propose to influence, advise, change or control the management, Board of
Directors, governing instruments or policies of the Company or any of its
Subsidiaries;

 

(6)               propose, or agree to, or enter into any discussions,
negotiations or arrangements with, or provide any confidential information to,
any third party with respect to any of the foregoing;

 

(7)               form, join or in any way participate in any “group” (within
the meaning of Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) with respect to any securities of the Company or
otherwise in connection with any of the foregoing;

 

(8)               disclose any intention, plan, proposal or arrangement
inconsistent with any of the foregoing;

 

(9)               advise, assist, knowingly encourage or direct any other person
to do any of the foregoing, or act as a financing source for or otherwise invest
in any person in connection with such person doing any of the foregoing;

 

(10)           take any action that could reasonably be expected to require the
Company to make a public announcement regarding the possibility of a transaction
with you or any of your affiliates or any of the other events described in this
paragraph; or

 

(11)           take any action challenging the validity or enforceability of
this paragraph, or request the Company amend or waive any provision of this
paragraph (including this clause (11)), provided, that the Purchaser may make
confidential requests to the Company to amend or waive any of the limitations
set forth in this Section 5.4(a), which the Company may accept or reject in its
sole discretion, so long as any such request is made in a manner that does not
require the public disclosure thereof by any person.

 

27

 

 

(b)               The prohibition in Section 5.4(a)(1) shall not apply in
connection with acquisitions made as a result of a share split, share dividend,
reorganization, recapitalization, reclassification, combination, exchange of
shares or other like change and shall not restrict (1) the ability of the
Purchaser Board Representative to vote or from otherwise exercising his or her
fiduciary duties, (2) the Purchaser’s ability to vote, Transfer, convert or
otherwise exercise rights under its Shares subject to the express obligations
hereof. 

 

5.5              Right of First Offer. Except for a Permitted Transfer, in the
event of any proposed sale of shares of Series A Preferred Stock to a third
party by Purchaser, the provisions of this Section 5.5 shall apply:

 

(a)               If and whenever Purchaser desires to sell shares of Series A
Preferred Stock to a third party (other than a Permitted Transfer) (any such
transaction, a “Proposed Sale”), Purchaser shall first deliver to the Company
written notice thereof (a “ROFO Notice”). The ROFO Notice shall disclose (i)
Purchaser’s bona fide intention to effectuate such Proposed Sale and (ii) the
number of shares of Series A Preferred Stock to be sold. The Company may elect
to offer to purchase all (but not less than all) of the shares of Series A
Preferred Stock to be sold in the Proposed Sale by giving written notice of such
offer (an “Offer Notice”), to Purchaser within ten (10) business days after the
ROFO Notice has been delivered to the Company (the “Offer Period”). If the
Purchaser timely accepts the Offer Notice, then Purchaser shall be obligated to
sell pursuant to the Offer Notice, and the Company obligated to purchase
pursuant to the Offer Notice, in each case, for the ROFO Price, and the Company
and Purchaser shall use commercially reasonable efforts to effect the
consummation of the Proposed Sale of such shares of Series A Preferred Stock
contemplated by the Offer Notice as promptly as practicable, but, in any event,
within fifteen (15) business days following delivery of the Offer Notice. If the
Company notifies Purchaser that the Company does not wish to purchase the
applicable shares of Series A Preferred Stock specified in the ROFO Notice, or
if the Company fails, within the Offer Period, to notify Purchaser of its
response to the ROFO Notice, then Purchaser will have a period of ninety (90)
days after delivery of the ROFO Notice to consummate the Proposed Sale at a
price per share of Series A Preferred Stock that is equal to or greater than the
ROFO Price. If the aforesaid ninety (90) day period expires without Purchaser
consummating the Proposed Sale, the foregoing rights of the Company under this
Section 5.5 will apply with respect to such Proposed Sale and any other
potential Proposed Sale. As used herein, the “ROFO Price” per share of Series A
Preferred Stock means the greater of (x) the Conversion Price and (y) the amount
obtained by multiplying (i) the Closing Price (as defined in the Certificate of
Designations) of the Class A Common Stock on the trading day immediately prior
to the closing of the sale of such shares of Series A Preferred Stock times (ii)
the number of shares of Class A Common Stock into which a share of Series A
Preferred Stock is then convertible.

 

(b)               Purchaser will, in its sole discretion, decide whether or not
to pursue, consummate, postpone or abandon any sale of shares of Series A
Preferred Stock and the terms and conditions thereof. Neither Purchaser, nor any
of its Affiliates will have any liability to any other holder of securities of
the Company arising from, relating to or in connection with the pursuit,
consummation, postponement, abandonment or terms and conditions of any sale of
shares of Series A Preferred Stock except to the extent Purchaser will have
failed to comply with the provisions of this Section 5.5 or any other binding
agreement.

 

28

 

 

(c)               The closing of a sale of shares of Series A Preferred Stock to
which Section 5.5 applies will take place at such time and place as the Company
will specify by notice to the Purchaser. At the closing of such sale of shares
of Series A Preferred Stock, Purchaser will deliver the certificates evidencing
the shares of Series A Preferred Stock, if any, to be sold by Purchaser, duly
endorsed for transfer with signature guaranteed, free and clear of any liens or
encumbrances, with any necessary transfer tax stamps affixed, against delivery
of the applicable consideration. The purchase price specified in any Offer
Notice shall be payable solely in immediately available funds at the closing of
the transaction. For the avoidance of doubt, this Section 5.5 shall not apply to
any sale of shares of the Class A Common Stock issuable upon conversion of the
Series A Preferred Stock.

 

(d)               For the avoidance of doubt, compliance with this Section 5.5
shall not eliminate or otherwise relieve the Purchaser from any restrictions on
Transfer applicable to the Shares.

 

Article VI

MISCELLANEOUS

 

6.1              Expenses. Each of the parties will bear and pay all costs and
expenses incurred by it or on its behalf in connection with the transactions
contemplated pursuant to this Agreement, including the fees and expenses of
attorneys, accountants, investment bankers and consultants; provided that the
Company shall, upon the Closing of the transaction contemplated hereby reimburse
the Purchaser for its reasonable and documented out-of-pocket third-party costs
and expenses incurred in connection with due diligence, the negotiation and
preparation of this Agreement and undertaking of the transactions contemplated
pursuant to this Agreement, including any documentary, stamp and similar issue
or transfer tax due on the issuance of the Shares to Purchaser, and excluding
any costs or expenses of obtaining any Back Leverage; provided that the maximum
amount of such reimbursable costs and expenses shall not exceed $500,000 in the
aggregate. In addition, the Purchaser shall be responsible for any fees and
expenses (including filing fees and fees and expenses of counsel) incurred in
connection with making the filings and notifications required by the HSR Act,
and the reimbursement set forth in the prior sentence shall not apply to any
such fees and expenses.

 

6.2              Amendment; Waiver. No amendment or waiver of any provision of
this Agreement will be effective with respect to any party unless made in
writing and signed by an officer of a duly authorized representative of such
party. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The conditions to each party’s
obligation to consummate the Closing are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable law. No waiver of any party to this Agreement will be effective
unless it is in a writing signed by a duly authorized officer of the waiving
party that makes express reference to the provision or provisions subject to
such waiver. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.

 

29

 

 

6.3              Counterparts; Electronic Transmission. For the convenience of
the parties hereto, this Agreement may be executed in any number of separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement. Executed
signature pages to this Agreement may be delivered by facsimile or other means
of electronic transmission and such facsimiles or other means of electronic
transmission will be deemed as sufficient as if actual signature pages had been
delivered.

 

6.4              Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of Delaware. The parties hereby
irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the state and federal courts located in the State of Delaware for any
actions, suits or proceedings arising out of or relating to this Agreement and
the transactions contemplated hereby. The parties hereby irrevocably and
unconditionally consent to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such action, suit or proceeding
and irrevocably waive, to the fullest extent permitted by law, any objection
that they may now or hereafter have to the laying of the venue of any such
action, suit or proceeding in any such court or that any such action, suit or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such action, suit or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 6.6 shall be deemed
effective service of process on such party.

 

6.5              WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

6.6              Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the other will be in writing and will be
deemed to have been duly given (a) on the date of delivery if delivered
personally or by telecopy, facsimile or electronic mail (so long as such
transmission does not generate an error message or notice of non-delivery), (b)
on the first business day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the third business day following
the date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall be delivered as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice.

 

30

 

 

If to Purchaser:

 

c/o One Equity Partners

510 Madison Avenue, 19th Floor

New York, NY 10022

Attn: Gregory A. Belinfanti, Brad Coppens, Inna Etinberg, Jessica Marion and
Dora Stojka
Email:    gregory.belinfanti@oneequity.com

brad.coppens@oneequity.com

inna.etinberg@oneequity.com

jessica.marion@oneequity.com

dora.stojka@oneequity.com

 

with a copy to:

 

Kirkland & Ellis LLP 

300 North LaSalle Street

Chicago, Illinois 60654

Attn:      Jeremy S. Liss, P.C.

Ross M. Leff, P.C.

Jeffrey P. Swatzell

Email:     jeremy.liss@kirkland.com

ross.leff@kirkland.com

jeffrey.swatzell@kirkland.com

 

If to the Company:

 

AdaptHealth Corp.

220 West Germantown Pike Suite 250

Plymouth Meeting, PA 19462

Attention: General Counsel

E-mail: cjoyce@adapthealth.com

 

with a copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Attention: Steven J. Gartner

   Michael E. Brandt

   Danielle Scalzo

E-mail: sgartner@willkie.com

     mbrandt@willkie.com

         dscalzo@willkie.com

Facsimile: 212-728-9962

 

6.7              Entire Agreement. This Agreement (including the Schedules
hereto and the documents and instruments referred to in this Agreement),
together with the Confidentiality Agreement, constitutes the entire agreement
among the parties and supersedes all other prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof and transactions contemplated hereby.

 

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6.8              Assignment. Neither this Agreement, nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other party; provided, however, that the Purchaser may, without
the prior written consent of the other party, assign its rights, interests and
obligations under this Agreement, in whole or in part, either pursuant to a
Permitted Transfer or to an Affiliate, and, in each case, in the event of such
assignment, the assignee shall agree in writing to be bound by the provisions of
this Agreement, including the rights, interests and obligations so assigned;
provided that, in each case, no such assignment will relieve the Purchaser of
its obligations hereunder.

 

6.9              Interpretation; Other Definitions. Wherever required by the
context of this Agreement, the singular shall include the plural and vice versa,
and the masculine gender shall include the feminine and neuter genders and vice
versa, and references to any agreement, document or instrument shall be deemed
to refer to such agreement, document or instrument as amended, supplemented or
modified from time to time. All article, section, paragraph or clause references
not attributed to a particular document shall be references to such parts of
this Agreement, and all exhibit, annex, letter and schedule references not
attributed to a particular document shall be references to such exhibits,
annexes, letters and schedules to this Agreement. In addition, the following
terms are ascribed the following meanings:

 

(a)               the word “or” is not exclusive;

 

(b)               the words “including,” “includes,” “included” and “include”
are deemed to be followed by the words “without limitation”;

 

(c)               the terms “herein,” “hereof” and “hereunder” and other words
of similar import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision;

 

(d)               “Beneficial Owner,” “Beneficially Own” or “Beneficial
Ownership” has the meaning assigned to such term in Rule 13d-3 under the
Exchange Act, and a person’s Beneficial Ownership of securities shall be
calculated in accordance with the provisions of such Rule (in each case,
irrespective of whether or not such Rule is actually applicable in such
circumstance).

 

(e)               the term “business day” means any day except Saturday, Sunday
and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York or State of Pennsylvania generally are
authorized or required by law or other governmental action to close; and

 

(f)                the term “person” has the meaning given to it in Section
3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act.

 

(g)               the term “made available” means that the information referred
to has been posted in the Merrill Queen “data room” established by the Company
or its representatives or in publicly available SEC Reports filed by the Company
with the SEC on or following the Reference Date at least two days prior to the
date hereof, in each case.

 

32

 

 

(h)               “Additional Transaction” means, in each case involving any
person other than the Purchaser or one of its Affiliates, any (i) sale, lease,
assignment, exchange or other transfer or disposition directly or indirectly by
merger, consolidation, business combination, share exchange, joint venture or
otherwise of assets of the Company or any Subsidiary; (ii) issuance, sale or
other disposition, directly or indirectly (including, without limitation, by way
of merger, consolidation, business combination, share exchange, joint venture or
any similar transaction), of securities (or options, rights, or warrants to
purchase, or securities convertible into or exchangeable for, such securities),
including without limitation capital stock, partnership interests, membership
interests or other instruments directly or indirectly convertible into,
exchangeable or exercisable for, or the value of which is determined with
reference to, capital stock, partnership interests or membership interests
(“Equity Securities”) of the Company or any of its Subsidiaries; (iii) tender
offer or exchange offer as defined pursuant to the Exchange Act that, if
consummated, would result in any person beneficially owning any class or series
(or the voting power of any class or series) of Equity Securities of the Company
or any of its Subsidiaries or any other transaction in which any person shall
acquire beneficial ownership or the right to acquire beneficial ownership, of
any class or series (or the voting power of any class or series) of Equity
Securities; or (iv) combination of the foregoing (in each case, other than the
arrangements contemplated hereunder).

 

(i)                 “Affiliate” means, with respect to any specified person, any
other person that, at the time of determination, directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with such specified person.

 

(j)                 “as-converted basis” means, for purposes of computing
beneficial ownership, such number of shares of Common Stock calculated on a
basis assuming all shares of Series A Preferred Stock had been converted by the
holders thereof pursuant to Section 6 of the Certificate of Designations
classifying the Series A Preferred Stock, but disregarding any restrictions or
limitations upon the conversion of such Series Preferred Stock, including those
limitations specified in Section 8(f) thereof.

 

(k)               “Amended and Restated Registration Rights Agreement” means the
Amended and Restated Registration Rights Agreement attached hereto as Annex II;
provided, that the Company and the holders of a majority of Registrable
Securities (as defined in the form of Amended and Restated Registration Rights
Agreement) shall be entitled to make amendments to the form of Amended and
Restated Registration Rights Agreement to the extent that such amendments could
be made following the effectiveness thereof after giving effect to the
acquisition by Purchaser of the Shares contemplated hereby.

 

(l)                 “Back Leverage” means the (1) incurrence of indebtedness by
the Purchaser (or an Affiliate thereof) to (A) finance a portion of its purchase
of the Shares, (B) finance a return of capital with respect to its investment in
the Shares, or (C) refinance or replace indebtedness described in this clause
(1), and (2) granting of Liens by the Purchaser to secure payment of such
indebtedness, including on Shares held by the Purchaser (or each Affiliate of
the Purchaser to which Shares are transferred pursuant to Section 5.3(b)(1)).

 

(m)             “Common Stock” means the common stock, par value $0.0001 per
share, of the Company.

 

33

 

 

(n)               “Company Material Adverse Effect” means any change, effect,
event, occurrence, condition, state of facts or development that, either alone
or in combination, has had, or would be reasonably expected to have, (a) a
materially adverse effect on the business, operations, assets, liabilities or
condition (financial or otherwise) or results of operations of the Company,
taken as a whole; provided, however, that none of the following shall constitute
or be deemed to contribute to a Company Material Adverse Effect, or shall
otherwise be taken into account in determining whether a Company Material
Adverse Effect has occurred or would be reasonably likely to occur: any adverse
effect arising out of, resulting from or attributable to (i) (A) the economy
generally or credit, currency, oil, financial, banking, securities, capital
markets or financial markets generally (including any increased cost, or
decreased availability, of capital or pricing or terms related to any financing
for the transactions contemplated hereunder or any disruption thereof and any
decline in the price of any security, commodity or market index), including
changes in interest or exchange rates, and (B) changes or conditions generally
affecting the industry or markets in which the Company participates, (ii) any
changes or prospective changes in applicable Law, GAAP, or the enforcement or
interpretation thereof after the date hereof or any action required to be taken
under any Law by which the Company or its Subsidiaries (or any of their
respective assets or properties) is bound, (iii) any international or national
political, regulatory or social conditions, hostilities, cyber-attack, act of
war, sabotage, terrorism, declaration of national emergency or military actions,
or any escalation or worsening of any such hostilities, cyber-attack, act of
war, sabotage, terrorism, declaration of national emergency or military actions,
(iv) the failure of the Company to meet or achieve the results set forth in any
internal budget, plan, projection or forecast; provided that this clause (iv)
will not prevent a determination that any change, effect or other cause
underlying such failure to meet budgets, plans, projections or forecasts has
resulted in or contributed to a Company Material Adverse Effect, (v) actions of
the Company expressly required by the terms of this Agreement or taken with the
prior written consent of the Purchaser, (vi) the negotiation or execution of
this Agreement or any other Ancillary Document or announcement, pendency or
consummation of this Agreement or the transactions contemplated hereby or
thereby or the identity, nature or ownership of the Purchaser, including the
impact thereof on the relationships, contractual or otherwise, of the Company or
any of its Subsidiaries with any of its or their business relations or
employees, (vii) epidemics, pandemics or disease or virus outbreaks (including
the COVID-19 virus) or (viii) hurricanes, earthquakes, tsunamis, tornados,
mudslides, floods or other natural disasters, weather conditions, explosions or
fires or other force majeure events or acts of God, whether or not caused by any
person, or any national or international calamity or crisis; provided that the
matters described in clauses (i), (iii) and (viii) shall be included and taken
into account in the term “Company Material Adverse Effect” to the extent any
such matter has a disproportionate adverse impact on the business, operations,
assets, liabilities or condition (financial or otherwise) or results of
operations of the Company, taken as a whole, relative to the other participants
in the industries in which they operate; and (b) a material impairment on or
material delay in the ability of the Company to perform its material obligations
under this Agreement or to consummate the transactions contemplated by this
Agreement.

 

(o)               “Confidentiality Agreement” means that certain Non-Disclosure
Agreement, dated as of February 27, 2020, by and between the Company and the
Purchaser.

 

(p)               “Contract” means any contract, agreement, instrument,
undertaking, indenture, commitment, loan, license, settlement, consent, note or
other legally binding obligation (whether or not in writing).

 

(q)               “Conversion Price” has the meaning set forth in the
Certificate of Designations.

 

(r)                “Conversion Rate” has the meaning set forth in the
Certificate of Designations.

 

34

 

 

(s)                “Derivative Instruments” means any and all derivative
securities (as defined under Rule 16a-1 under the Exchange Act) that increase in
value as the value of any Equity Securities of the Company increases, including
a long convertible security, a long call option and a short put option position,
in each case, regardless of whether (i) such derivative security conveys any
voting rights in any Equity Security, (ii) such derivative security is required
to be, or is capable of being, settled through delivery of any Equity Security
or (iii) other transactions that hedge the value of such derivative security.

 

(t)                 “Effect” means any change, event, effect, development or
circumstance.

 

(u)               “Encumbrance” means any mortgage, commitment, transfer
restriction, deed of trust, pledge, option, power of sale, retention of title,
right of pre-emption, right of first refusal, executorial attachment,
hypothecation, security interest, encumbrance, claim, lien or charge of any
kind, or an agreement, arrangement or obligation to create any of the foregoing.

 

(v)               “Equity Securities” means any and all (i) shares, interests,
participations or other equivalents (however designated) of capital stock or
other voting securities of a corporation, any and all equivalent or analogous
ownership (or profit) or voting interests in a person (other than a
corporation), (ii) securities convertible into or exchangeable for shares,
interests, participations or other equivalents (however designated) of capital
stock or voting securities of a corporation, and securities convertible into or
exchangeable for any equivalent or analogous ownership (or profit) or voting
interests in a person (other than a corporation), and (iii) any and all
warrants, rights or options to purchase any of the foregoing, whether voting or
nonvoting, and, in each case, whether or not such shares, interests,
participations, equivalents, securities, warrants, options, rights or other
interests are authorized or otherwise existing on any date of determination;
provided that Equity Securities shall not include preferred stock that are not
convertible or exchangeable for common stock in a corporation.

 

(w)             “Fundamental Representations” means the representations and
warranties set forth in Sections 2.1(a)(1), (b)(1), (c), (d) and (f).

 

(x)               “Governmental Entity” means any court, administrative or
regulatory agency or commission or other governmental or arbitral body or
authority or instrumentality, including any state-controlled or owned
corporation or enterprise, in each case whether federal, state, local or
foreign, and any applicable industry self-regulatory organization.

 

(y)               “HSR Act” means the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations promulgated
thereunder.

 

(z)               “Knowledge of the Company” means the actual knowledge after
reasonable inquiry of one or more of Luke McGee, Joshua Parnes, Christopher
Joyce, Wendy Russalesi, Gregg Holst, John Gentile, Shaw Rietkerk or Andy Palan.

 

(aa)            “Law” means any federal, state, local or foreign law, statute or
ordinance, or any rule, code, treaty, constitution, regulation, judgment, order,
writ, injunction, ruling, decree, administrative interpretation or agency
requirement of any Governmental Entity.

 

35

 

 

(bb)           “Lien” means any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, claim, escheat, encroachment, lien, charge of
any kind, option, easement, purchase right, right of first refusal, right of
pre-emption, conditional sale agreement, covenant, condition or other similar
restriction (including restrictions on transfer) or any agreement to create any
of the foregoing.

 

(cc)            “Outside Date” means the date that is 150 days after the date
hereof.

 

(dd)           “Purchased Common Shares” means a number of shares of Class A
Common Stock equal to the lesser of (i) the Stock Consideration Amount and (ii)
the maximum number of shares of Common Stock as are issuable by the Company
without obtaining prior shareholder approval pursuant to Nasdaq listing rule
5635 (assuming that the shares of Common Stock issuable in connection with the
Target Acquisition are issued at the Closing without any reduction therefrom as
a result of Nasdaq listing rule 5635) (which, under this clause (ii) shall not
be less than 9,911,932 shares of Class A Common Stock).

 

(ee)            “Purchased Preferred Shares” means a number of shares of Series
A Preferred Stock equal to the quotient obtained by dividing (i) (x) the Stock
Consideration Amount, less (y) the number of Purchased Common Shares issued
hereunder, divided by (ii) the Conversion Rate.

 

(ff)              “Purchase Price Per Common Share” means $13.75.

 

(gg)           “Purchase Price Per Preferred Share” means $1,000.

 

(hh)           “Registration Rights Agreement” means that certain Registration
Rights Agreement, dated as of November 8, 2019, by and among AdaptHealth
Holdings LLC and certain other parties thereto.

 

(ii)              “Stock Consideration Amount” means 13,818,182 (subject to
reduction as set forth in Section 1.1(a)).

 

(jj)              “Subsidiary” means, with respect to any person, (a) any
corporation of which a majority of the total voting power of shares of capital
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such person or one or more of the other
Subsidiaries of such person or a combination thereof, or (b) any partnership,
limited liability company, association or other business entity of which a
majority of the partnership, limited liability company or other similar
ownership interest is at the time owned or controlled, directly or indirectly,
by such person or one or more Subsidiaries of such person or a combination
thereof. For purposes of this definition, a person is deemed to have a majority
ownership interest in a partnership, limited liability company, association or
other business entity if such person is allocated a majority of the gains or
losses of such partnership, limited liability company, association or other
business entity or is or controls the managing member or general partner or
similar position of such partnership, limited liability company, association or
other business entity.

 

(kk)           “Target Acquisition” means the acquisition by the Company or one
of its Subsidiaries of Solara Holdings, LLC.

 

36

 

 

(ll)              “Target Financial Statements” means for purposes of Section
3.9, the 2019 Audited Financials (as defined in the Stock Purchase Agreement as
in effect on the date hereof).

 

(mm)          “Transfer” means (i) any direct or indirect sale, lease,
assignment, Encumbrance, disposition or other transfer (by operation of law or
otherwise), either voluntary or involuntary, or entry into any Contract, option
or other arrangement or understanding with respect to any sale, lease,
assignment, Encumbrance, disposition or other transfer (by operation of law or
otherwise), of any Equity Security or (ii) to enter into any Derivative
Instrument, swap or any other Contract, agreement, transaction or series of
transactions that hedges or transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of any Equity Security,
whether any such Derivative Instrument, swap, Contract, agreement, transaction
or series of transactions is to be settled by delivery of securities, in cash or
otherwise; provided, however, that, notwithstanding anything to the contrary in
this Agreement, a Transfer shall not include the conversion of one or more
shares of Series A Preferred Stock into shares of Class A Common Stock pursuant
to the Certificate of Designations.

 

(nn)           “Unaffiliated Shareholders” means the shareholders of the
Company, other than (1) the Purchaser, (2) any Affiliates or representatives of
the Purchaser or any person acting for or on behalf of the Purchaser or (3) any
shareholder that is a member of a “group” (within the meaning of Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder) with
the Purchaser.

 

(oo)           “Voting Agreements” means those certain Voting Agreements, dated
as of the date hereof, by and among the Purchaser and each of the Voting
Parties.

 

6.10          Captions. The article, section, paragraph and clause captions
herein are for convenience of reference only, do not constitute part of this
Agreement and will not be deemed to limit or otherwise affect any of the
provisions hereof.

 

6.11          Severability. If any provision of this Agreement or the
application thereof to any person (including the officers and directors of the
parties hereto) or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to persons or circumstances other
than those as to which it has been held invalid or unenforceable, will remain in
full force and effect and shall in no way be affected, impaired or invalidated
thereby, so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.

 

6.12          No Third Party Beneficiaries. Nothing contained in this Agreement,
expressed or implied, is intended to confer upon any person other than the
parties hereto (and their permitted assigns), any benefit, right or remedies.

 

6.13          Public Announcements. Subject to each party’s disclosure
obligations imposed by law or regulation or the rules of any stock exchange upon
which its securities are listed, each of the parties hereto will cooperate with
each other in the development and distribution of all news releases and other
public information disclosures with respect to this Agreement and any of the
transactions contemplated by this Agreement, and neither the Company nor the
Purchaser will make any such news release or public disclosure without first
consulting with the other, and, in each case, also receiving the other’s consent
(which shall not be unreasonably withheld, conditioned or delayed) and each
party shall coordinate with the party whose consent is required with respect to
any such news release or public disclosure.

 

37

 

 

6.14          Specific Performance. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that, without the necessity of posting bond or other
undertaking, the parties shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedies to which they are entitled
at law or equity, and in the event that any action or suit is brought in equity
to enforce the provisions of this Agreement, and no party will allege, and each
party hereby waives, the defense or counterclaim that there is an adequate
remedy at law.

 

6.15          Termination. Prior to the Closing, this Agreement may only be
terminated:

 

(a)               by mutual written agreement of the Company and the Purchaser;

 

(b)               by the Company or the Purchaser, upon written notice to the
other party, if the Closing has not occurred by the Outside Date; provided,
however that the right to terminate this Agreement pursuant to this Section
6.15(b) shall not be available to any party whose failure to materially comply
with any of its obligations under this Agreement shall have been the cause of,
or shall have resulted in, the failure of the Closing to occur on or prior to
such date;

 

(c)               by the Company if (i) the Purchaser shall have breached any
representation, warranty, covenant or agreement of the Purchaser set forth in
this Agreement, (ii) such breach or misrepresentation is not cured or capable of
being cured by the Outside Date, and (iii) such breach or misrepresentation
would cause any of the conditions set forth in Section 1.3(c)(1) or 1.3(c)(2)
not to be satisfied; provided that the Company is not then in breach of this
Agreement so as to cause the conditions to the Closing set forth in either
Section 1.3(a) or Section 1.3(b) to not (in the absence of a waiver) be
satisfied as of the Closing Date; or

 

(d)               by the Purchaser if (i) the Company shall have breached any
representation, warranty, covenant or agreement of the Company set forth in this
Agreement, (ii) such breach or misrepresentation is not cured or capable of
being cured by the Outside Date, and (iii) such breach or misrepresentation
would cause any of the conditions set forth in Section 1.3(b)(1) or 1.3(b)(2)
not to be satisfied; provided that the Purchaser is not then in breach of this
Agreement so as to cause the conditions to the Closing set forth in either
Section 1.3(a) or Section 1.3(c) to not (in the absence of a waiver) be
satisfied as of the Closing Date.

 

6.16          Effects of Termination. In the event of any termination of this
Agreement in accordance with Section 6.15, neither party (or any of its
Affiliates) shall have any liability or obligation to the other (or any of its
Affiliates) under or in respect of this Agreement, except to the extent of (A)
any liability arising from any willful and material breach by such party of its
obligations of this Agreement arising prior to such termination and (B) any
fraud or intentional or willful breach of this Agreement. In the event of any
such termination, this Agreement shall become void and have no effect, and the
transactions contemplated hereby shall be abandoned without further action by
the parties hereto, in each case, except (x) as set forth in the preceding
sentence and (y) that the provisions of Sections 3.1 (Confidentiality), 6.2 to
6.14 (Amendment; Waiver; Counterparts; Electronic Transmission; Governing Law;
Waiver of Jury Trial; Notices; Entire Agreement; Assignment; Interpretation;
Other Definitions; Captions; Severability; No Third Party Beneficiaries; Public
Announcements; and Specific Performance), this Section 6.16 (Effects of
Termination) and Section 6.17 (Non-Recourse) shall survive the termination of
this Agreement.

 

38

 

 

6.17          Non-Recourse. This Agreement may only be enforced against, and any
claims or causes of action that may be based upon, arise out of or relate to
this Agreement, or the negotiation, execution or performance of this Agreement
may only be made against the entities that are expressly identified as parties
hereto, including entities that become parties hereto after the date hereof,
including permitted assignees and successors, or that agree in writing for the
benefit of the Company to be bound by the terms of this Agreement applicable to
the Purchaser, and no former, current or future equityholders, controlling
persons, directors, officers, employees, agents or Affiliates of any party
hereto or any former, current or future equityholder, controlling person,
director, officer, employee, general or limited partner, member, manager,
advisor, agent or Affiliate of any of the foregoing (each, a “Non-Recourse
Party”) shall have any liability for any obligations or liabilities of the
parties to this Agreement or for any claim (whether in tort, contract or
otherwise) based on, in respect of, or by reason of, the transactions
contemplated hereby or in respect of any representations made or alleged to be
made in connection herewith. Without limiting the rights of any party against
the other parties hereto, in no event shall any party or any of its Affiliates
seek to enforce this Agreement against, make any claims for breach of this
Agreement against, or seek to recover monetary damages from, any Non-Recourse
Party.

 

39

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto as of the date first herein above
written.

 

  ADAPTHEALTH CORP.       By: /s/ Luke McGee     Name: Luke McGee       Title:
Authorized Signatory

 

[Signature Page to Investment Agreement]

 

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto as of the date first herein above
written.

 

  ADAPTHEALTH CORP.       By:       Name:     Title:

 

  OEP AHCO INVESTMENT HOLDINGS, LLC       By: /s/ Brad Coppens     Name: Brad
Coppens     Title: Authorized Officer

 

[Signature Page to Investment Agreement]

 

 

 

  ONE EQUITY PARTNERS VII, L.P.         By: OEP VII General Partner, L.P.   Its:
General Partner         By: OEP VII GP, L.L.C.   Its: General Partner        
By: /s/ Gregory Belinfanti   Name: Gregory Belinfanti   Its: Authorized
Signatory

 

[Signature Page to Investment Agreement]

 

  

 

 

Annex I

 

Form of Certificate of Designations

 

 

 

 

[Form of]

 

certificate of designation, preferences and rights

 

OF

 

series A CONVERTIBLE PREFERRED STOCK

 

PAR VALUE $0.0001

 

OF

 

ADAPTHEALTH CORP.

 

On [·], 2020, the Board of Directors of AdaptHealth Corp., a Delaware
corporation (the “Company”), adopted the following resolution designating and
creating, out of the authorized and unissued shares of preferred stock of the
Company, [●] authorized shares of a series of preferred stock of the Company
titled the “Series A Convertible Preferred Stock”:

 

RESOLVED that, pursuant to the Certificate of Incorporation, the By-Laws and
applicable law, a series of preferred stock of the Company titled the “Series A
Convertible Preferred Stock,” and having a par value of $0.0001 per share and an
initial number of authorized shares equal to [●], is hereby designated and
created out of the authorized and unissued shares of preferred stock of the
Company, which series has the rights, designations, preferences, voting powers
and other provisions set forth below.

 

Section 1.      Classification and Number of Shares. The shares of such series
of Preferred Stock shall be classified as “Series A Convertible Preferred Stock”
(the “Series A Preferred Stock”). The number of authorized shares constituting
the Series A Preferred Stock shall be [●]. That number from time to time may be
increased or decreased (but not below the number of shares of Series A Preferred
Stock then outstanding) by (a) further resolution duly adopted by the Board and
(b) the filing of a certificate of increase or decrease with the Secretary of
State of the State of Delaware. The Company shall not have the authority to
issue fractional shares of Series A Preferred Stock.

 

Section 2.      Ranking. The Series A Preferred Stock will rank, with respect to
rights on the distribution of assets on any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company:

 

(a)           on a parity basis with each other class or series of Capital Stock
of the Company now existing or hereafter authorized, classified or reclassified,
the terms of which expressly provide that such class or series ranks on a parity
basis with the Series A Preferred Stock as to rights on the distribution of
assets on any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company (such Capital Stock, “Parity Stock”);

 

 

 

 

(b)           junior to each other class or series of Capital Stock of the
Company now existing or hereafter authorized, classified or reclassified, the
terms of which expressly provide that such class or series ranks senior to the
Series A Preferred Stock as to rights on the distribution of assets on any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company (such Capital Stock, “Senior Stock”); and

 

(c)           senior to the Common Stock and each other class or series of
Capital Stock of the Company now existing or hereafter authorized, classified or
reclassified, other than Parity Stock and Senior Stock (such Capital Stock,
“Junior Stock”).

 

Section 3.      Definitions. As used herein with respect to Series A Preferred
Stock:

 

“Acquisition Agreement” means that certain Stock Purchase Agreement and
Agreement and Plan of Merger, dated as of May 25, 2020, by and among the
Company, AdaptHealth LLC, Eleanor Merger Sub LLC, Solara Holdings, LLC and LCP
Solara Blocker Seller, LLC, in its capacity as Blocker Seller and the
Representative (in each case as defined therein), as may be amended from time to
time.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, or is controlled by, or is under common control with, such
Person; provided, however, (a) that the Company and its Subsidiaries shall not
be deemed to be Affiliates of the Investor or any of its Affiliates and (b)
portfolio companies in which any Person or any of its Affiliates has an
investment shall not be deemed an Affiliate of such Person. For this purpose,
“control” (including, with its correlative meanings, “controlled by” and “under
common control with”) shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of management or policies of a Person,
whether through the ownership of securities or partnership or other ownership
interests, by contract or otherwise.

 

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 together with
such Person’s Affiliates is deemed to “beneficially own” within the meaning of
Rules 13d-3 and 13d-5 under the Exchange Act; provided, however, 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 within sixty (60)
days or thereafter (including assuming conversion of all Series A Preferred
Stock, if any, owned by such Person into Class A Common Stock).

 

“Board” means the Board of Directors of the Company or any committee thereof
duly authorized to act on behalf of such Board of Directors for the purposes in
question.

 

“Business Day” means any weekday that is not a day on which banking institutions
in New York, New York or the State of Pennsylvania are authorized or required by
law, regulation or executive order to be closed.

 

 -2- 

 

 

“By-Laws” means the Amended and Restated By Laws of the Company, as may be
amended from time to time.

 

“Capital Stock” means, with respect to any Person, any and all shares of,
interests in, rights to purchase, warrants to purchase, options for,
participations in or other equivalents of or interests in (however designated)
stock issued by such Person.

 

“Cash Payment” has the meaning set forth in Section 8(f).

 

“Cash Payment Deadline” has the meaning set forth in Section 8(f).

 

“Certificate of Designations” means this Certificate of Designation, Preferences
and Rights, as may be amended from time to time.

 

“Certificate of Incorporation” means the Second Amended and Restated Certificate
of Incorporation of the Company, as modified by the Certificate of Correction to
the Second Amended and Restated Certificate of Incorporation of the Company, and
as may be amended from time to time.

 

“Change of Control” means the occurrence, directly or indirectly, of one of the
following, whether in a single transaction or a series of transactions:

 

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), is or becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority
of the total voting power of the Voting Stock of the Company, other than as a
result of any such transaction in which the holders of securities that
represented 100% of the Voting Stock of the Company immediately prior to such
transaction are substantially the same as the holders of securities that
represent a majority of the total voting power of all classes of Voting Stock of
the surviving Person or any parent entity that wholly owns such surviving Person
immediately after such transaction; or

 

(b) the merger or consolidation of the Company with or into another Person or
the merger of another Person with or into the Company, or the sale, lease or
transfer of all or substantially all of the assets of the Company (determined on
a consolidated basis) to another Person, or any recapitalization,
reclassification or other transaction in which all or substantially all of the
Class A Common Stock is exchanged for or converted into cash, securities or
other property, other than (i) a transaction following which holders of
securities that represented 100% of the Voting Stock of the Company immediately
prior to such transaction own, directly or indirectly (in substantially the same
proportion to each other as immediately prior to such transaction, other than
changes in proportionality as a result of any cash/stock election provided under
the terms of the definitive agreement regarding such transaction), at least a
majority of the voting power of the Voting Stock of the surviving Person in such
merger or consolidation transaction immediately after such transaction or (ii) a
sale, lease or transfer to a Subsidiary or a Person that becomes a Subsidiary of
the Company.

 

“Class A Common Stock” means the Common Stock of the Company designated as Class
A common stock, $0.0001 par value per share.

 

 -3- 

 

 

“Class B Common Stock” means the Common Stock of the Company designated as Class
B common stock, $0.0001 par value per share.

 

“close of business” means 5:00 p.m. (New York City time).

 

“Closing Price” of the Class A Common Stock on any date of determination means
the closing sale price or, if no closing sale price is reported, the last
reported sale price of the shares of the Class A Common Stock on the NASDAQ on
such date. If the Class A Common Stock is not traded on the NASDAQ on any date
of determination, the Closing Price of the Class A Common Stock on such date of
determination means the closing sale price as reported in the composite
transactions for the principal United States securities exchange or automated
quotation system on which the Class A Common Stock is so listed or quoted, or,
if no closing sale price is reported, the last reported sale price on the
principal United States securities exchange or automated quotation system on
which the Class A Common Stock is so listed or quoted, or if the Class A Common
Stock is not so listed or quoted on a United States securities exchange or
automated quotation system, the last quoted bid price for the Class A Common
Stock in the over-the-counter market as reported by OTC Markets Group Inc. or
any similar organization, or, if that bid price is not available, the market
price of the Class A Common Stock on that date as mutually agreed between the
Company and the Holders of a majority of the Series A Preferred Stock or, in the
absence of such agreement, as determined by an Independent Financial Advisor
retained by the Company for such purpose.

 

“Common Stock” means (i) the common stock, $0.0001 par value per share, of the
Company, consisting of Class A Common Stock and Class B Common Stock and (ii)
any capital stock into which such common stock shall have been changed or any
share capital resulting from a reclassification of such common stock.

 

“Company” has the meaning set forth in the recitals above.

 

“Constituent Person” has the meaning set forth in Section 11(a)(iii).

 

“Conversion Date” has the meaning set forth in Section 8.

 

“Conversion Notice” has the meaning set forth in Section 8(a)(i).

 

“Conversion Price” means, for each share of Series A Preferred Stock, a dollar
amount equal to $1,000 divided by the Conversion Rate.

 

“Conversion Rate” means, for each share of Series A Preferred Stock, 72.727273
shares of Class A Common Stock, subject to adjustment as set forth herein.

 

“Current Market Price” per share of Class A Common Stock, as of any date of
determination, means the arithmetic average of the VWAP per share of Class A
Common Stock for each of the ten (10) consecutive full Trading Days ending on,
and including, the Trading Day immediately preceding such day, appropriately
adjusted to take into account the occurrence during such period of any event
described in Section 10.

 

“Default Cash Dividends” has the meaning set forth in Section 8(f).

 

 -4- 

 

 

“Distributed Property” has the meaning set forth in Section 10(a)(iii).

 

“Distribution Transaction” means any dividend or other distribution of equity
securities of a Subsidiary of the Company to holders of Class A Common Stock in
which such Person ceases to be a Subsidiary of the Company by reason of such
dividend or distribution of equity securities, whether by means of a spin-off,
split-off, redemption, reclassification, exchange, stock dividend, share
distribution, rights offering or similar transaction.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Exchange Property” has the meaning set forth in Section 11(a).

 

“Exchange Property Unit” has the meaning set forth in Section 11(a).

 

“Fair Market Value” means, with respect to any security or other property, the
fair market value of such security or other property as reasonably determined by
a majority of the Board acting in good faith, or as mutually agreed between the
Company and the Holders of a majority of the Series A Preferred Stock or, in the
absence of such agreement, (a) after consultation with an Independent Financial
Advisor, as to any security or other property with a Fair Market Value of less
than $25,000,000, or (b) otherwise using an Independent Financial Advisor to
provide a valuation opinion.

 

“Guarantor” means One Equity Partners VII, L.P.

 

“Holder” means a Person in whose name any Series A Preferred Stock is registered
in the Register.

 

“Independent Financial Advisor” means an accounting, appraisal, investment
banking firm or consultant of nationally recognized standing; provided, however,
that such firm or consultant shall not be an Affiliate of the Company and shall
be reasonably acceptable to the Holders of at least a majority of the shares of
Series A Preferred Stock outstanding at such time.

 

“Investment Agreement” means that certain Investment Agreement between the
Company,the Investor and the Guarantor dated as of May 25, 2020, as it may be
amended, supplemented or otherwise modified from time to time, with respect to
certain terms and conditions concerning, among other things, the rights of and
restrictions on the Holders.

 

“Investor” means OEP AHCO Investment Holdings, LLC.

 

“Issuance Date” means, with respect to any share of Series A Preferred Stock,
the date of issuance of such share.

 

“Junior Stock” has the meaning set forth in Section 2(c).

 

“Liquidation Preference” means, with respect to any share of Series A Preferred
Stock, as of any date, $0.0001 per share.

 

 -5- 

 

 

“Mandatory Conversion” has the meaning set forth in Section 7.

 

“Mandatory Conversion Date” has the meaning set forth in Section 7.

 

“Market Disruption Event” means, with respect to any date, the occurrence or
existence, during the one-half hour period ending at the scheduled close of
trading on such date on the principal U.S. national or regional securities
exchange or other market on which the Class A Common Stock is listed for trading
or trades (or for purposes of determining the VWAP per share of Class A Common
Stock, any period or periods aggregating one half-hour or longer during the
regular trading session on the relevant day), of any material suspension or
limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the relevant exchange or otherwise) in the Class A Common Stock or
in any options contracts or futures contracts relating to the Class A Common
Stock.

 

“NASDAQ” means the NASDAQ Stock Market (or its successor).

 

“Notice of Mandatory Conversion” has the meaning set forth in Section 7(b).

 

“Optional Conversion” has the meaning set forth in Section 6(a).

 

“Original Issuance Date” means the date of closing pursuant to the Investment
Agreement.

 

“Original Issue Price” means, with respect to any share of Series A Preferred
Stock, as of any date, $1,000.00 per share.

 

“Parity Stock” has the meaning set forth in Section 2(a).

 

“Participating Dividends” has the meaning set forth in Section 4(b).

 

“Participating Dividend Record Date” has the meaning set forth in Section 4(d).

 

“Person” means any individual, corporation, estate, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or any other entity.

 

“Preferred Stock” means the preferred stock, $0.0001 par value per share, of the
Company.

 

“Record Date” means, with respect to any dividend, distribution or other
transaction or event in which the holders of the Class A Common Stock have the
right to receive any cash, securities or other property or in which the Class A
Common Stock is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of holders of the
Class A Common Stock entitled to receive such cash, securities or other property
(whether such date is fixed by the Board or by statute, contract or otherwise).

 

“Register” means the securities register maintained in respect of the Series A
Preferred Stock by the Company, or, to the extent the Company has engaged a
transfer agent, such transfer agent.

 

 -6- 

 

 

“Reorganization Event” has the meaning set forth in Section 11(a)(iii).

 

“Requisite Stockholder Approval” means the stockholder approval contemplated by
NASDAQ listing rule 5635 (or its successor) with respect to the issuance of
shares of Common Stock upon conversion of the Series A Preferred Stock in excess
of the limitations imposed by such rule.

 

“Senior Stock” has the meaning set forth in Section 2(b).

 

“Series A Preferred Stock” has the meaning set forth in Section 1.

 

“Share Cap” means zero (0) shares of Common Stock.

 

A “Subsidiary” of any Person means any corporation, limited liability company,
partnership, association, trust or other entity of which securities or other
ownership interests representing more than 50% of the ordinary voting power (or,
in the case of a partnership, more than 50% of the general partnership
interests) are owned by such Person or one or more Subsidiaries of such Person
or by such Person and one or more Subsidiaries of such Person.

 

“Trading Day” means a day on which the NASDAQ is open for the transaction of
business and on which there has not occurred a Market Disruption Event.

 

“Trigger Event” has the meaning set forth in Section 10(a)(v).

 

“Voting Stock” means (a) with respect to the Company, the Common Stock and any
other Capital Stock of the Company having the right to vote generally in any
election of directors of the Board and (b) with respect to any other Person, all
Capital Stock of such Person having the right to vote generally in any election
of directors of the board of directors of such Person or other similar governing
body.

 

“VWAP” per share of Class A Common Stock on any Trading Day means the per share
volume-weighted average price as displayed under the heading Bloomberg VWAP on
Bloomberg (or, if Bloomberg ceases to publish such price, any successor service
reasonably chosen by the Company) page “AHCO <equity> AQR” (or its equivalent
successor if such page is not available) in respect of the period from the open
of trading on the relevant Trading Day until the close of trading on such
Trading Day (or if such volume-weighted average price is unavailable, the market
price of one (1) share of Class A Common Stock on such Trading Day determined,
using a volume-weighted average method, as mutually agreed between the Company
and the Holders of a majority of the Series A Preferred Stock or, in the absence
of such agreement, as determined by an Independent Financial Advisor retained by
the Company for such purpose).

 

Section 4.      Dividends. (a) Holders shall be entitled to receive dividends of
the type and in the amount determined as set forth in this Section 4.

 

(b)           Participating Dividends. Holders shall be entitled to participate
equally and ratably with the holders of shares of Class A Common Stock in all
cash dividends paid on the shares of Class A Common Stock as if immediately
prior to each Participating Dividend Record Date, all shares of Series A
Preferred Stock then outstanding were converted into shares of Class A Common
Stock in accordance with Section 6. Dividends payable pursuant to this Section
4(b) (the “Participating Dividends”) shall be payable on the same date that such
dividends are payable to holders of shares of Class A Common Stock, and no
dividends shall be payable to holders of shares of Class A Common Stock, unless
the full dividends contemplated by this Section 4(b) are paid substantially at
the same time to Holders.

 

 -7- 

 

 

(c)           [Reserved]

 

(d)           Record Date for Participating Dividends. Each Participating
Dividend shall be paid pro rata to the Holders of shares of Preferred Stock
entitled thereto. Each Participating Dividend shall be payable to the Holders of
Preferred Stock as they appear on the Register at the close of business on the
record date designated by the Board for such dividends (each such date, a
“Participating Dividend Record Date”) which shall be the same day as the record
date for the payment of dividends to the holders of shares of Class A Common
Stock.

 

(e)           Conversion Following a Participating Dividend Record Date. If the
Conversion Date for any shares of Series A Preferred Stock is prior to the close
of business on a Participating Dividend Record Date, the Holder of such shares
will not be entitled to any dividend in respect of such Participating Dividend
Record Date. If the Conversion Date for any shares of Series A Preferred Stock
is after the close of business on a Participating Dividend Record Date but prior
to the corresponding payment date for such dividend, the Holder of such shares
as of such Participating Dividend Record Date shall be entitled to receive such
dividend, notwithstanding the conversion of such shares prior to the applicable
dividend payment date.

 

Section 5.      Liquidation Rights. (a) Liquidation. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company, the Holders shall be entitled, out of assets legally available
therefor, before any distribution or payment out of the assets of the Company
may be made to or set aside for the holders of any Junior Stock and subject to
the rights of the holders of any Senior Stock or Parity Stock and the rights of
the Company’s existing and future creditors, to receive in full a liquidating
distribution in cash and in the amount per share of Series A Preferred Stock
equal to the greater of (i) the Liquidation Preference and (ii) the amount such
Holders would have received had such Holders, immediately prior to such
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company, converted such shares of Series A Preferred Stock into Class A
Common Stock pursuant to Section 6 (notwithstanding the Conversion Restriction).
Holders shall not be entitled to any further payments in the event of any such
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company other than what is expressly provided for in this Section 5 and
will have no right or claim to any of the Company’s remaining assets.

 

(b)           Partial Payment. If in connection with any distribution described
in Section 5(a) above, the assets of the Company or proceeds therefrom are not
sufficient to pay in full the aggregate liquidating distributions required to be
paid pursuant to Section 5(a) above to all Holders and the liquidating
distributions payable to all holders of any Parity Stock, the amounts
distributed to the Holders and to the holders of all such Parity Stock shall be
paid pro rata in accordance with the respective aggregate liquidating
distributions to which they would otherwise be entitled if all amounts payable
thereon were paid in full.

 

 -8- 

 

 

(c)           Merger, Consolidation and Sale of Assets Not Liquidation. For
purposes of this Section 5, the sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property and assets of the Company shall not be deemed
a voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Company, nor shall the merger, consolidation, statutory exchange or any
other business combination transaction of the Company into or with any other
Person or the merger, consolidation, statutory exchange or any other business
combination transaction of any other Person into or with the Company be deemed
to be a voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Company.

 

Section 6.      Right of the Holders to Convert.

 

(a)           Subject to the terms of Section 8(f), each Holder shall have the
right, at such Holder’s option, subject to the conversion procedures set forth
in Section 8, to convert (an “Optional Conversion”) each share of such Holder’s
Series A Preferred Stock at any time into (i) the number of shares of Class A
Common Stock equal to the quotient of (A) the Original Issue Price divided by
(B) the Conversion Price as of the applicable Conversion Date plus (ii) cash in
lieu of fractional shares as set out in Section 8(e). The right of Optional
Conversion may be exercised as to all or any portion of such Holder’s Series A
Preferred Stock from time to time; provided, however, that, in each case, no
right of Optional Conversion may be exercised by a Holder in respect of fewer
than 10,000 shares of Series A Preferred Stock (unless such conversion relates
to all shares of Series A Preferred Stock held by such Holder or all shares of
Series A Preferred Stock that may be converted in compliance with Section 8(f)).

 

(b)           The Company shall at all times reserve and keep available out of
its authorized and unissued Common Stock and Class A Common Stock, solely for
issuance upon the conversion of the Series A Preferred Stock, such number of
shares of Class A Common Stock as shall from time to time be issuable upon the
conversion of all the shares of Series A Preferred Stock pursuant to Section 6.
Any shares of Class A Common Stock issued upon conversion of Series A Preferred
Stock shall be duly authorized, validly issued, fully paid and nonassessable and
will not be subject to preemptive rights or subscription rights of any other
stockholder of the Company.

 

Section 7.      Mandatory Conversion by the Company. (a) Following the day upon
which the Requisite Stockholder Approval is obtained, the Company may elect to
convert up to 100% of the outstanding shares of Series A Preferred Stock (to the
extent not previously redeemed by the Company) into shares of Class A Common
Stock (the election to convert shares of Series A Preferred Stock pursuant to
this Section 7, a “Mandatory Conversion”, and the date selected by the Company
for any Mandatory Conversion pursuant to this Section 7, the “Mandatory
Conversion Date”). In the case of a Mandatory Conversion, each share of Series A
Preferred Stock then outstanding that is to be converted pursuant to such
Mandatory Conversion shall be converted into (A) the number of shares of Class A
Common Stock equal to the quotient of (1) the Original Issue Price with respect
to such share of Series A Preferred Stock as of the Mandatory Conversion Date
divided by (2) the Conversion Price of such share in effect as of the Mandatory
Conversion Date plus (B) cash in lieu of fractional shares as set out in Section
8(e).

 

 -9- 

 

 

(b)Notice of Mandatory Conversion. If the Company elects to effect a Mandatory
Conversion, the Company shall provide notice of a Mandatory Conversion to each
Holder (such notice, a “Notice of Mandatory Conversion”). The Mandatory
Conversion Date selected by the Company shall be no less than five (5) Business
Days and no more than twenty (20) Business Days after the date on which the
Company provides the Notice of Mandatory Conversion to the Holders. The Notice
of Mandatory Conversion shall state, as appropriate:

 

(i)           the number of shares of Series A Preferred Stock held by such
Holder that are subject to the Mandatory Conversion;

 

(ii)          the Mandatory Conversion Date selected by the Company; and

 

(iii)         the Conversion Rate as in effect on the Mandatory Conversion Date,
the number of shares of Class A Common Stock to be issued to such Holder upon
conversion of each share of Series A Preferred Stock held by such Holder and, if
applicable, the cash in lieu of fractional shares to be paid thereon.

 

SECTION 8. Conversion Procedures and Effect of Conversion. (a) Conversion
Procedure. A Holder must do each of the following in order to receive shares of
Class A Common Stock upon conversion of shares of Series A Preferred Stock
pursuant to this Section 8:

 

(i)           in the case of an Optional Conversion, complete and manually sign
the conversion notice in the form attached hereto as Exhibit I (the “Conversion
Notice”), and deliver such notice to the Company; provided, however, that a
Conversion Notice may be conditional on the completion of a Change of Control or
other corporate transaction as such Holder may specify;

 

(ii)          deliver to the Company the certificate or certificates (if any)
representing the shares of Series A Preferred Stock to be converted;

 

(iii)         if required, furnish appropriate endorsements and transfer
documents; and

 

(iv)         if required, pay any stock transfer, documentary, stamp or similar
taxes not payable by the Company pursuant to Section 17.

 

The foregoing clauses (ii), (iii) and (iv) shall be conditions to the issuance
of shares of Class A Common Stock to the Holders in the event of a Mandatory
Conversion pursuant to Section 7 (but, for the avoidance of doubt, not the
Mandatory Conversion of the shares of Series A Preferred Stock on the Mandatory
Conversion Date).

 

The “Conversion Date” means (A) with respect to an Optional Conversion pursuant
to Section 6(a), the date on which such Holder complies with the procedures in
this Section 8 (including the satisfaction of any conditions to conversion set
forth in the Conversion Notice) and (B) with respect to Mandatory Conversion
pursuant to Section 7, the Mandatory Conversion Date.

 

 -10- 

 

 

(b)               Effect of Conversion. Effective immediately prior to the close
of business on the Conversion Date applicable to any shares of Series A
Preferred Stock, Participating Dividends shall no longer accrue or be declared
on any such shares of Series A Preferred Stock, and on conversion, such shares
of Series A Preferred Stock shall cease to be outstanding.

 

(c)               Record Holder of Underlying Securities as of Conversion Date.
The Person or Persons entitled to receive the Class A Common Stock and, to the
extent applicable, cash on a Conversion Date shall be treated for all purposes
as the record holder(s) of such shares of Class A Common Stock and, to the
extent applicable, cash as of the close of business on such Conversion Date. As
promptly as practicable on or after the Conversion Date and compliance by the
applicable Holder with the relevant procedures contained in Section 8 (and in
any event no later than three (3) Trading Days thereafter), the Company shall
issue the number of whole shares of Class A Common Stock issuable upon
conversion (and deliver payment of cash in lieu of fractional shares as set out
in Section 8(e)). Such delivery of shares of Class A Common Stock shall be made,
at the option of the Company, in certificated form or by book-entry. Any such
certificate or certificates shall be delivered by the Company to the appropriate
Holder on a book-entry basis or by mailing certificates evidencing the shares to
the Holders at their respective addresses as set forth in the Conversion Notice
(in the case of an Optional Conversion) or in the records of the Company (in the
case of a Mandatory Conversion). In the event that a Holder shall not by written
notice designate the name in which shares of Class A Common Stock (and payments
of cash in lieu of fractional shares) to be delivered upon conversion of shares
of Series A Preferred Stock should be registered or paid, or the manner in which
such shares and cash should be delivered, the Company shall be entitled to
register and deliver such shares, and make such payment, in the name of the
Holder and in the manner shown on the records of the Company.

 

(d)               No Adjustment. No adjustment to shares of Series A Preferred
Stock being converted on a Conversion Date or to the shares of Class A Common
Stock deliverable to the Holders upon the conversion thereof shall be made in
respect of dividends or other distributions payable to holders of the Class A
Common Stock as of any date prior to the close of business on such Conversion
Date (it being understood that the foregoing shall not limit any Holder’s right
to receive Participating Dividends payable prior to such time or the operation
of Section 10(a) in respect of events occurring prior to such time). Until the
Conversion Date with respect to any share of Series A Preferred Stock has
occurred, such share of Series A Preferred Stock will remain outstanding and
will be entitled to all of the powers, designations, preferences and other
rights provided herein.

 

(e)               Fractional Shares. No fractional shares of Class A Common
Stock will be delivered to the Holders upon conversion. In lieu of fractional
shares otherwise issuable, the Holders will be entitled to receive, at the
Company’s sole discretion, either (i) an amount in cash equal to the fraction of
a share of Class A Common Stock multiplied by the Closing Price of the Class A
Common Stock on the Trading Day immediately preceding the applicable Conversion
Date or (ii) one (1) additional whole share of Class A Common Stock. To
determine whether the number of shares of Class A Common Stock to be delivered
to a Holder upon the conversion of such Holder’s shares of Series A Preferred
Stock will include a fractional share, such determination shall be based on the
aggregate number of shares of Series A Preferred Stock of such Holder that are
being converted on any single Conversion Date.

 

 -11- 

 

 

(f)                Restriction on Conversions.

 

(i)                 Limitation on Conversion. Notwithstanding anything in this
Certificate of Designations to the contrary, unless and until the Requisite
Stockholder Approval (to the extent and only to the extent required under the
listing rules of NASDAQ) is obtained, the Holders shall not have the right to
acquire shares of Common Stock issuable upon conversion of the Series A
Preferred Stock, and the Company shall not be required to issue shares of Common
Stock issuable upon conversion of the Series A Preferred Stock, in excess of the
Share Cap (the “Conversion Restriction”). Any purported delivery of shares of
Common Stock upon conversion of any Series A Preferred Stock will be void and
have no effect to the extent, and only to the extent, that such delivery would
result in issuance of shares of Common Stock in excess of the Share Cap in
violation of the listing rules of Nasdaq. Notwithstanding the foregoing, for any
conversion following the six-month anniversary of the Original Issuance Date, in
the case of a conversion pursuant to Section 6, Section 7 or this Section 8, the
Holder or the Company, as applicable, may request a conversion of a number of
shares of Series A Preferred Stock that would result in the issuance of shares
that, but for the Conversation Restriction, would exceed the Share Cap;
provided, that, in lieu of any shares of Class A Common Stock otherwise
deliverable upon conversion that would, but for the Conversion Restriction,
exceed the Share Cap, the Company shall instead deliver to the requisite Holder
an amount of cash per share of such Class A Common Stock equal to the VWAP per
share of Class A Common Stock on the Trading Day immediately preceding the
Conversion Date (such payment, a “Cash Payment”), payable within not more than
thirty (30) days following the applicable Conversion Date (such date, the “Cash
Payment Deadline”); provided, however, that the Holder may not request the
conversion of shares in excess of the Share Cap prior to the earlier to occur of
(A) the Restricted Period Termination Date (as such term is defined in the
Investment Agreement) and (B) if any, a Restricted Period Early Termination
Event (as such term is defined in the Investment Agreement) following which the
transfer restrictions in Section 5.3(a) of the Investment Agreement are not
applicable to 100% of the Prohibited Shares (as such term is defined in the
Investment Agreement) (following which the Holder may request conversion of
shares that would, but for the Conversion Restriction, exceed the Share Cap
which shall be treated in accordance with the forgoing proviso); provided,
further, that, for any conversion that would, but for the Conversation
Restriction, exceed the Share Cap that is in connection with a Change of
Control, in lieu of the purchase price per share payable in accordance with the
foregoing, the Company shall instead deliver to the requisite Holder, at the
same time as such consideration is delivered to the holders of Class A Common
Stock, the consideration received by the holders of Class A Common Stock in
respect thereof, and if such payment is in violation of the Nasdaq listing rules
applicable to the Company, the Company shall instead deliver to the Holder
converting shares in excess of the Share Cap that would be in violation of the
Nasdaq listing rules cash in an amount equal to the Fair Market Value of such
consideration.

 

(ii)              Covenant to Seek the Requisite Stockholder Approval. The
Company will use its reasonable best efforts to obtain the Requisite Stockholder
Approval, including by seeking such approval, if not previously obtained, at
each regular annual meeting of its stockholders occurring after the first
Company Stockholders’ Meeting (as such term is defined in the Investment
Agreement) and endorsing its approval in the related proxy materials. The
Company will promptly notify the Holders if the Requisite Stockholder Approval
is obtained.

 

 -12- 

 

 

(iii)            Cash Dividends Upon Default of Cash Payment Obligations. If the
Company fails to make any required Cash Payment by the required Cash Payment
Deadline on any share of Series A Preferred Stock, then the Holder thereof will
be entitled to receive cumulative cash dividends on each such share at a rate
per annum of 4.00% on the Original Issuance Price (such dividends, “Default Cash
Dividends”). Default Cash Dividends, if any, shall accumulate on a daily basis
from, and including, the Cash Payment Deadline to, but excluding, the date upon
which the required Cash Payment is made (whether or not there shall be earnings
or funds of the Company legally available for the payment of Default Cash
Dividends or the Company declares the payment of Default Cash Dividends).
Default Cash Dividends, if any, shall be payable quarterly in arrears on March
31, June 30, September 31 and December 31 of each year to the applicable Holder
as it appears on the Company’s Register at the close of business on the March
15, June 15, September 15 and December 15 preceding the applicable payment date.
Default Cash Dividends, if any, payable for any period less than a full
quarterly dividend period (based upon the number of days elapsed during the
period) shall be computed on the basis of a 360-day year consisting of twelve
30-day months.

 

Section 9.      Change of Control.

 

(a)               Change of Control Notice. On or before the twentieth (20th)
Business Day prior to the date on which the Company anticipates consummating a
Change of Control (or, if later, promptly after the Company discovers that a
Change of Control may occur), a written notice shall be sent by or on behalf of
the Company to the Holders as they appear in the records of the Company, which
notice shall set forth a description of the anticipated Change of Control and
contain the date on which the Change of Control is anticipated to be effected
(or, if applicable, the date on which a Schedule TO or other schedule, form or
report disclosing a Change of Control was filed).

 

(b)               Conversion Right. Prior to the consummation of any Change of
Control, each Holder shall be entitled, subject to Section 8(f), to exercise an
Optional Conversion in respect of any and all of its Series A Preferred Stock
prior to or conditioned upon such Change of Control.

 

Section 10.  Anti-Dilution Adjustments. (a) Adjustments. The Conversion Rate
will be subject to adjustment, without duplication, upon the occurrence of the
following events, except that the Company shall not make any adjustment to the
Conversion Rate if Holders of the Series A Preferred Stock participate, at the
same time and upon the same terms as holders of Class A Common Stock and solely
as a result of holding shares of Series A Preferred Stock, in any transaction
described in this Section 10, without having to convert their Series A Preferred
Stock, as if they held a number of shares of Class A Common Stock equal to the
Conversion Rate multiplied by the number of shares of Series A Preferred Stock
held by such Holders:

 

(i)                 The issuance of Class A Common Stock as a dividend or
distribution to all or substantially all holders of Class A Common Stock, or a
subdivision or combination (including, without limitation, a stock split or a
reverse stock split) of Class A Common Stock or a reclassification of Class A
Common Stock into a greater or lesser number of shares of Class A Common Stock,
in which event the Conversion Rate shall be adjusted based on the following
formula:

 

CR1 = CR0 x (OS1 / OS0)

 

where,

 

 -13- 

 

 

CR0 = the Conversion Rate in effect immediately prior to (i) the close of
business on (i) the Record Date for such dividend or distribution or (ii) the
effective date of such subdivision, combination or reclassification;

 

CR1 = the new Conversion Rate in effect immediately after (i) the close of
business on (i) the Record Date for such dividend or distribution or (ii) the
effective date of such subdivision, combination or reclassification;

 

OS0 = the number of shares of Class A Common Stock outstanding immediately prior
to the close of business on (i) the Record Date for such dividend or
distribution or (ii) the effective date of such subdivision, combination or
reclassification; and

 

OS1 = the number of shares of Class A Common Stock that would be outstanding
immediately after, and solely as a result of, the completion of such dividend,
distribution, subdivision, combination or reclassification.

 

Any adjustment made pursuant to this clause (i) shall be effective immediately
after the close of business on (i) the Record Date for such dividend or
distribution or (ii) the effective date of such subdivision, combination or
reclassification. If any such dividend, distribution, subdivision, combination
or reclassification is announced or declared but does not occur, the Conversion
Rate shall be readjusted, effective as of the date the Board announces that such
dividend, distribution, subdivision, combination or reclassification shall not
occur to the Conversion Rate that would then be in effect if such dividend,
distribution, subdivision, combination or reclassification had not been
declared.

 

(ii)              The dividend, distribution or other issuance to all or
substantially all holders of Class A Common Stock of rights (other than rights,
options or warrants distributed in connection with a stockholder rights plan (in
which event the provisions of Section 10(a)(v) shall apply)), options or
warrants entitling them to subscribe for or purchase shares of Class A Common
Stock for a period expiring forty-five (45) days or less from the date of
issuance thereof, at a price per share that is less than the Current Market
Price as of the Record Date for such issuance, in which event the Conversion
Rate will be increased based on the following formula:

 

CR1 = CR0 x [(OS0+X)] / (OS0+Y)

 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business
on the Record Date for such dividend, distribution or other issuance;

 

CR1 = the new Conversion Rate in effect immediately after the close of business
on the Record Date for such dividend, distribution or other issuance;

 

OS0 = the number of shares of Class A Common Stock outstanding immediately prior
to the close of business on the Record Date for such dividend, distribution or
other issuance;

 

 -14- 

 

 

X = the total number of shares of Class A Common Stock issuable pursuant to such
rights, options or warrants; and

 

Y = the number of shares of Class A Common Stock equal to the aggregate price
payable to exercise such rights, options or warrants divided by the Current
Market Price as of the Record Date for such dividend, distribution or other
issuance.

 

For purposes of this clause (ii), in determining whether any rights, options or
warrants entitle the holders to purchase the Class A Common Stock at a price per
share that is less than the Current Market Price as of the Record Date for such
dividend, distribution or issuance, there shall be taken into account any
consideration the Company receives for such rights, options or warrants, and any
amount payable on exercise thereof, with the value of such consideration, if
other than cash, to be the Fair Market Value thereof.

 

Any adjustment made pursuant to this clause (ii) shall become effective
immediately following the close of business on the Record Date for such
dividend, distribution or other issuance. In the event that such rights, options
or warrants are not so issued, the Conversion Rate shall be readjusted,
effective as of the date the Board publicly announced its decision not to issue
such rights, options or warrants to the Conversion Rate that would then be in
effect if such dividend, distribution or issuance had not been declared. To the
extent that such rights, options or warrants are not exercised prior to their
expiration or shares of Class A Common Stock are otherwise not delivered
pursuant to such rights, options or warrants upon the exercise of such rights,
options or warrants, the Conversion Rate shall be readjusted to the Conversion
Rate that would then be in effect had the adjustments made upon the dividend,
distribution or other issuance of such rights, options or warrants been made on
the basis of the delivery of only the number of shares of Class A Common Stock
actually delivered.

 

(iii)            The Company shall, by dividend or otherwise, distribute to all
or substantially all holders of its Class A Common Stock (other than for cash in
lieu of fractional shares), shares of any class of its Capital Stock, evidences
of its indebtedness, assets, other property or securities, but excluding (A)
dividends or distributions referred to in Section 10(a)(i) or Section 10(a)(ii)
hereof; (B) Distribution Transactions as to which Section 10(a)(iv) shall apply;
(C) dividends or distributions paid exclusively in cash; and (D) rights, options
or warrants distributed in connection with a stockholder rights plan as to which
Section 10(a)(v) shall apply (any of such shares of its Capital Stock,
indebtedness, assets or property that are not so excluded are hereinafter called
the “Distributed Property”), then, in each such case the Conversion Rate shall
be adjusted based on the following formula:

 

CR1 = CR0 x [SP0 / (SP0 - FMV)]

 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business
on the Record Date for such dividend or distribution;

 

CR1 = the new Conversion Rate in effect immediately after the close of business
on the Record Date for such dividend or distribution;

 

 -15- 

 

 

SP0 = the Current Market Price as of the Record Date for such dividend or
distribution; and

 

FMV = the Fair Market Value of the portion of Distributed Property distributed
with respect to each outstanding share of Class A Common Stock on the Record
Date for such dividend or distribution; provided, however, that, if FMV is equal
or greater than SP0, then in lieu of the foregoing adjustment, the Company shall
distribute to each holder of Series A Preferred Stock on the date the applicable
Distributed Property is distributed to holders of Class A Common Stock, but
without requiring such holder to convert its shares of Series A Preferred Stock,
in respect of each share of Series A Preferred Stock held by such holder, the
amount of Distributed Property such holder would have received had such holder
owned a number of shares of Class A Common Stock equal to the Conversion Rate on
the Record Date for such dividend or distribution

 

Any adjustment made pursuant to this clause (iii) shall be effective immediately
after the close of business on the Record Date for such dividend or
distribution. If any such dividend or distribution is declared but does not
occur, the Conversion Rate shall be readjusted, effective as of the date the
Board announces that such dividend or distribution shall not occur to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.

 

(iv)             The Company effects a Distribution Transaction, in which case
the Conversion Rate in effect immediately prior to the effective date of the
Distribution Transaction shall be increased based on the following formula:

 

CR1 = CR0 x [(FMV + MP0) / MP0]

 

where,

 

CR0 = the Conversion Rate in effect immediately prior to the close of business
on the effective date of the Distribution Transaction;

 

CR1 = the new Conversion Rate in effect immediately after the close of business
on the effective date of the Distribution Transaction;

 

FMV = the arithmetic average of the volume-weighted average prices for a share
of the capital stock or other interest distributed to holders of Class A Common
Stock on the principal United States securities exchange or automated quotation
system on which such capital stock or other interest trades, as reported by
Bloomberg (or, if Bloomberg ceases to publish such price, any successor service
chosen by the Company) in respect of the period from the open of trading on the
relevant Trading Day until the close of trading on such Trading Day (or if such
volume-weighted average price is unavailable, the market price of one (1) share
of such capital stock or other interest on such Trading Day determined, using a
volume-weighted average method, as mutually agreed between the Company and the
Holders of a majority of the Series A Preferred Stock or, in the absence of such
agreement, as determined by an Independent Financial Advisor retained for such
purpose by the Company), for each of the ten (10) consecutive full Trading Days
commencing with, and including, the effective date of the Distribution
Transaction; and

 

 -16- 

 

 

MP0 = the arithmetic average of the VWAP per share of Class A Common Stock for
each of the ten (10) consecutive full Trading Days commencing on, and including,
the effective date of the Distribution Transaction

 

Such adjustment shall become effective immediately following the close of
business on the effective date of the Distribution Transaction. If an adjustment
to the Conversion Rate is required under this Section 10(a)(iv), delivery of any
additional shares of Class A Common Stock that may be deliverable upon
conversion as a result of an adjustment required under this Section 10(a)(iv)
shall be delayed only to the extent necessary in order to complete the
calculations provided for in this Section 10(a)(iv).

 

(v)               If the Company has a stockholder rights plan in effect with
respect to the Class A Common Stock on any Conversion Date, upon conversion of
any shares of the Series A Preferred Stock, Holders of such shares will receive,
in addition to the applicable number of shares of Class A Common Stock, the
rights under such rights plan relating to such Class A Common Stock, unless,
prior to such Conversion Date, the rights have (i) become exercisable or (ii)
separated from the shares of Class A Common Stock (the first of such events to
occur, a “Trigger Event”), in which case, the Conversion Rate will be adjusted,
effective automatically at the time of such Trigger Event, as if the Company had
made a distribution of such rights to all holders of the Class A Common Stock as
described in Section 10(a)(ii) (without giving effect to the forty-five (45)-day
limit on the exercisability of rights, options or warrants ordinarily subject to
such Section 10(a)(ii)), subject to appropriate readjustment in the event of the
expiration, termination or redemption of such rights prior to the exercise,
deemed exercise or exchange thereof. Notwithstanding the foregoing, to the
extent any such stockholder rights are exchanged by the Company for shares of
Class A Common Stock or other property or securities, the Conversion Rate shall
be appropriately readjusted as if such stockholder rights had not been issued,
but the Company had instead issued such shares of Class A Common Stock or other
property or securities as a dividend or distribution of shares of Class A Common
Stock pursuant to Section 10(a)(i) or Section 10(a)(iii), as applicable.

 

To the extent that such rights are not exercised prior to their expiration,
termination or redemption, the Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect had the adjustments made upon the
occurrence of the Trigger Event been made on the basis of the issuance of, and
the receipt of the exercise price with respect to, only the number of shares of
Class A Common Stock actually issued pursuant to such rights.

 

Notwithstanding anything to the contrary in this Section 10(a)(v), no adjustment
shall be required to be made to the Conversion Rate with respect to any Holder
which is, or is an “affiliate” or “associate” of, an “acquiring person” under
such stockholder rights plan or with respect to any direct or indirect
transferee of such Holder who receives Series A Preferred Stock in such transfer
after the time such Holder becomes, or its affiliate or associate becomes, such
an “acquiring person.”

 

 -17- 

 

 

(b)               Calculation of Adjustments. All adjustments to the Conversion
Rate shall be calculated by the Company to the nearest 1/10,000th of one (1)
share of Class A Common Stock (or if there is not a nearest 1/10,000th of a
share, to the next lower 1/10,000th of a share). No adjustment to the Conversion
Rate will be required, unless such adjustment would require an increase or
decrease of at least one percent (1%) of the Conversion Rate; provided, however,
that any such adjustment that is not required to be made will be carried forward
and taken into account in any subsequent adjustment; provided, further, that any
such adjustment of less than one percent (1%) that has not been made will be
made upon any Conversion Date.

 

(c)               When No Adjustment Required. (i) Except as otherwise provided
in this Section 10, the Conversion Rate will not be adjusted for the issuance of
Class A Common Stock or any securities convertible into or exchangeable for
Class A Common Stock or carrying the right to purchase any of the foregoing, or
for the repurchase of Class A Common Stock.

 

(ii)              Except as otherwise provided in this Section 10, the
Conversion Rate will not be adjusted as a result of the issuance of, the
distribution of separate certificates representing, the exercise or redemption
of, or the termination or invalidation of, rights pursuant to any stockholder
rights plans.

 

(iii)            No adjustment to the Conversion Rate will be made:

 

(A)             upon the issuance of any shares of Class A Common Stock pursuant
to any present or future plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in Class A Common Stock under any plan in which purchases are
made at market prices on the date or dates of purchase, without discount, and
whether or not the Company bears the ordinary costs of administration and
operation of the plan, including brokerage commissions;

 

(B)              upon the issuance of any shares of Class A Common Stock or
options or rights to purchase such shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed by the
Company or any of its Subsidiaries or of any employee agreements or arrangements
or programs;

 

(C)              upon the issuance of any shares of Class A Common Stock
pursuant to any option, warrant, right, or exercisable, exchangeable or
convertible security;

 

(D)             for dividends or distributions declared or paid to holders of
Class A Common Stock in which Holders participate pursuant to Section 4(b); or

 

(E)              for a change solely in the par value of the Class A Common
Stock.

 

(d)               Successive Adjustments. After an adjustment to the Conversion
Rate under this Section 10, any subsequent event requiring an adjustment under
this Section 10 shall cause an adjustment to each such Conversion Rate as so
adjusted.

 

 -18- 

 

 

(e)               Multiple Adjustments. For the avoidance of doubt, if an event
occurs that would trigger an adjustment to the Conversion Rate pursuant to this
Section 10 under more than one subsection hereof, such event, to the extent
fully taken into account in a single adjustment, shall not result in multiple
adjustments hereunder; provided, however, that if more than one subsection of
this Section 10 is applicable to a single event, the subsection shall be applied
that produces the largest adjustment.

 

(f)                Tax Adjustments. The Company may, but shall not be required
to, make such increases in the Conversion Rate, in addition to those required by
this Section 10, as the Board considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of Company stock resulting from
any dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for income tax
purposes or for any other reason.

 

(g)               Notice of Adjustments. Whenever the Conversion Rate is
adjusted as provided under this Section 10, the Company shall as soon as
reasonably practicable following the occurrence of an event that requires such
adjustment (or if the Company is not aware of such occurrence, as soon as
reasonably practicable after becoming so aware) or the date the Company makes an
adjustment pursuant to Section 10(f):

 

(i)                 compute the adjusted applicable Conversion Rate in
accordance with this Section 10; and

 

(ii)              (A) in the event that the Company shall give notice or make a
public announcement to the holders of Class A Common Stock of any action of the
type described in Section 10 (but only if the action of the type described in
Section 10 would result in an adjustment to the Conversion Price or a change in
the type of securities or property to be delivered upon conversion of the Series
A Preferred Stock), the Company shall, at the time of such notice or
announcement, and in the case of any action that would require the fixing of a
record date, at least ten (10) days prior to such record date, give notice to
each Holder by mail, first-class postage prepaid, at the address appearing in
the Register, which notice shall specify the record date, if any, with respect
to any such action, the approximate date on which such action is to take place
and the facts with respect to such action as shall be reasonably necessary to
indicate the effect on the Conversion Price and the number, kind or class of
shares or other securities or property, which shall be deliverable upon
conversion or redemption of the Series A Preferred Stock or (B) in the event
that the Company does not give notice or make a public announcement as set forth
in subclause (A) of this clause (ii), the Company shall, as soon as practicable
following the occurrence of an event that requires an adjustment to the
Conversion Price pursuant to one or more provisions of Section 10 (or if the
Company is not aware of such occurrence, as soon as practicable after becoming
so aware), provide, or cause to be provided, a written notice to the Holders of
the occurrence of such event, in the same manner and with the same detail as the
notice set forth in subclause (A) of this clause (ii); and

 

(iii)            whenever the Conversion Price shall be adjusted pursuant to one
or more provisions of Section 10, the Company shall, as soon as practicable
following the determination of the revised Conversion Price, (A) file at the
principal office of the Company, a statement showing in reasonable detail the
facts requiring such adjustment, the Conversion Price that shall be in effect
after such adjustment and the method by which the adjustment to the Conversion
Price was determined and (B) cause a copy of such statement to be sent in the
manner set forth in subclause (A) of clause (ii) to each Holder.

 

 -19- 

 

 

 

Section 11.  Adjustment for Reorganization Events.

 

(a)           Reorganization Events. In the event of:

 

(i)                 any reclassification, statutory exchange, merger,
consolidation or other similar business combination of the Company with or into
another Person, in each case, pursuant to which at least a majority of the Class
A Common Stock is changed or converted into, or exchanged for, cash, securities
or other property of the Company or another Person;

 

(ii)              any sale, transfer, lease or conveyance to another Person of
all or substantially all the property and assets of the Company, in each case
pursuant to which the Class A Common Stock is converted into cash, securities or
other property; or

 

(iii)            any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition) or
reclassification, recapitalization or reorganization of the Class A Common Stock
into other securities;

 

(each of which is referred to as a “Reorganization Event” and the cash,
securities or other property into which the Class A Common Stock is changed,
converted or exchanged, the “Exchange Property” and the amount and kind of
Exchange Property that a holder of one (1) share of Class A Common Stock would
be entitled to receive on account of such Reorganization Event (without giving
effect to any arrangement not to issue or deliver a fractional portion of any
security or other property), an “Exchange Property Unit”), then, notwithstanding
anything to the contrary in this Certificate of Designations, from and after the
effective time of such Reorganization Event, without the consent of the Holders,
each share of Series A Preferred Stock will remain outstanding (unless converted
in accordance with Section 11(d)) and (I) the consideration due upon conversion
of any Series A Preferred Stock will be determined in the same manner as if each
reference to any number of shares of Class A Common Stock in Section 10 or in
this Section 11, or in any related definitions, were instead a reference to the
same number of Exchange Property Units; (II) for purposes of Sections 6 and 7,
each reference to any number of shares of Class A Common Stock in such Sections
(or in any related definitions) will instead be deemed to be a reference to the
same number of Exchange Property Units (and the terms of any conversion shall be
based upon the Original Issue Price at the time of such subsequent conversion);
and (III) other references to “Class A Common Stock” shall refer to the Exchange
Property with appropriate adjustment to preserve, to the greatest extent
possible (so long as there is no detrimental effect to the Company), the
economic and other rights in respect of the Series A Preferred Stock granted by
this Certificate of Designations and the Investment Agreement; provided,
however, that the foregoing shall not apply if such Holder is a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
(any such Person, a “Constituent Person”), or an Affiliate of a Constituent
Person, to the extent such Reorganization Event provides for different treatment
of Class A Common Stock held by such Persons. If the kind or amount of
securities, cash and other property receivable upon such Reorganization Event is
not the same for each share of Class A Common Stock held immediately prior to
such Reorganization Event by a Person (other than a Constituent Person or an
Affiliate thereof), then for the purpose of this Section 11(a), the kind and
amount of securities, cash and other property receivable upon conversion
following such Reorganization Event will be deemed to be the weighted average of
the types and amounts of consideration received by the holders of Class A Common
Stock.

 

 -20- 

 

 

(b)           Successive Reorganization Events. The above provisions of this
Section 11 shall similarly apply to successive Reorganization Events.

 

(c)           Reorganization Event Notice. The Company (or any successor) shall,
no less than twenty (20) Business Days prior to the anticipated effective date
of any Reorganization Event, provide written notice to the Holders of such
occurrence of such event and of the kind and amount of the cash, securities or
other property that constitutes the Exchange Property. Failure to deliver such
notice shall not affect the operation of this Section 11.

 

(d)           Reorganization Event Agreements. The Company shall not enter into
any agreement for a transaction constituting a Reorganization Event, unless (i)
such agreement provides for or does not interfere with or prevent (as
applicable) conversion of the Series A Preferred Stock into the Exchange
Property in a manner that is consistent with and gives effect to this Section
11, and (ii) to the extent that the Company is not the surviving corporation in
such Reorganization Event or will be dissolved in connection with such
Reorganization Event, proper provision shall be made in the agreements governing
such Reorganization Event for the conversion of the Series A Preferred Stock
into stock of the Person surviving such Reorganization Event or such other
continuing entity in such Reorganization Event.

 

(e)           Change of Control. For the sake of clarity, if a Reorganization
Event constitutes a Change of Control, then Section 9 shall take precedence over
this Section 11 to the extent there is any inconsistency between such sections.

 

Section 12.  Adverse Changes; Voting Rights.

 

(a)           So long as any shares of Series A Preferred Stock are outstanding,
in addition to any other vote required by applicable law, the Company may not
take any of the following actions (including by means of merger, consolidation,
reorganization, recapitalization or otherwise) without the prior affirmative
vote or written consent from the Holders of at least a majority of the
then-issued and outstanding shares of Series A Preferred Stock, voting as a
separate class: amend, alter, repeal or otherwise modify (whether by merger,
consolidation or otherwise) any provision of the Certificate of Incorporation
(including this Certificate of Designations) in a manner that would adversely
affect the powers, preferences, rights or privileges of the Series A Preferred
Stock.

 

(b)           Each Holder of Series A Preferred Stock will have one (1) vote per
share on any matter on which Holders of Series A Preferred Stock are entitled to
vote separately as a class, whether at a meeting or by written consent.

 

(c)           For the avoidance of doubt and notwithstanding anything to the
contrary in the Certificate of Incorporation or By-Laws, the Holders shall have
the exclusive consent and voting rights set forth in Section 12(a) and may take
action or consent to any action with respect to such rights without a meeting by
delivering a consent in writing or by electronic transmission of the Holders of
the Series A Preferred Stock entitled to cast not less than the minimum number
of votes that would be necessary to authorize, take or consent to such action at
a meeting of stockholders.

 

 -21- 

 

 

(d)           Except as otherwise provided herein or as otherwise required by
Delaware General Corporation Law, the Series A Preferred Stock shall have no
voting rights.

 

Section 13.  Status of Shares. Shares of Series A Preferred Stock that have been
issued and reacquired in any manner, whether by redemption, repurchase or
otherwise or upon any conversion of shares of Series A Preferred Stock to Class
A Common Stock, shall thereupon be retired and shall have the status of
authorized and unissued shares of preferred stock of the Company undesignated as
to series, and may be redesignated as any series of preferred stock of the
Company and reissued.

 

Section 14.  Term. Except as expressly provided in this Certificate of
Designations, the shares of Series A Preferred Stock shall not be redeemable or
otherwise mature and the term of the Series A Preferred Stock shall be
perpetual.

 

Section 15.  Creation of Capital Stock. The Board, without the vote of the
Holders, may authorize and issue additional shares of Capital Stock of the
Company.

 

Section 16.  No Sinking Fund. Shares of Series A Preferred Stock shall not be
subject to or entitled to the operation of a retirement or sinking fund.

 

Section 17.  Taxes. (a) Transfer Taxes. The Company shall pay any and all stock
transfer, documentary, stamp and similar taxes that may be payable in respect of
any issuance or delivery of shares of Series A Preferred Stock or shares of
Class A Common Stock or other securities issued on account of Series A Preferred
Stock pursuant hereto or certificates representing such shares or securities.
The Company shall not, however, be required to pay any such tax that may be
payable in respect of any transfer involved in the issuance or delivery of
shares of Series A Preferred Stock, shares of Class A Common Stock or other
securities in a name other than the name in which the shares of Series A
Preferred Stock with respect to which such shares or other securities are issued
or delivered were registered, or in respect of any payment to any Person other
than a payment to the registered holder thereof, and shall not be required to
make any such issuance, delivery or payment, unless and until the Person
otherwise entitled to such issuance, delivery or payment has paid to the Company
the amount of any such tax or has established, to the satisfaction of the
Company, that such tax has been paid or is not payable.

 

(b)           Withholding. All payments and distributions (or deemed
distributions) on the shares of Series A Preferred Stock (and on the shares of
Class A Common Stock received upon their conversion) shall be subject to
withholding and backup withholding of taxes to the extent required by law,
subject to applicable exemptions, and amounts withheld, if any, shall be treated
as received by the Holders. The Company shall use commercially reasonably
efforts to notify the Holders of any amounts expected to be deducted and
withheld pursuant to the preceding sentence reasonably prior to the relevant
payment date and the basis for such deduction and withholding and shall
reasonably cooperate with the applicable Holders to reduce or eliminate any such
deductions and withholdings to the extent permitted under applicable law.

 

 -22- 

 

 

(c)           Tax Treatment. The Series A Preferred Stock is intended to be
treated as common stock that does not constitute “preferred stock” within the
meaning of Section 305 of the Internal Revenue Code of 1986, as amended, and the
Company shall apply the provisions of this Certificate of Designations
consistent with such intention.

 

Section 18.  Notices. All notices referred to herein shall be in writing and,
unless otherwise specified herein, all notices hereunder shall be deemed to have
been given upon the earlier of receipt thereof or three (3) Business Days after
the mailing thereof if sent by registered or certified mail (unless first-class
mail shall be specifically permitted for such notice under the terms of this
Certificate of Designations) with postage prepaid, addressed, (i) if to the
Company, to its office at [·] (Attention: [·]), or to any transfer or other
agent of the Company designated to receive such notice as permitted by this
Certificate of Designations; (ii) if to any Holder, to such Holder at the
address of such Holder as listed in the Register; or (iii) to such other address
as the Company or any such Holder, as the case may be, shall have designated by
notice similarly given.

 

Section 19.  Facts Ascertainable. When the terms of this Certificate of
Designations refer to a specific agreement or other document to determine the
meaning or operation of a provision hereof, the Secretary of the Company shall
maintain a copy of such agreement or document at the principal executive offices
of the Company and a copy thereof shall be provided free of charge to any Holder
who makes a request therefor. The Secretary of the Company shall also maintain a
written record of the Issuance Date, the number of shares of Series A Preferred
Stock issued to a Holder and the date of each such issuance, and shall furnish
such written record free of charge to any Holder who makes a request therefor.

 

Section 20.  Waiver. Notwithstanding any provision in this Certificate of
Designations to the contrary, any provision contained herein and any right of
the Holders of Series A Preferred Stock granted hereunder may be waived as to
all shares of Series A Preferred Stock (and the Holders thereof) upon the
written consent of the Holders of a majority of the shares of Series A Preferred
Stock then outstanding.

 

Section 21.  Severability. If any term of the Series A Preferred Stock set forth
herein is invalid, unlawful or incapable of being enforced by reason of any rule
of law or public policy, all other terms set forth herein, which can be given
effect without the invalid, unlawful or unenforceable term will, nevertheless,
remain in full force and effect, and no term herein set forth will be deemed
dependent upon any other such term, unless so expressed herein.

 

Section 22.  No Other Rights. Except as expressly provided in any agreement
between a Holder and the Company, the Series A Convertible Preferred Stock will
have no rights, preferences or voting powers, except as provided in this
Certificate of Designations or the Certificate of Incorporation or as provided
by applicable law.

 

[Signature Page Follows]

 

 -23- 

 

 

This Certificate of Designations has been approved by the Board in the manner
and by the vote required by law.

 

The undersigned acknowledges this Certificate of Designations to be the
corporate act of the Company and, as to all matters or facts required to be
verified under oath, the undersigned acknowledges that, to the best of his or
her knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties for
perjury.

 

IN WITNESS WHEREOF, the Company has caused this Certificate of Designations to
be signed in its name and on its behalf by its _____________ and attested to by
its ____________ on this _____ day of [●], 2020.

 

ATTEST:   ADAPTHEALTH CORP.       Name:   By:   Title:     Name:       Title:

 

 -24- 

 

 

Exhibit I

ADAPTHEALTH CORP.CONVERSION NOTICE

 

Reference is made to the Certificate of Designation, Preferences and Rights of
the Series A Convertible Preferred Stock of AdaptHealth Corp. (the “Certificate
of Designations”). In accordance with and pursuant to the Certificate of
Designations, the undersigned hereby elects to convert the number of shares of
Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A
Preferred Stock”), of AdaptHealth Corp., a Delaware corporation (the “Company”),
indicated below into shares of Class A Common Stock, par value $0.0001 per
share, of the Company (the “Class A Common Stock”), [as of the date specified
below][[upon/immediately prior to], and subject to the occurrence of, [●]].

 

Date of Conversion (if applicable): ___________________________________________

Number of shares of Series A Preferred Stock to be converted:
_____________________

Share certificate no(s). of Series A Preferred Stock to be converted:
_________________

Tax ID Number (if applicable): ______________________________________________

Please confirm the following information:

 

Conversion Price: ________________________________________________________

Number of shares of Class A Common Stock to be issued:______________________

 

Please issue the shares of Class A Common Stock into which the shares of Series
A Preferred Stock are being converted in the following name and to the following
address:

 

Issue to: _________________________________________

Address: _________________________________________

Telephone Number: ________________________________

Email: __________________________________________

Authorization: ____________________________________

By: _____________________________________________

Title: ____________________________________________

Dated: ___________________________________________

Account Number (if electronic book entry transfer):
_____________________________

Transaction Code Number (if electronic book entry transfer):
______________________

Payment Instructions for cash payment in lieu of fractional shares:

 

 

 

 

Annex II

 

FORM OF AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

(See attached)

 

 

 

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is
dated as of [●], 2020, by and among (i) AdaptHealth Holdings LLC, a Delaware
limited liability company (the “Company”), (ii) AdaptHealth Corp., a Delaware
corporation (“Pubco”), (iii) each of the Persons listed on the Schedule of
Investors attached hereto as of the date hereof, and (iv) each of the other
Persons set forth from time to time on the Schedule of Investors who, at any
time, own securities of the Company or Pubco and enter into a Joinder to this
Agreement agreeing to be bound by the terms hereof (each Person identified in
the foregoing (iii) and (iv), an “Investor” and, collectively, the “Investors”).
This Agreement shall become effective as of the Closing pursuant to the
Investment Agreement (as defined below). Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in
Section 12 hereof.

 

WHEREAS, Pubco and certain of the Investors are parties to that certain
Registration Rights Agreement, dated as of November 8, 2019 (the “Prior
Agreement”);

 

WHEREAS, Pubco and [One Equity Partners VII, L.P.] (“OEP”) entered into an
Investment Agreement, dated as of [●], 2020 (the “Investment Agreement”),
pursuant to which, OEP agreed to purchase and Pubco agreed to sell [●] shares of
Series A Convertible Preferred Stock, par value $0.0001 per share (the “Series A
Preferred Stock”), of Pubco;

 

WHEREAS, Section 13(d) of the Prior Agreement provides that an amendment may
occur with the prior written consent of Pubco and the holders of a majority of
the Registrable Securities (as such term is used therein) then outstanding (the
“Requisite Holders”); and

 

WHEREAS, Pubco and the Requisite Holders desire to terminate the terms and
conditions of the Prior Agreement and to provide for the terms and conditions
included herein and to include the recipients of the other Registrable
Securities identified herein.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

1.             Resale Shelf Registration Rights.

 

(a)               Registration Statement Covering Resale of Registrable
Securities. Pubco filed with the Commission a Registration Statement on Form S-1
(“Form S-1”) for an offering to be made on a delayed or continuous basis
pursuant to Rule 415 of the Securities Act registering the resale from time to
time by the Investors of all of the Registrable Securities held by the Investors
(other than OEP) (the “Existing Resale Shelf Registration Statement”). Pubco
shall use reasonable best efforts to keep the Existing Resale Shelf Registration
Statement continuously effective and to be supplemented and amended to the
extent necessary to ensure that such Existing Resale Shelf Registration
Statement is available or, if not available, to ensure that another Registration
Statement is available (which replacement Registration Statement shall be deemed
an Existing Resale Shelf Registration Statement), under the Securities Act at
all times until such date as all Registrable Securities covered by the Existing
Resale Shelf Registration Statement, including the Registrable Securities held
by the OEP Parties to be added to the Existing Resale Shelf Registration
Statement in accordance with Section 1(b), 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”);
provided, that Pubco may amend the Existing Resale Shelf Registration Statement
in accordance with Section 1(b) and Section 1(c). The Existing Resale Shelf
Registration Statement shall contain a Prospectus in such form as to permit any
Investor to sell such Registrable Securities pursuant to Rule 415 under the
Securities Act (or any successor or similar provision adopted by the Commission
then in effect) at any time beginning on the effective date for such
Registration Statement (subject to lock-up restrictions provided in this
Agreement and in the Lock-Up Agreements), and shall provide that such
Registrable Securities may be sold pursuant to any method or combination of
methods legally available to, and requested by, the Investors; provided, that
Pubco may amend the Existing Resale Shelf Registration Statement in accordance
with Section 1(b) and Section 1(c).

 

 

 

 

(b)               Pubco shall use its reasonable best efforts to prepare and
file or cause to be prepared and filed with the SEC no later than the date that
is sixty (60) days prior to the Restricted Period Termination Date (as defined
in the Investment Agreement), either, at the sole discretion of Pubco, (x) a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 of the Securities Act (provided, that such Registration Statement
replaces and becomes the Existing Resale Shelf Registration Statement) or (y) an
amendment or prospectus supplement to the Existing Resale Shelf Registration
Statement registering the resale from time to time by the OEP Parties of all of
the Registrable Securities held by the OEP Parties (such Registration Statement,
as amended, the “OEP Resale Shelf Registration Statement”). The OEP Resale Shelf
Registration Statement shall be on Form S-3 or, if Form S-3 is not then
available to Pubco, on Form S-1 or such other appropriate form permitting
Registration of the Registrable Securities for resale by the OEP Parties. The
OEP Resale Shelf Registration Statement shall contain a Prospectus in such form
as to permit the OEP Parties to sell the Registrable Securities pursuant to Rule
415 under the Securities Act (or any successor or similar provision adopted by
the SEC then in effect) at any time beginning on the effective date for the OEP
Resale Shelf Registration Statement (subject to lock-up or transfer restrictions
pursuant to Section [5.3] of the Investment Agreement and in this Agreement),
and shall provide that the Registrable Securities held by the OEP Parties may be
sold pursuant to any method or combination of methods legally available to, and
requested by, the OEP Parties. Pubco shall use its reasonable best efforts to
cause the OEP Resale Shelf Registration Statement to be declared effective as
soon as possible after filing, but in no event later than the Restricted Period
Termination Date. Once effective, Pubco shall use its reasonable best efforts to
keep the OEP Resale Shelf Registration Statement continuously effective and in
compliance with the Securities Act and useable for the resale of the Registrable
Securities covered by the OEP Resale Shelf Registration Statement, including by
filing successive replacement or renewal OEP Resale Shelf Registration
Statements upon the expiration of the OEP Resale Shelf Registration Statement,
until such time as the OEP Parties no longer hold Registrable Securities. The
OEP Parties shall be entitled, at any time and from time to time when the OEP
Resale Shelf Registration Statement is effective (subject to lock-up or transfer
restrictions provided the Investment Agreement and in this Agreement), to sell
any or all of the Registrable Securities covered by the OEP Resale Shelf
Registration Statement. Notwithstanding the first sentence of this Section 1(b),
in the event of the occurrence of a Restricted Period Early Termination Event
(as defined in the Investment Agreement) prior to the date that is sixty (60)
days prior to the Restricted Period Termination Date, Pubco shall use reasonable
best efforts to file and cause to be declared effective the OEP Resale Shelf
Registration Statement for the Registrable Securities with respect to which the
lockup period has terminated within thirty (30) days following such termination.
Pubco shall pay all Registration Expenses in connection with the filing of the
OEP Resale Shelf Registration Statement.

 

 - 2 - 

 

 

(c)            If any OEP Party becomes a holder of Registrable Securities after
the OEP Resale Shelf Registration Statement is declared effective in accordance
with Section 1(b), and such OEP Party has executed a Joinder entitling it to the
benefits of this Agreement, then Pubco shall, as promptly as is reasonably
practicable following delivery of written notice to Pubco of such OEP Party
becoming a holder of Registrable Securities and requesting for its name to be
included as a selling securityholder in the Prospectus related to the OEP Resale
Shelf Registration Statement:

 

(i)               if required and permitted by applicable law, file with the
Commission a supplement to the related Prospectus or a post-effective amendment
to the OEP Resale Shelf Registration Statement so that such OEP Party is named
as a selling securityholder in the OEP Resale Shelf Registration Statement and
the related Prospectus in such a manner as to permit such OEP Party to deliver a
prospectus to purchasers of the Registrable Securities in accordance with
applicable law; provided, however, that the Company shall not be required to
file more than one post-effective amendment or a supplement to the related
prospectus for such purpose in any 45-day period;

 

(ii)              if, pursuant to Section 1(c)(i), Pubco shall have filed a
post-effective amendment to the OEP Resale Shelf Registration Statement that is
not automatically effective, use its reasonable best efforts to cause such
post-effective amendment to become effective under the Securities Act as
promptly as is reasonably practicable; and

 

(iii)             notify such OEP Party as promptly as is reasonably practicable
after the effectiveness of any post-effective amendment filed pursuant to
Section 1(c)(i).

 

(d)           Registrations effected pursuant to this Section 1 shall not be
counted as Demand Registrations effected pursuant to Section 2.

 

2.             Demand Registrations.

 

(a)           Requests for Registration. Subject to the terms and conditions of
this Agreement and of the Lock-Up Agreements, at any time or from time to time,
the holders of Registrable Securities may request registration under the
Securities Act of all or any portion of their Registrable Securities on Form S-1
or any similar long-form registration statement (“Long-Form Registrations”) or,
if available, on Form S-3 (including a shelf registration pursuant to Rule 415
under the Securities Act) or any similar short-form registration statement,
including an automatic shelf registration statement (as defined in Rule 405) (an
“Automatic Shelf Registration Statement”), if available to Pubco (“Short-Form
Registrations”) in accordance with Section 2(b) and Section 2(c) below (such
holders being referred to herein as the “Initiating Investors” and all
registrations requested by the Initiating Investors being referred to herein as
“Demand Registrations”). Each request for a Demand Registration shall specify
the approximate number of Registrable Securities requested to be registered and
the intended method of distribution. Within five (5) Business Days after receipt
of any such request, Pubco shall give written notice of such requested
registration to all other holders of Registrable Securities and, subject to the
terms and conditions set forth herein, shall include in such registration (and
in all related registrations and qualifications under state blue sky laws or in
compliance with other registration requirements and in any related underwriting)
all such Registrable Securities with respect to which Pubco has received written
requests for inclusion therein within five (5) Business Days after the receipt
of Pubco’s notice. Each holder of Registrable Securities agrees that such holder
shall treat as confidential the receipt of the notice of Demand Registration and
shall not disclose or use the information contained in such notice of Demand
Registration without the prior written consent of Pubco until such time as the
information contained therein is or becomes available to the public generally,
other than as a result of disclosure by the holder in breach of the terms of
this Agreement.

 

 - 3 - 

 

 

(b)          Long-Form Registrations. The OEP Parties may request an aggregate
of three (3), and the Investors (other than any OEP Party) holding a majority of
the Registrable Securities (other than those held by the OEP Parties) may
request one (1) Long-Form Registration in which Pubco shall pay all Registration
Expenses whether or not any such Long-Form Registration has become effective;
provided that, Pubco shall not be obligated to effect, or to take any action to
effect, any Long-Form Registration unless the aggregate market price of the
Registrable Securities requested to be registered in such Long-Form Registration
exceeds $20,000,000 at the time of request; provided, further, that Pubco shall
only be obligated to effect, or take any action to effect, three (3) Long-Form
Registrations in the case of any request therefor by any of the OEP Parties, and
one (1) Long-Form Registration in the case of any request therefor by any of the
Investors other than the OEP Parties. A registration shall not count as a
permitted Long-Form Registration until it has become effective and unless the
holders of Registrable Securities are able to register and sell at least 90% of
the Registrable Securities requested to be included in such registration;
provided that in any event Pubco shall pay all Registration Expenses in
connection with any registration initiated as a Long-Form Registration whether
or not it has become effective and whether or not such registration has counted
as one of the permitted Long-Form Registrations hereunder.

 

(c)           Short-Form Registrations. In addition to the Long-Form
Registration provided pursuant to Section 2(b), each of (i) the Investors
holding a majority of the Common Units not held by Pubco, (ii) the Investors
holding a majority of the Founder Shares, (iii) the Investors holding a majority
of the PIPE Shares and (iv) the OEP Parties, in each case, shall be entitled to
request an unlimited number of Short-Form Registrations in which Pubco shall pay
all Registration Expenses whether or not any such Short-Form Registration has
become effective; provided, however, that Pubco shall not be obligated to effect
any such Short-Form Registration: (i) if the holders of Registrable Securities,
together with the holders of any other securities of Pubco entitled to inclusion
in such Short-Form Registration, propose to sell Registrable Securities with an
aggregate market price at the time of request of less than $5,000,000, or (ii)
if Pubco has, within the twelve (12) month period preceding the date of such
request, already effected three (3) Short-Form Registrations for the holders of
Registrable Securities requesting a Short-Form Registration pursuant to this
Section 2(c). Demand Registrations shall be Short-Form Registrations whenever
Pubco is permitted to use any applicable short form registration and if the
managing underwriters (if any) agree to the use of a Short-Form Registration.
For so long as Pubco is subject to the reporting requirements of the Exchange
Act, Pubco shall use its reasonable best efforts to make Short-Form
Registrations available for the offer and sale of Registrable Securities. If
Pubco is qualified to and, pursuant to the request of the holders of a majority
of the Registrable Securities, has filed with the Commission a registration
statement under the Securities Act on Form S-3 pursuant to Rule 415 (a “Shelf
Registration”), then Pubco shall use its reasonable best efforts to cause the
Shelf Registration to be declared effective under the Securities Act as soon as
practicable after filing, and, if Pubco is a WKSI at the time of any such
request, to cause such Shelf Registration to be an Automatic Shelf Registration
Statement, and once effective, Pubco shall cause such Shelf Registration to
remain effective (including by filing a new Shelf Registration, if necessary)
for a period ending on the earlier of (i) the date on which all Registrable
Securities included in such registration have been sold or distributed pursuant
to the Shelf Registration or (ii) the date as of which all of the Registrable
Securities included in such registration are able to be sold within a 90-day
period in compliance with Rule 144 under the Securities Act. If for any reason
Pubco ceases to be a WKSI or becomes ineligible to utilize Form S-3, Pubco shall
prepare and file with the Commission a registration statement or registration
statements on such form that is available for the sale of Registrable
Securities.

 

 - 4 - 

 

 

(d)           Shelf Takedowns. At any time when the Existing Resale Shelf
Registration Statement, OEP Resale Shelf Registration Statement or a Shelf
Registration for the sale or distribution by holders of Registrable Securities
on a delayed or continuous basis pursuant to Rule 415, including by way of an
underwritten offering, block sale or other distribution plan (each, a “Resale
Shelf Registration”) is effective and its use has not been otherwise suspended
by Pubco in accordance with the terms of Section 2(f) below, upon a written
demand (a “Takedown Demand”) by any Investor that is, in either case, a Shelf
Participant holding Registrable Securities at such time (the “Initiating
Holder”), Pubco will facilitate in the manner described in this Agreement a
“takedown” of Registrable Securities off of such Resale Shelf Registration (a
“takedown offering”) and Pubco shall pay all Registration Expenses in connection
therewith; provided that Pubco will provide (x) in connection with any
non-marketed underwritten takedown offering (other than a Block Trade), at least
two (2) Business Days’ notice of such Takedown Demand to each holder of
Registrable Securities (other than the Initiating Holder) that is a Shelf
Participant, (y) in connection with any Block Trade initiated prior to November
8, 2022, notice of such Takedown Demand to each holder of Registrable Securities
(other than the Initiating Holder) that is a Shelf Participant no later than
noon Eastern time on the Business Day prior to the requested Takedown Demand and
(z) in connection with any marketed underwritten takedown offering, at least
five (5) Business Days’ notice of such Takedown Demand to each holder of
Registrable Securities (other than the Initiating Holder) that is a Shelf
Participant. In connection with (x) any non-marketed underwritten takedown
offering initiated prior to November 8, 2022 and (y) any marketed underwritten
takedown offering, if any Shelf Participants entitled to receive a notice
pursuant to the preceding sentence request inclusion of their Registrable
Securities (by notice to Pubco, which notice must be received by Pubco no later
than (A) in the case of a non-marketed underwritten takedown offering (other
than a Block Trade), the Business Day following the date notice is given to such
participant, (B) in the case of a Block Trade, by 10:00 p.m. Eastern time on the
date notice is given to such participant and (C) in the case of a marketed
underwritten takedown offering, three (3) Business Days following the date
notice is given to such participant), the Initiating Holder and the other Shelf
Participants that request inclusion of their Registrable Securities shall be
entitled to sell their Registrable Securities in such offering. Each holder of
Registrable Securities that is a Shelf Participant agrees that such holder shall
treat as confidential the receipt of the notice of a Takedown Demand and shall
not disclose or use the information contained in such notice without the prior
written consent of Pubco until such time as the information contained therein is
or becomes available to the public generally, other than as a result of
disclosure by the holder in breach of the terms of this Agreement.

 

 - 5 - 

 

 

 

(e)           Priority on Demand Registrations and Takedown Offerings. Pubco
shall not include in any Demand Registration that is an underwritten offering
any securities that are not Registrable Securities without the prior written
consent of the managing underwriters and the holders of a majority of the
Registrable Securities then outstanding. If a Demand Registration or a takedown
offering is an underwritten offering and the managing underwriters advise Pubco
in writing that in their opinion the number of Registrable Securities and, if
permitted hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities and other securities, if any, which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders of a majority of the Registrable Securities held by
Initiating Investors, Pubco shall include in such offering prior to the
inclusion of any securities which are not Registrable Securities the Registrable
Securities requested to be included in such registration (pro rata among the
holders of such Registrable Securities on the basis of the number of Registrable
Securities owned by each such holder).

 

(f)            Restrictions on Demand Registrations and Takedown Offerings. Any
demand for the filing of a registration statement or for a registered offering
(including a takedown offering) hereunder will be subject to the constraints of
any applicable lock-up arrangements to which any demanding Investor is party,
and any such demand must be deferred until such lock-up arrangements no longer
apply.

 

(i)                 Pubco shall not be obligated to effect any Demand
Registration within 30 days prior to Pubco’s good faith estimate of the date of
filing of an underwritten Public Offering of Pubco’s securities and for such a
period of time after such a filing as the managing underwriters request,
provided that such period shall not exceed 90 days from the effective date of
any such underwritten Public Offering. Pubco may postpone, for up to 60 days
from the date of the request (the “Suspension Period”), the filing or the
effectiveness of a registration statement for a Demand Registration or suspend
the use of a prospectus that is part of any Resale Shelf Registration (and
therefore suspend sales of the Registrable Securities included therein) by
providing written notice to the holders of Registrable Securities if the board
of directors of Pubco reasonably determines in good faith that the offer or sale
of Registrable Securities would be expected to have a material adverse effect on
any proposal or plan by Pubco or any subsidiary thereof to engage in any
material acquisition or disposition of assets or stock (other than in the
ordinary course of business) or any material merger, consolidation, tender
offer, recapitalization, reorganization or similar transaction or would require
Pubco to disclose any material nonpublic information which would reasonably be
likely to be detrimental to Pubco and its subsidiaries; provided that in such
event, the holders of Registrable Securities initially requesting such Demand
Registration or Takedown Demand shall be entitled to withdraw such request.
Pubco may delay or suspend the effectiveness of a Demand Registration or
takedown offering pursuant to this Section 2(f)(i) only once in any consecutive
twelve-month period; provided that, for the avoidance of doubt, Pubco may in any
event delay or suspend the effectiveness of Demand Registration or takedown
offering in the case of an event described under Section 5(g) to enable it to
comply with its obligations set forth in Section 5(f). Pubco may extend the
Suspension Period for an additional consecutive 60 days with the consent of the
Applicable Approving Party.

 

 - 6 - 

 

 

(ii)                 In the case of an event that causes Pubco to suspend the
use of any Resale Shelf Registration as set forth in Section 2(f)(i) or pursuant
to Section 5(g) (a “Suspension Event”), Pubco shall give a notice to the holders
of Registrable Securities registered pursuant to such Shelf Registration (a
“Suspension Notice”) to suspend sales of the Registrable Securities and such
notice shall state generally the basis for the notice and that such suspension
shall continue only for so long as the Suspension Event or its effect is
continuing. A holder of Registrable Securities shall not effect any sales of the
Registrable Securities pursuant to such Resale Shelf Registration (or such
filings) at any time after it has received a Suspension Notice from Pubco and
prior to receipt of an End of Suspension Notice (as defined below). Each holder
of Registrable Securities agrees that such holder shall treat as confidential
the receipt of the Suspension Notice and shall not disclose or use the
information contained in such Suspension Notice without the prior written
consent of Pubco until such time as the information contained therein is or
becomes available to the public generally, other than as a result of disclosure
by such holder in breach of the terms of this Agreement. The holders of
Registrable Securities may recommence effecting sales of the Registrable
Securities pursuant to the Resale Shelf Registration (or such filings) following
further written notice to such effect (an “End of Suspension Notice”) from
Pubco, which End of Suspension Notice shall be given by Pubco to the holders of
Registrable Securities and to such holders’ counsel, if any, promptly following
the conclusion of any Suspension Event.

 

(iii)                Notwithstanding any provision herein to the contrary, if
Pubco shall give a Suspension Notice with respect to any Resale Shelf
Registration pursuant to this Section 2(f), Pubco agrees that it shall extend
the period of time during which such Resale Shelf Registration shall be
maintained effective pursuant to this Agreement by the number of days during the
period from the date of receipt by the holders of the Suspension Notice to and
including the date of receipt by the holders of the End of Suspension Notice and
provide copies of the supplemented or amended prospectus necessary to resume
sales, with respect to each Suspension Event; provided that such period of time
shall not be extended beyond the date that Common Stock covered by such Resale
Shelf Registration are no longer Registrable Securities.

 

(g)           Selection of Underwriters. In connection with any Demand
Registration, the Applicable Approving Party shall have the right to select the
investment banker(s) and manager(s) to administer the offering; provided that
such selection shall be subject to the written consent of Pubco, which consent
will not be unreasonably withheld, conditioned or delayed. If any takedown
offering is an underwritten offering, the Applicable Approving Party shall have
the right to select the investment banker(s) and manager(s) to administer such
takedown offering. In each case, the Applicable Approving Party shall have the
right to approve the underwriting arrangements with such investment banker(s)
and manager(s) on behalf of all holders of Registrable Securities participating
in such offering. All Investors proposing to distribute their securities through
underwriting shall (together with Pubco and the Company) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting.

 

 - 7 - 

 

 

(h)           Other Registration Rights. Pubco represents and warrants to each
holder of Registrable Securities that the registration rights granted in this
Agreement do not conflict with any other registration rights granted by Pubco.
Except as provided in this Agreement, Pubco shall not grant to any Persons the
right to request Pubco to register any equity securities of Pubco, or any
securities, options or rights convertible or exchangeable into or exercisable
for such securities, without the prior written consent of the holders of a
majority of the Registrable Securities then outstanding.

 

(i)            Revocation of Demand Notice or Takedown Notice. At any time prior
to the effective date of the registration statement relating to a Demand
Registration or the “pricing” of any offering relating to a Takedown Demand, the
holders of Registrable Securities that requested such Demand Registration or
takedown offering may revoke such request for a Demand Registration or takedown
offering on behalf of all holders of Registrable Securities participating in
such Demand Registration or takedown offering without liability to such holders
of Registrable Securities, in each case by providing written notice to Pubco.

 

3.             Piggyback Registrations.

 

(a)           Right to Piggyback. Whenever Pubco proposes to register an
offering of any of its securities under the Securities Act (other than (i)
pursuant to the Existing Resale Shelf Registration Statement or OEP Resale Shelf
Registration Statement, (ii) pursuant to a Demand Registration, (iii) pursuant
to a Takedown Demand, (iv) in connection with registrations on Form S-4 or S-8
promulgated by the Commission or any successor forms, (v) a registration
relating solely to employment benefit plans, (vi) in connection with a
registration the primary purpose of which is to register debt securities, or
(vii) a registration on any form that does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities) and the registration form to be
used may be used for the registration of Registrable Securities (a “Piggyback
Registration”), Pubco shall give prompt written notice to all holders of
Registrable Securities of its intention to effect such a Piggyback Registration
and, subject to the terms of Sections 3(c) and 3(d) hereof, shall include in
such Piggyback Registration (and in all related registrations or qualifications
under blue sky laws or in compliance with other registration requirements and in
any related underwriting) all Registrable Securities with respect to which Pubco
has received written requests for inclusion therein within 10 business days
after the delivery of Pubco’s notice; provided that any such other holder may
withdraw its request for inclusion at any time prior to executing the
underwriting agreement or, if none, prior to the applicable registration
statement becoming effective.

 

(b)           Piggyback Expenses. The Registration Expenses of the holders of
Registrable Securities shall be paid by Pubco in all Piggyback Registrations,
whether or not any such registration became effective.

 

 - 8 - 

 

 

(c)           Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of Pubco, and the managing
underwriters advise Pubco in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number of
securities which can be sold in such offering without adversely affecting the
marketability, proposed offering price, timing or method of distribution of the
offering, Pubco shall include in such registration (i) first, the securities
Pubco proposes to sell, (ii) second, the Registrable Securities requested to be
included in such registration by the Investors which, in the opinion of such
underwriters, can be sold, without any such adverse effect (pro rata among the
holders of such Registrable Securities on the basis of the number of Registrable
Securities owned by each such holder), and (iii) third, other securities
requested to be included in such registration which, in the opinion of such
underwriters, can be sold, without any such adverse effect.

 

(d)           Priority on Secondary Registrations. If a Piggyback Registration
is an underwritten secondary registration on behalf of holders of Pubco’s
securities other than holders of Registrable Securities, and the managing
underwriters advise Pubco in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number of
securities which can be sold in such offering without adversely affecting the
marketability, proposed offering price, timing or method of distribution of the
offering, Pubco shall include in such registration (i) first, the securities
requested to be included therein by the holders initially requesting such
registration, (ii) second, the Registrable Securities requested to be included
in such registration by the Investors which, in the opinion of such
underwriters, can be sold, without any such adverse effect (pro rata among the
holders of such Registrable Securities on the basis of the number of Registrable
Securities owned by each such holder), and (iii) third, other securities
requested to be included in such registration which, in the opinion of such
underwriters, can be sold, without any such adverse effect.

 

(e)           Other Registrations. If Pubco has previously filed a Registration
Statement with respect to Registrable Securities pursuant to Section 2 or
pursuant to this Section 3, and if such previous registration has not been
withdrawn or abandoned, then Pubco shall not be required to file or cause to be
effected any other registration of any of its equity securities or securities
convertible or exchangeable into or exercisable for its equity securities under
the Securities Act (except on Form S-8 or any successor form) at the request of
any holder or holders of such securities until a period of at least 90 days has
elapsed from the effective date of such previous registration; provided,
however, that Pubco shall at all times remain obligated to file or amend, as
applicable, any OEP Resale Shelf Registration Statement in accordance with
Section 1(b) and/or Section 1(c) in the time periods specified therein.

 

(f)            Right to Terminate Registration. Pubco shall have the right to
terminate or withdraw any registration initiated by it under this Section 3
whether or not any holder of Registrable Securities has elected to include
securities in such registration. The Registration Expenses of such withdrawn
registration shall be borne by Pubco in accordance with Section 7.

 

4.             Agreements of Holders.

 

(a)           If required by the managing underwriter(s), in connection with any
underwritten Public Offering on or after the date hereof, each holder of
Registrable Securities that beneficially owns 1% or more of the outstanding
Common Stock shall enter into lock-up agreements with the managing
underwriter(s) of such underwritten Public Offering in such form as agreed to by
such managing underwriter(s); provided, however, that:

 

 - 9 - 

 

 

(i)                  Deerfield shall not be required to enter into lock-up
agreements pursuant to this Section 4(a) on more than two (2) occasions.

 

(ii)                 The lock-up agreements to which Deerfield enters into
pursuant to this Section 4(a) shall be for a period of not more than sixty (60)
days.

 

(iii)                The obligation of Deerfield to enter into lock-up
agreements pursuant to this Section 4(a) shall terminate on November 8, 2021.

 

(iv)                Deerfield shall not be required to enter into a lock-up
agreement pursuant to this Section 4(a) within six (6) months following the
expiration of a previous lock-up agreement pursuant to this Section 4(a).

 

(b)           The holders of Registrable Securities shall use reasonable best
efforts to provide such information as may reasonably be requested by Pubco, 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 Statement, including amendments and supplements
thereto, in order to effect the Registration of any Registrable Securities under
the Securities Act pursuant to Section 3 and in connection with Pubco’s
obligation to comply with federal and applicable state securities laws.

 

5.             Registration Procedures. In connection with the Registration to
be effected pursuant to the Existing Resale Shelf Registration Statement or OEP
Resale Shelf Registration Statement, and whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement or have initiated a takedown offering, Pubco shall use its
reasonable best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof, and pursuant thereto Pubco shall as expeditiously as reasonably
possible:

 

(a)            prepare in accordance with the Securities Act and all applicable
rules and regulations promulgated thereunder and file with the Commission a
registration statement, and all amendments and supplements thereto and related
prospectuses as may be necessary to comply with applicable securities laws, with
respect to such Registrable Securities and use its reasonable best efforts to
cause such registration statement to become effective (provided that at least
five (5) Business Days before filing a registration statement or prospectus or
any amendments or supplements thereto, Pubco shall furnish to counsel selected
by the Applicable Approving Party copies of all such documents proposed to be
filed, which documents shall be subject to the review and comment of such
counsel);

 

(b)           notify each holder of Registrable Securities of (A) the issuance
by the Commission of any stop order suspending the effectiveness of any
registration statement or the initiation of any proceedings for that purpose,
(B) the receipt by Pubco or its counsel of any notification with respect to the
suspension of the qualification of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (C) the effectiveness of each registration statement filed
hereunder;

 

 - 10 - 

 

 

(c)           prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
a period ending when all of the securities covered by such registration
statement have been disposed of in accordance with the intended methods of
distribution by the sellers thereof set forth in such registration statement
(but not in any event before the expiration of any longer period required under
the Securities Act or, if such registration statement relates to an underwritten
Public Offering, such longer period as in the opinion of counsel for the
underwriters a prospectus is required by law to be delivered in connection with
sale of Registrable Securities by an underwriter or dealer) and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement;

 

(d)           furnish to each seller of Registrable Securities thereunder such
number of copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus), each Free-Writing Prospectus and such other documents
as such seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;

 

(e)           during any period in which a prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission, including pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Act;

 

(f)            use its reasonable best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as the lead underwriter or the Applicable Approving Party
reasonably requests and do any and all other acts and things which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that Pubco shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 5(f), (ii) consent to general service of process in any
such jurisdiction or (iii) subject itself to taxation in any such jurisdiction);

 

(g)           promptly notify in writing each seller of such Registrable
Securities (i) after it receives notice thereof, of the date and time when such
registration statement and each post-effective amendment thereto has become
effective or a prospectus or supplement to any prospectus relating to a
registration statement has been filed and when any registration or qualification
has become effective under a state securities or blue sky law or any exemption
thereunder has been obtained, (ii) after receipt thereof, of any request by the
Commission for the amendment or supplementing of such registration statement or
prospectus or for additional information, and (iii) at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, Pubco promptly shall prepare, file with the
Commission and furnish to each such seller a reasonable number of copies of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus shall not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not misleading;

 

 - 11 - 

 

 

(h)          cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by Pubco are then listed
and, if not so listed, to be listed on a securities exchange and, without
limiting the generality of the foregoing, to arrange for at least two market
makers to register as such with respect to such Registrable Securities with
FINRA;

 

(i)            provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;

 

(j)            enter into and perform such customary agreements (including
underwriting agreements in customary form) and take all such other actions as
the Applicable Approving Party or the underwriters, if any, reasonably request
in order to expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock split or a
combination of shares and preparing for and participating in such number of
“road shows”, investor presentations and marketing events as the underwriters
managing such offering may reasonably request);

 

(k)           make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate and business documents and properties of Pubco as shall be necessary
to enable them to exercise their due diligence responsibility, and cause Pubco’s
officers, managers, directors, employees, agents, representatives and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
registration statement;

 

(l)             take all reasonable actions to ensure that any Free-Writing
Prospectus utilized in connection with any Demand Registration (including any
Shelf Registration), takedown offering or Piggyback Registration hereunder
complies in all material respects with the Securities Act, is filed in
accordance with the Securities Act to the extent required thereby, is retained
in accordance with the Securities Act to the extent required thereby and, when
taken together with the related prospectus, shall not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;

 

(m)           otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission;

 

(n)            permit any holder of Registrable Securities who, in its good
faith judgment (based on the advice of counsel), could reasonably be expected to
be deemed to be an underwriter or a controlling Person of Pubco to participate
in the preparation of such registration or comparable statement and to require
the insertion therein of material furnished to Pubco in writing, which in the
reasonable judgment of such holder and its counsel should be included;

 

 - 12 - 

 

 

(o)            in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in such registration statement for sale in any
jurisdiction, use its reasonable best efforts promptly to obtain the withdrawal
of such order;

 

(p)            use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the sellers thereof to consummate the disposition of such Registrable
Securities;

 

(q)            cooperate with the holders of Registrable Securities covered by
the registration statement and the managing underwriter or agent, if any, to
facilitate the timely preparation and delivery of certificates (not bearing any
restrictive legends) representing securities to be sold under the registration
statement and enable such securities to be in such denominations and registered
in such names as the managing underwriter, or agent, if any, or such holders may
request;

 

(r)             cooperate with each holder of Registrable Securities covered by
the registration statement and each underwriter or agent participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with FINRA;

 

(s)             if such registration includes an underwritten Public Offering,
use its reasonable best efforts to obtain a cold comfort letter from Pubco’s
independent public accountants and addressed to the underwriters, in customary
form and covering such matters of the type customarily covered by cold comfort
letters as the underwriters in such registration reasonably request;

 

(t)             provide a legal opinion of Pubco’s outside counsel, dated the
effective date of such registration statement (and, if such registration
includes an underwritten Public Offering, dated the date of the closing under
the underwriting agreement), with respect to the registration statement, each
amendment and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in customary
form and covering such matters of the type customarily covered by legal opinions
of such nature, which opinion shall be addressed to the underwriters;

 

(u)            if Pubco files an Automatic Shelf Registration Statement covering
any Registrable Securities, use its reasonable best efforts to remain a WKSI
(and not become an ineligible issuer (as defined in Rule 405)) during the period
during which such Automatic Shelf Registration Statement is required to remain
effective;

 

(v)            if Pubco does not pay the filing fee covering the Registrable
Securities at the time an Automatic Shelf Registration Statement is filed, pay
such fee at such time or times as the Registrable Securities are to be sold; and

 

 - 13 - 

 

 

(w)           subject to the terms of Section 2(c) and Section 2(d), if an
Automatic Shelf Registration Statement has been outstanding for at least three
(3) years, at the end of the third year, refile a new Automatic Shelf
Registration Statement covering the Registrable Securities, and, if at any time
when Pubco is required to re-evaluate its WKSI status Pubco determines that it
is not a WKSI, use its reasonable best efforts to refile the registration
statement on Form S-3 and keep such registration statement effective (including
by filing a new Resale Shelf Registration or Shelf Registration, if necessary)
during the period throughout which such registration statement is required to be
kept effective.

 

6.             Termination of Rights. Notwithstanding anything contained herein
to the contrary, the right of any Investor to include Registrable Securities in
any Demand Registration or any Piggyback Registration shall terminate on such
date that such Investor (together with its Affiliates) beneficially owns less
than 1% of the outstanding Common Stock on an as-converted basis and may sell
all of the Registrable Securities owned by such Investor pursuant to Rule 144 of
the Securities Act without any restrictions as to volume or the manner of sale
or otherwise; provided, however, that with respect to any Investor whose rights
have terminated pursuant to this Section 6, if following such a termination,
such Investor loses the ability to sell all of its Registrable Securities
pursuant to Rule 144 of the Securities Act without any restrictions as to volume
or the manner of sale or otherwise due to a change in interpretive guidance by
the Commission, then such Investor’s right to include Registrable Securities in
any Demand Registration or any Piggyback Registration shall be reinstated until
such time as the Investor is once again able to sell all of its Registrable
Securities pursuant to Rule 144 of the Securities Act without any restrictions
as to volume or the manner of sale or otherwise.

 

7.             Registration Expenses.

 

(a)            All expenses incident to Pubco’s performance of or compliance
with this Agreement, including, without limitation, all registration,
qualification and filing fees, listing fees, fees and expenses of compliance
with securities or blue sky laws, stock exchange rules and filings, printing
expenses, messenger and delivery expenses, fees and disbursements of custodians,
and fees and disbursements of counsel for Pubco and all independent certified
public accountants, underwriters (excluding underwriting discounts and
commissions) and other Persons retained by Pubco (all such expenses being herein
called “Registration Expenses”), shall be borne by Pubco as provided in this
Agreement and, for the avoidance of doubt, Pubco also shall pay all of its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability insurance
and the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by Pubco are then listed.
Each Person that sells securities pursuant to a Demand Registration, a Takedown
Demand or Piggyback Registration hereunder shall bear and pay all underwriting
discounts and commissions and transfer taxes applicable to the securities sold
for such Person’s account.

 

(b)            Pubco shall reimburse the holders of Registrable Securities
included in such registration for the reasonable fees and disbursements of one
counsel chosen by the Applicable Approving Party and one local counsel (if
necessary) for each applicable jurisdiction and chosen by the applicable holder
of Registrable Securities, in each case, for the purpose of rendering a legal
opinion on behalf of such holders in connection with any underwritten Demand
Registration, takedown offering or Piggyback Registration.

 

 - 14 - 

 

 

8.             Additional Payments Under Certain Circumstances.

 

(a)            [Payments (“Additional Payments”) with respect to the shares of
Common Stock included in the Registrable Securities shall be assessed as follows
if the following event occurs (such event being herein called a “Registration
Default”): the Existing Resale Shelf Registration Statement ceases to be
effective prior to the expiration of the Effectiveness Period (unless and except
to the extent that another Registration Statement covering the applicable
Registrable Securities is effective during the Effectiveness Period).

 

(b)            Additional Payments shall accrue on the applicable Registrable
Securities for each such day from and including the date on which any such
Registration Default occurs to but excluding the date on which all such
Registration Defaults have been cured at a rate of $0.05 per share (subject to
proportionate adjustment in the event of any stock split, reverse stock split or
other recapitalization) per month or portion thereof (on a 30/360 basis);
provided, however, that the Company’s obligation to pay Additional Payments
extends only to any shares of Common Stock included in the Registrable
Securities that are affected by the Registration Default; and provided further
that Additional Payments shall in no event accrue on account of any Registrable
Securities during any period that such Registrable Securities may not be sold
pursuant to the terms of the Lock-Up Agreements or any other applicable lock-up
arrangements to which the applicable Investor is party; provided, however, that
notwithstanding anything to the contrary herein, no Additional Payments were
accrued or are payable for any Registration Default in the 180 day period
following November 8, 2019, and each Investor waives any entitlement thereto.
Other than the obligation of payment of any Additional Payments in accordance
with the terms hereof, the Company will have no other liabilities for monetary
damages with respect to its registration obligations. With respect to each
Investor, the Company’s obligations to pay Additional Payments remain in effect
only so long as the applicable shares of Common Stock held by the Investor are
Registrable Securities. Notwithstanding anything to the contrary contained
herein, (i) in no event shall the aggregate of all Additional Payments payable
by the Company hereunder on account of any share of Common Stock exceed $0.50
per share (subject to proportionate adjustment in the event of any stock split,
reverse stock split or other recapitalization), (ii) no Additional Payments
shall accrue during any Suspension Period, (iii) a Registration Default shall be
deemed not to have occurred and be continuing, and no Additional Payments shall
accrue as a result thereof, if the Registration Default (x) relates to any
information supplied or failed to be supplied by an Investor in relation to any
Registration Statement or the related Prospectus or (y) arises due to the filing
by Pubco of any post-effective amendment to the Existing Resale Shelf
Registration Statement in connection with Pubco’s obligation to comply with
Section 1(b) or Section 1(c) (but only until such post-effective amendment is
declared effective by the Commission), and (iv) no Additional Payments shall
accrue or be payable to any OEP Party or in respect of the Registrable
Securities issued pursuant to the Investment Agreement. No Additional Payments
shall be payable (i) if as of the relevant Registration Default, the Registrable
Securities may be sold by the Investors without volume or manner of sale
restrictions under Rule 144, as determined by counsel to the Company pursuant to
a written opinion letter to such effect, addressed and reasonably acceptable to
the Company’s transfer agent or (ii) with respect to any period after the
expiration of the Effectiveness Period (it being understood that this clause
shall not relieve the Company of any Additional Payments accruing prior to the
expiration of the Effectiveness Period).

 

 - 15 - 

 

 

(c)            Any amounts of Additional Payments pursuant to this Section 8
will be payable in cash in arrears on the last day of each month following the
date on which a Registration Default occurs. The amount of Additional Payments
will be determined on the basis of a 360-day year comprised of twelve 30-day
months, and the actual number of days on which Additional Payments accrued
during such period.]1

 

9.             Indemnification.

 

(a)            Pubco agrees to (i) indemnify and hold harmless, to the fullest
extent permitted by law, each Investor and their respective officers, directors,
members, partners, agents, affiliates and employees and each Person who controls
such Investor (within the meaning of the Securities Act or the Exchange Act)
against all losses, claims, actions, damages, liabilities and expenses caused by
(A) any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or (B) any violation or alleged violation by Pubco of the
Securities Act or any other similar federal or state securities laws or any rule
or regulation promulgated thereunder applicable to Pubco and relating to action
or inaction required of Pubco in connection with any such registration,
qualification or compliance, and (ii) pay to each Investor and their respective
officers, directors, members, partners, agents, affiliates and employees and
each Person who controls such Investor (within the meaning of the Securities Act
or the Exchange Act), as incurred, any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, except insofar as the same are caused
by or contained in any information furnished in writing to Pubco or any managing
underwriter by such Investor expressly for use therein; provided, however, that
the indemnity agreement contained in this Section 9 shall not apply to amounts
paid in settlement of any such claim, loss, damage, liability or action if such
settlement is effected without the consent of Pubco (which consent shall not be
unreasonably withheld, conditioned or delayed), nor shall Pubco be liable in any
such case for any such claim, loss, damage, liability or action to the extent
that it solely arises out of or is based upon an untrue statement of any
material fact contained in the registration statement or omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the registration statement, in reliance upon and in conformity with written
information furnished by such Investor expressly for use in connection with such
registration statement. In connection with an underwritten offering, Pubco shall
indemnify any underwriters or deemed underwriters, their officers and directors
and each Person who controls such underwriters (within the meaning of the
Securities Act or the Exchange Act) to the same extent as provided above with
respect to the indemnification of the holders of Registrable Securities.

 

 

1 Note to Draft: Amendments from the Prior Agreement to only be made if
Deerfield consents to this Agreement, otherwise this Section 8 shall read as set
forth in the Prior Agreement.

 

 - 16 - 

 

 

(b)            In connection with any registration statement in which a holder
of Registrable Securities is participating, each such holder shall furnish to
Pubco in writing such information relating to such holder as Pubco reasonably
requests for use in connection with any such registration statement or
prospectus and, to the extent permitted by law, shall indemnify Pubco, its
officers, directors, employees, agents and representatives and each Person who
controls Pubco (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information so furnished in writing by such holder; provided that the obligation
to indemnify shall be individual, not joint and several, for each holder and
shall be limited to the net amount of proceeds actually received by such holder
from the sale of Registrable Securities pursuant to such registration statement.

 

(c)            Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person’s right to indemnification hereunder to the extent
such failure has not materially prejudiced the indemnifying party) and (ii)
unless in such indemnified party’s reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist with respect to such
claim, permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party shall not be subject to any liability for any
settlement made by the indemnified party without its consent (but such consent
shall not be unreasonably withheld, conditioned or delayed). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
shall not be obligated to pay the fees and expenses of more than one counsel (as
well as one local counsel for each applicable jurisdiction) for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest may exist
between such indemnified party and any other of such indemnified parties with
respect to such claim. In such instance, the conflicted indemnified parties
shall have a right to retain one separate counsel, chosen by the holders of a
majority of the Registrable Securities included in the registration, at the
expense of the indemnifying party. No indemnifying party, in the defense of such
claim or litigation, shall, except with the consent of each indemnified party,
consent to the entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation.

 

 - 17 - 

 

 

(d)            Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Sections 9(a) or 9(b) are unavailable
to or insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred to therein, then each 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 losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and the indemnified party
in connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, relates to information supplied by
such indemnifying party or indemnified party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 9(d) were determined by pro
rata allocation (even if the holders or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 9(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or expenses (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or, except as provided in Section 9(c), defending any such action
or claim. 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. The sellers’
obligations in this Section 9(d) to contribute shall be several in proportion to
the amount of securities registered by them and not joint and shall be limited
to an amount equal to the net proceeds actually received by such seller from the
sale of Registrable Securities effected pursuant to such registration.

 

(e)            The indemnification and contribution provided for under this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling Person of such indemnified party and shall survive the transfer of
Registrable Securities and the termination or expiration of this Agreement.

 

10.           Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements (including, without limitation, pursuant to any
over-allotment or “green shoe” option requested by the underwriters; provided
that no holder of Registrable Securities shall be required to sell more than the
number of Registrable Securities such holder has requested to include) and (b)
completes and executes all questionnaires, powers of attorney, custody
agreements, stock powers, indemnities, underwriting agreements and other
documents required under the terms of such underwriting arrangements; provided
that no holder of Registrable Securities included in any underwritten
registration shall be required to make any representations or warranties to
Pubco or the underwriters (other than representations and warranties regarding
such holder, such holder’s title to the securities, such Person’s authority to
sell such securities and such holder’s intended method of distribution) or to
undertake any indemnification obligations to Pubco or the underwriters with
respect thereto that are materially more burdensome than those provided in
Section 9. Each holder of Registrable Securities shall execute and deliver such
other agreements as may be reasonably requested by Pubco and the lead managing
underwriter(s) that are consistent with such holder’s obligations under Section
4, Section 5 and this Section 10 or that are necessary to give further effect
thereto. To the extent that any such agreement is entered into pursuant to, and
consistent with, Section 4 and this Section 10, the respective rights and
obligations created under such agreement shall supersede the respective rights
and obligations of the holders, Pubco and the underwriters created pursuant to
this Section 10.

 

 - 18 - 

 

 

 

11.              Other Agreements. Pubco shall file all reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder and shall take such further
action as the Investors may reasonably request, all to the extent required to
enable such Persons to sell securities pursuant to (a) Rule 144 adopted by the
Commission 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 or
(b) a registration statement on Form S-1 or any similar registration form
hereafter adopted by the Commission. Upon request, Pubco shall deliver to the
Investors a written statement as to whether it has complied with such
requirements. Pubco shall at all times use its reasonable best efforts to cause
the securities so registered to continue to be listed on one or more of the New
York Stock Exchange, the American Stock Exchange and the Nasdaq Stock Market.
Pubco shall use its best efforts to facilitate and expedite transfers of
Registrable Securities pursuant to Rule 144, which efforts shall include timely
notice to its transfer agent to expedite such transfers of Registrable
Securities.

 

12.              Definitions.

 

(a)               “Affiliate” means, with respect to any specified Person, any
other Person that, at the time of determination, directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common
control with such specified Person.

 

(b)               “Applicable Approving Party” means the holders of a majority
of the Registrable Securities participating in the applicable offering or, in
the case of a Short-Form Registration effected pursuant to Section 2(c), the
holders of a majority of the type of Registrable Securities that initiated such
Short-Form Registration.

 

(c)               “as-converted basis” means, for purposes of computing
beneficial ownership, such number of shares of Common Stock calculated on a
basis assuming all shares of Series A Preferred Stock had been converted by the
holders thereof pursuant to Section [6] of the Certificate of Designations
classifying the Series A Preferred Stock, but disregarding any restrictions or
limitations upon the conversion of such Series Preferred Stock[, including those
limitations specified in Section [8(f)] thereof].

 

(d)               “Block Trade” means any non-marketed underwritten takedown
offering taking the form of a bought deal or block sale to a financial
institution.

 

(e)               “Business Day” means any day that is not a Saturday or Sunday
or a legal holiday in the state in which Pubco’s chief executive office is
located or in New York, NY.

 

(f)                “Closing” means the closing of the sale of Series A Preferred
Stock to OEP pursuant to Section [1.2] of the Investment Agreement.

 

(g)               “Commission” means the U.S. Securities and Exchange
Commission.

 

 - 19 - 

 

 

(h)               “Common Stock” means the Class A Common Stock of Pubco, par
value $0.0001 per share.

 

(i)                 “Common Unit” has the meaning set forth in the LLC
Agreement.

 

(j)                 “Deerfield” means Deerfield Private Design Fund IV, L.P., a
Delaware limited partnership.

 

(k)               “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, or any successor federal law then in force, together
with all rules and regulations promulgated thereunder.

 

(l)                 “FINRA” means the Financial Industry Regulatory Authority.

 

(m)             “Founder Shares” means the 6,250,000 shares of Common Stock
issued to the Original Holders prior to Pubco’s initial public offering.

 

(n)               “Free-Writing Prospectus” means a free-writing prospectus, as
defined in Rule 405 of the Securities Act.

 

(o)               “LLC Agreement” means the Fifth Amended and Restated Limited
Liability Company Agreement of the Company, dated as of or about the date
hereof, by and among the Company, Pubco and the other members of the Company (as
the same may be amended, supplemented or modified from time to time in
accordance with the terms thereof).

 

(p)               “Lock-Up Agreements” means those certain Lock-Up Agreements,
dated as of July 8, 2019, by and among Pubco, the Company, and certain of the
Persons listed on the Schedule of Investors attached hereto.

 

(q)               “Merger Agreement” means the Agreement and Plan of Merger,
dated as of July 8, 2019, by and between Pubco, the Company and certain other
parties, as amended.

 

(r)                “Person” means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

 

(s)                “PIPE Shares” means the 12,500,000 shares of Common Stock
issued to the one of the Investors pursuant to that certain Subscription
Agreement, dated as of July 8, 2019, by and between Pubco and such Investor.

 

(t)                 “Prospectus” means the prospectus included in any
Registration Statement, as supplemented by any and all prospectus supplements
and as amended by any and all post-effective amendments and including all
material incorporated by reference in such prospectus.

 

(u)               “Public Offering” means any sale or distribution by Pubco
and/or holders of Registrable Securities to the public of Common Stock pursuant
to an offering registered under the Securities Act.

 

 - 20 - 

 

 

(v)               “OEP Party” or “OEP Parties” means OEP and each Affiliate of
OEP to whom shares of Series A Preferred Stock or Common Stock are transferred
pursuant to Section [5.3] of the Investment Agreement.

 

(w)             “Original Holders” shall mean each of Chris Wolfe, Steven
Hochberg, Dr. Mohit Kaushal, Dr. Gregory Sorensen and Dr. Susan Weaver.

 

(x)               “Register,” “Registered” and “Registration” mean 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.

 

(y)               “Registrable Securities” means (i) any Common Stock held by
the Investors, (ii) any Founder Shares held by the Investors, (iii) any Private
Placement Warrants (or underlying securities) held by the Investors, (iv) any
PIPE Shares held by the Investors (v) any Common Stock issued to an Investor
pursuant to the terms of the Merger Agreement, (vi) any Common Stock issued to
OEP pursuant to the Investment Agreement (whether or not such shares of Series A
Preferred Stock or Common Stock are subsequently transferred to any OEP Party)
held by any OEP Party (vii) any Common Stock issued upon conversion of the
Series A Preferred Stock issued to OEP pursuant to the Investment Agreement
(whether or not such shares of Series A Preferred Stock or Common Stock are
subsequently transferred to any OEP Party) held by any OEP Party or (viii) any
Common Stock issued or issuable with respect to the securities referred to in
the preceding clauses (i) through (vii) by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when they
have been sold or distributed to the public pursuant to an offering registered
under the Securities Act or sold to the public through a broker, dealer or
market maker in compliance with Rule 144 following the date hereof or
repurchased by Pubco or any of its subsidiaries. For purposes of this Agreement,
a Person shall be deemed to be a holder of Registrable Securities, and the
Registrable Securities shall be deemed to be in existence, whenever such Person
has the right to acquire directly or indirectly such Registrable Securities
(upon conversion or exercise in connection with a transfer of securities or
otherwise, but disregarding any restrictions or limitations upon the conversion
or exercise of such right), whether or not such acquisition has actually been
effected, and such Person shall be entitled to exercise the rights of a holder
of Registrable Securities hereunder; provided a holder of Registrable Securities
may only request that Registrable Securities in the form of Common Stock be
registered pursuant to this Agreement.

 

(z)               “Registration Statement” means any registration statement
filed by Pubco with the Commission in compliance with the Securities Act and the
rules and regulations promulgated thereunder for a public offering and sale of
Common Stock or Registrable Securities, including the Prospectus included in
such registration statement, amendments (including post-effective amendments)
and supplements to such registration statement, and all exhibits to and all
material incorporated by reference in such registration statement (other than a
registration statement on Form S-4 or Form S-8, or their successors).

 

 - 21 - 

 

 

(aa)            “Rule 144”, “Rule 158”, “Rule 405”, “Rule 415” and “Rule 430B”
mean, in each case, such rule promulgated under the Securities Act (or any
successor provision) by the Commission, as the same shall be amended from time
to time, or any successor rule then in force.

 

(bb)           “Securities Act” means the Securities Act of 1933, as amended
from time to time, or any successor federal law then in force, together with all
rules and regulations promulgated thereunder.

 

(cc)            “Shelf Participant” means any holder of Registrable Securities
listed as a potential selling stockholder in connection with the Existing Resale
Shelf Registration Statement, OEP Resale Shelf Registration Statement or the
Shelf Registration, as applicable, or any such holder that could be added to
such Existing Resale Shelf Registration Statement, OEP Resale Shelf Registration
Statement or Shelf Registration without the need for a post-effective amendment
thereto or added by means of an automatic post-effective amendment thereto.

 

(dd)           “WKSI” means a “well-known seasoned issuer” as defined under Rule
405.

 

13.           Miscellaneous.

 

(a)               No Inconsistent Agreements. Neither the Company nor Pubco
shall not hereafter enter into any agreement with respect to its securities
which is inconsistent with or violates or in any way impairs the rights granted
to the Investors in this Agreement.

 

(b)               Entire Agreement; Effectiveness. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, understandings, negotiations and
discussions among the parties hereto, written or oral, with respect to the
subject matter hereof, including without limitation, but subject to the
remainder of this Section 13(b), the Prior Agreement. This Agreement shall be
automatically effective as of the Closing (as defined in the Investment
Agreement), without further action by any party hereto. Prior to the Closing,
the Prior Agreement shall remain in effect. If the Investment Agreement is
terminated for any reason, then this amendment shall be void and of no force and
effect.

 

(c)               Remedies. Any Person having rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages caused by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.
The parties hereto agree and acknowledge that money damages would not be an
adequate remedy for any breach of the provisions of this Agreement and that, in
addition to any other rights and remedies existing in its favor, any party shall
be entitled to specific performance and/or other injunctive relief from any
court of law or equity of competent jurisdiction (without posting any bond or
other security) in order to enforce or prevent violation of the provisions of
this Agreement.

 

(d)               Amendments and Waivers. Except as otherwise provided herein,
the provisions of this Agreement may be amended or waived only with the prior
written consent of Pubco and the holders of a majority of the Registrable
Securities then outstanding; provided, that no amendment may materially and
disproportionately adversely affect the rights of any holder of Registrable
Securities compared to other holders of Registrable Securities without the
consent of such adversely affected holder; and provided further, that the
definition of “Effectiveness Period” and Section 8 (Additional Payments Under
Certain Circumstances) may not be amended without the prior written consent of
Deerfield. Any amendment or waiver effected in accordance with this Section
13(d) shall be binding upon each Investor, Pubco and the Company. The failure of
any party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.

 

 - 22 - 

 

 

(e)               Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of
purchasers or holders of Registrable Securities are also for the benefit of, and
enforceable by, any subsequent holder of Registrable Securities.

 

(f)                Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid, illegal or unenforceable in any respect under any applicable law,
such provision shall be ineffective only to the extent of such prohibition,
invalidity, illegality or unenforceability, without invalidating the remainder
of this Agreement.

 

(g)               Counterparts. This Agreement may be executed simultaneously in
counterparts (including by means of telecopied, facsimile or portable data
format (PDF) signature pages), any one of which need not contain the signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.

 

(h)               Descriptive Headings; Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a part
of this Agreement. The use of the word “including” herein shall mean “including
without limitation.”

 

(i)                 Governing Law; Jurisdiction. All issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
The parties hereto agree that any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby shall be brought in any
Delaware Chancery Court, or if such court does not have subject matter
jurisdiction, any court of the United States located in the State of Delaware.
Each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court.

 

 - 23 - 

 

 

(j)                 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by or email or by registered or certified
mail (postage prepaid, return receipt requested) to each Investor at the address
indicated on the Schedule of Investors attached hereto and to Pubco and the
Company at the addresses indicated below (or at such other address for a party
as shall be specified in a notice given in accordance with this Section 13(j)):

 

if to Pubco:

 

AdaptHealth Corp.
780 Third Avenue

New York, New York 10017
Telephone: (212) 551-1600
Attention: Chris Wolfe
Email: chris.wolfe@dfbhealthcare.com

 

with a copy to:

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Attention: Steven J. Gartner; Michael E. Brandt; and Danielle Scalzo

Facsimile: (212) 728-8111

Email: sgartner@willkie.com; mbrandt@willkie.com; and DScalzo@willkie.com

 

if to the Company:

 

AdaptHealth Holdings, LLC
122 Mill Road, Suite A130

Phoenixville, Pennsylvania 19460

Attention: Luke McGee

Email: luke.mcgee@adapthealth.com

 

with a copy to:

 

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Attention: Steven J. Gartner; Michael E. Brandt; and Danielle Scalzo

Facsimile: (212) 728-8111

Email: sgartner@willkie.com; mbrandt@willkie.com; and DScalzo@willkie.com

 

 - 24 - 

 

 

(k)          Mutual Waiver of Jury Trial. As a specifically bargained inducement
for each of the parties to enter into this Agreement (with each party having had
opportunity to consult counsel), each party hereto expressly and irrevocably
waives the right to trial by jury in any lawsuit or legal proceeding relating to
or arising in any way from this Agreement or the transactions contemplated
herein, and any lawsuit or legal proceeding relating to or arising in any way to
this Agreement or the transactions contemplated herein shall be tried in a court
of competent jurisdiction by a judge sitting without a jury.

 

(l)           No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.

 

* * * * *

 

 - 25 - 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement as of the date first written above.

 

 

  COMPANY:       ADAPTHEALTH HOLDINGS LLC           By:     Name:     Title:
                                

 

[Signature Page to Registration Rights Agreement]

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement as of the date first written above.

 

  PUBCO:       ADAPTHEALTH CORP.           By:     Name:     Title:
                          

 

[Signature Page to Registration Rights Agreement]

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement as of the date first written above.

 

  INVESTORS:       [ONE EQUITY PARTNERS VII, L.P.]           By:
                               Name:     Title:  

 

[Signature Page to Registration Rights Agreement]

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement as of the date first written above.

 

 

  INVESTORS:           DEERFIELD PRIVATE DESIGN FUND IV, L.P.   By: Deerfield
Mgmt IV, L.P., General Partner   By: J.E. Flynn Capital IV, LLC, General Partner
      By:                       Name:   Title: Authorized Signatory          
2321 CAPITAL LLC       By:     Name:   Title:           AMPEV LLC       By:    
Name:   Title:           BLUEMOUNTAIN SUMMIT OPPORTUNITIES FUND II (US) L.P.    
  By:     Name:   Title:           BLUE RIVER NJ LLC       By:     Name:  
Title:

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  CFCP LLC       By:                       Name:   Title:       FRESH POND
INVESTMENT LLC       By:     Name:   Title:           JEDI ENTERPRISES, LLC    
  By:     Name:   Title:           LBM DME HOLDINGS LLC       By:     Name:  
Title:           MAYAID2001 LLC       By:   Name:   Title:           MCLARTY
CAPITAL PARTNERS SBIC, L.P.       By:     Name:   Title:           OCEAN ROCK NJ
LLC       By:     Name:   Title:

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

  PLAINS CAPITAL LLC       By:                        Name:   Title:          
QUAD CAPITAL, LLC       By:     Name:   Title:           QUADRANT MANAGEMENT,
INC.       By:     Name:   Title:           VERUS EQUITY HOLDING COMPANY LLC    
  By:     Name:   Title:           VERUS NOTE HOLDING COMPANY LLC       By:    
Name:   Title:           WHEATFIELD LLC       By:     Name:   Title:    

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

      CLIFTON BAY OFFSHORE INVESTMENTS L.P.       By:                       
Name:   Title:       BLUEMOUNTAIN FOINAVEN MASTER FUND L.P.       By:     Name:
  Title:           BMSB L.P.       By:     Name:   Title:           BLUEMOUNTAIN
FURSAN FUND L.P.       By:     Name:   Title:

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

REGISTRATION RIGHTS AGREEMENT JOINDER

 

The undersigned is executing and delivering this Joinder pursuant to the
Registration Rights Agreement dated as of (as the same may hereafter be amended,
the “Registration Rights Agreement”), among AdaptHealth Holdings Corporation, a
Delaware corporation, AdaptHealth Holdings LLC, a Delaware limited liability
company (the “Company”), and the other persons named as parties therein.

 

By executing and delivering this Joinder to Pubco, the undersigned hereby agrees
to become a party to, to be bound by, and to comply with the provisions of the
Registration Rights Agreement as a holder of Registrable Securities in the same
manner as if the undersigned were an original signatory to the Registration
Rights Agreement.

 

Accordingly, the undersigned has executed and delivered this Joinder as of the
___ day of _____________, 20__.

 

  INVESTOR:       [•]       By:         Its:       Address for Notices:      
[•]   [•]   [•]   [•]       Agreed and Accepted as of       ADAPTHEALTH HOLDINGS
LLC           By:                      Its: