Exhibit 10.1


 


EXECUTION VERSION



 





 



 


SECURITIES PURCHASE AGREEMENT


 


BY AND BETWEEN


 


ENTASIS
THERAPEUTICS HOLDINGS INC.


 


AND


 


INNOVIVA, INC.


 


Dated as of April 12, 2020


 


 



 






     


     


    

 


TABLE OF CONTENTS


 




	Article
    I DEFINITIONS	1
	Section 1.1   	Definitions	1
	Section 1.2   	Construction	9
	Article
    II PURCHASE AND SALE	10
	Section 2.1   	The Purchase and Sale	10
	Section 2.2   	First Closing	11
	Section 2.3   	Second Closing	12
	Article
    III REPRESENTATIONS AND WARRANTIES OF THE COMPANY	13
	Section 3.1   	Organization and Qualification	13
	Section 3.2   	Authorization; Enforcement; Validity	13
	Section 3.3   	Issuance of Securities	14
	Section 3.4   	No Conflicts	14
	Section 3.5   	Consents	14
	Section 3.6   	No General Solicitation; Agents’ Fees	15
	Section 3.7   	Application of Takeover Protections; Rights Agreement	15
	Section 3.8   	SEC Documents; Financial Statements	15
	Section 3.9   	Absence of Certain Changes	17
	Section 3.10   	Conduct of Business; Regulatory Permits	17
	Section 3.11   	Certain Regulatory Matters	18
	Section 3.12   	Sarbanes-Oxley Act	19
	Section 3.13   	Transactions With Affiliates	19
	Section 3.14   	Capitalization	19
	Section 3.15   	Indebtedness	20
	Section 3.16   	Material Contracts	20
	Section 3.17   	Litigation	21
	Section 3.18   	Insurance	21
	Section 3.19   	Employee Relations	21
	Section 3.20   	Title	22
	Section 3.21   	Intellectual Property Rights	23
	Section 3.22   	Environmental Laws	24
	Section 3.23   	Tax Status	25
	Section 3.24   	Investment Company Status	25
	Section 3.25   	U.S. Real Property Holding Corporation	25
	Section 3.26   	Registration Eligibility	25
	Section 3.27   	Transfer Taxes	25
	Section 3.28   	Shell Company Status	25
	Section 3.29   	ERISA Compliance	26
	Section 3.30   	Management	26
	Section 3.31   	FDA	27
	Section 3.32   	Stock Option Plans	27
	Section 3.33   	No Disqualification Events	27
	Section 3.34   	No Integrated Offering	28
	Section 3.35   	Regulation M Compliance	28



 






    i


     


    

 


	Section 3.36   	Proxy Statement	28
	Section 3.37   	Specified Contract	28
	Article
    IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	28
	Section 4.1   	Organization	28
	Section 4.2   	Organizational Power and Authority	28
	Section 4.3   	Execution and Delivery	28
	Section 4.4   	No Conflict	29
	Section 4.5   	Consents and Approvals	29
	Section 4.6   	No Registration	29
	Section 4.7   	Purchasing Intent	29
	Section 4.8   	Sophistication; Investigation	29
	Section 4.9   	Sufficient Funds	30
	Section 4.10   	Bad Actor	30
	Section 4.11   	Disclaimer of Other Representations and Warranties	30
	Article
    V ADDITIONAL COVENANTS	30
	Section 5.1   	Covenants of the Company	30
	Section 5.2   	Pre-Closing Exclusivity	33
	Section 5.3   	[Reserved]	33
	Section 5.4   	Stockholder Approval	34
	Section 5.5   	Registration Rights Agreement	35
	Section 5.6   	Integration	35
	Section 5.7   	Required Minimum	35
	Section 5.8   	Acknowledgment of Dilution	36
	Section 5.9   	Expense Reimbursement	36
	Section 5.10   	Blue Sky Filings	36
	Article
    VI CONDITIONS TO THE OBLIGATIONS OF THE PARTIES	36
	Section 6.1   	Conditions to the Obligations of the Purchaser at the First Closing	36
	Section 6.2   	Conditions to the Obligations of the Company at the First Closing	38
	Section 6.3   	Conditions to the Obligations of the Purchaser at the Second Closing	38
	Section 6.4   	Conditions to the Obligations of the Company at the Second Closing	39
	Article
    VII INTENTIONALLY OMITTED	40
	Article
    VIII TERMINATION	40
	Section 8.1   	Termination	40
	Section 8.2   	Effect of Termination	42
	Section 8.3   	Termination Fee	42
	Section 8.4   	Second Closing Abandonment	42
	Article
    IX GENERAL PROVISIONS	43
	Section 9.1   	Notices	43
	Section 9.2   	Assignment; Third-Party Beneficiaries	44
	Section 9.3   	Prior Negotiations; Entire Agreement	44
	Section 9.4   	Governing Law; Venue: Forum	44



 






    ii


     


    

 


	Section 9.5   	Waiver of Jury Trial	44
	Section 9.6   	Counterparts	44
	Section 9.7   	Waivers and Amendments; Rights Cumulative; Consent; Severability	45
	Section 9.8   	Headings	45
	Section 9.9   	Specific Performance	45
	Section 9.10   	Publicity	45
	Section 9.11   	No Recourse	46
	Section 9.12   	Limitation of Liability	46
	Section 9.13   	Further Assurances	46
	Section 9.14   	Survival	46


 


EXHIBITS


 


	Exhibit A	Investor Rights Agreement
	Exhibit B	Warrant Certificate
	Exhibit C	Voting Agreement
	Exhibit D	Registration Rights Agreement



 





 



    iii


     


    




 


SECURITIES PURCHASE AGREEMENT


 


THIS SECURITIES PURCHASE
AGREEMENT (together with all Exhibits and Schedules hereto, as each may be amended, restated, amended and restated, supplemented
or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”), dated as of
April 12, 2020, is made by and between (i) Entasis Therapeutics Holdings Inc., a Delaware corporation (the “Company”),
and (ii) Innoviva, Inc. (the “Purchaser”). The Company and the Purchaser are referred to herein individually
as a “Party,” and, collectively as the “Parties.” Capitalized terms used herein and not otherwise
defined herein are defined in Article I hereof.


 


RECITALS


 


WHEREAS, subject to the
terms and conditions contained in this Agreement, at the Closing, the Company intends to issue and sell to the Purchaser (a) 14,000,000
shares of fully paid and non-assessable Common Stock (the “Purchased Common Stock”) and (b) Warrants to
purchase 14,000,000 shares of Common Stock (as may be adjusted pursuant to Section 2.1(a)) (the “Purchased
Warrants”), and the Purchaser desires to purchase such Purchased Common Stock and Purchased Warrants from the Company


 


WHEREAS, each share of
Purchased Common Stock and each Purchased Warrant will be issued and sold to the Purchaser as a unit at the First Closing and the
Second Closing, as applicable, for a per unit price of $2.50 (the “Per Unit Purchase Price”) payable in accordance
with the terms hereof; and


 


WHEREAS, the Board has
unanimously determined that this Agreement and the transactions contemplated hereby are advisable, fair and in the best interests
of the Company and its stockholders.


 


NOW, THEREFORE, in consideration
of the mutual promises, agreements, representations, warranties and covenants contained herein, the Company (on behalf of itself
and each of its direct and indirect Subsidiaries) and the Purchaser agree as follows:


 


Article
I



DEFINITIONS


 


Section
1.1           
Definitions. Except as otherwise expressly provided in this Agreement, whenever used in this Agreement (including
any Exhibits and Schedules hereto), the following terms shall have the respective meanings specified therefor below:


 


“Acquisition
Proposal” has the meaning set forth in Section 5.2.


 


“Action”
means, any action, suit, claim, arbitration, mediation, litigation, hearing, or other proceeding by or before any court, tribunal
or arbitrator or any Governmental Entity.


 


“Affiliate”
means, with respect 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, that neither Purchaser nor any of its Affiliates shall be deemed to
be an Affiliate of the Company or any of its direct and indirect Subsidiaries for purposes of this Agreement. “Affiliates”
and “Affiliated” have correlative meanings.


 






    1


     


    

 


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


 


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


 


“Business Day”
means any day that is not a Saturday, Sunday or other day on which commercial banks are required or permitted to be closed in the
State of California.


 


“Bylaws”
means the Company’s bylaws, as amended through the date hereof.


 


“Capital Stock”
means (a) any shares, interests, participations or other equivalents (however designated) of capital stock of a corporation;
(b) any ownership interests in a Person other than a corporation, including membership interests, partnership interests, joint
venture interests and beneficial interests; and (c) any warrants, options, convertible or exchangeable securities, subscriptions,
rights (including any preemptive or similar rights), calls or other rights to purchase or acquire any of the foregoing.


 


“Certificate
of Incorporation” means the certificate of incorporation of the Company, as amended through the date hereof.


 


“Closing”
means the First Closing and the Second Closing, collectively.


 


“Common Stock”
means the common stock, par value $0.001 per share, of the Company, and any Capital Stock into which such Common Stock shall have
been converted, exchanged or reclassified following the date hereof.


 


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


 


“Company’s
Knowledge,” “Knowledge of the Company” or “Knowledge” means the actual knowledge
of Manoussos Perros, Ph.D. and Michael Gutch, Ph.D and, solely with respect to the representations in Section 3.21, the
actual knowledge of David Altarac, MD, John Mueller, PhD and Ruben Tommasi, PhD.


 


“Company Organizational
Documents” mean the Certificate of Incorporation and the Bylaws.


 


“Consolidated
Group” means the Company and its wholly owned subsidiary, Entasis Therapeutics Inc.


 


“Contract”
means any agreement, contract or instrument, including any loan, note, bond, mortgage, indenture, guarantee, deed of trust, license,
franchise, commitment, lease, franchise agreement, letter of intent, memorandum of understanding or other obligation, and any amendments
thereto, whether written or oral.


 






    2


     


    

 


“Control”
means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting securities or by contract or agency or otherwise.
 “Controlled” has a correlative meaning.


 


“Definitive
Documents” means this Agreement, the Registration Rights Agreement, the Investor Rights Agreement, the Warrant Certificate
and each of the other agreements and instruments entered into and delivered by the Parties hereto in connection with the transactions
contemplated hereby.


 


“Environmental
Laws” means all applicable federal, state, local or foreign Laws relating to pollution or protection of human health
or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including Laws relating
to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances
or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations,
codes, demands or demand letters, licenses, notices or notice letters, Orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.


 


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


 


“ERISA Affiliate”
means any trade or business (whether or not incorporated) that together with the Company or any of its Subsidiaries is treated
as a single employer within the meaning of Section 414 of the Code or Section 4001 of ERISA.


 


“ERISA Event”
means (1) a Reportable Event with respect to a Pension Plan; (2) a withdrawal by the Company, any of its Subsidiaries or any of
their respective ERISA Affiliates from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as a termination under Section
4062(e) of ERISA; (3) a complete or partial withdrawal by the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan, written notification of any member of the Consolidated Group or any of their respective ERISA
Affiliates concerning the imposition of Withdrawal Liability or written notification that a Multiemployer Plan is in reorganization
within the meaning of Title IV of ERISA or that a Multiemployer Plan has been determined to be in “endangered” or critical
status (within the meaning of Section 432 of the Code or Section 305 of ERISA); (4) the filing under Section 4041(c) of ERISA of
a notice of intent to terminate a Pension Plan, the treatment of a Pension Plan or Multiemployer Plan amendment as a termination
under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer
Plan; (5) the imposition of any liability under Title IV of ERISA, other than for the payment of plan contributions or PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon the Company, any of its Subsidiaries or any of their respective ERISA
Affiliates, (6) the failure to satisfy the minimum funding standards (within the meaning of Section 412 of the Code or Section
302 of ERISA) with respect to any Pension Plan, (7) the application for a minimum funding waiver under Section 302(c) of ERISA
with respect to a Pension Plan, (8) the imposition of a Lien under Section 303(k) of ERISA with respect to any Pension Plan, (9)
a determination that any Pension Plan is in “at risk” status (within the meaning of Section 303 of ERISA), or (10)
the Company, any of its Subsidiaries or any of their respective ERISA Affiliates has engaged in a transaction that is subject to
Sections 4069 or 4212(c) of ERISA.


 






    3


     


    

 


“Expense Reimbursement”
means the reimbursement obligation contemplated by Section 5.9.


 


“FDA”
means the United States Food and Drug Administration.


 


“First Closing”
has the meaning set forth in Section 2.2(a).


 


“First Closing
Date” has the meaning set forth in Section 2.2(a).


 


“First Common
Stock” means the maximum number of shares of Common Stock issuable at the First Closing to Purchaser in compliance with
any and all Laws and without the requirement for the prior receipt of the Stockholder Approval under the listing requirements of
the NASDAQ Global Market, assuming that Warrants to purchase an equal number of shares of Common Stock are also issued to Purchaser
at the First Closing.


 


“First Purchase
Price” means an amount in cash equal to the product of (i) the number of shares of First Common Stock multiplied by (ii)
the Per Unit Purchase Price.


 


“First Warrants”
means Warrants to purchase a number of shares of Common Stock equal to the number of shares of First Common Stock.


 


“Fundamental
Representations” has the meaning set forth in Section 9.14.


 


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


 


“Governmental
Entity” means any applicable nation, state, county, city, town, village, district or other political jurisdiction of
any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), stock exchange,
multi-national organization or body, or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory, or Taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity
or enterprise owned or controlled by a government or a public international organization or any of the foregoing.


 


“Indebtedness”
means (a) any indebtedness or other obligation for borrowed money, whether current, short-term or long-term and whether secured
or unsecured; (b) any indebtedness evidenced by any note, bond, debenture or other security or similar instrument; (c) any
liabilities with respect to interest rate or currency swaps, collars, caps and similar hedging obligations; (d) any liabilities
in respect of any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof,
which liabilities are required to be classified and accounted for under GAAP as capital leases; (e) any liabilities under
any performance bond or letter of credit or any bank overdrafts and similar charges; (f) any accrued interest, premiums, penalties
and other obligations relating to the foregoing items in clauses (a) through (e); and (g) any indebtedness referred to in
clauses (a) through (f) above of any Person that is either guaranteed (including under any “keep well” or similar arrangement)
by, or secured (including under any letter of credit, banker’s acceptance or similar credit transaction) by any Lien upon
any property or asset owned by, the Company or any of its Subsidiaries.


 






    4


     


    

 


“Insolvent”
means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the
Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’
total Indebtedness, (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to incur
or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect to
the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s
(as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such
Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur
or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature.


 


“Investor Rights
Agreement” means an Investor Rights Agreement to be entered into by the Company, Purchaser and the other parties thereto
in substantially the form set forth on Exhibit A hereto.


 


“Law”
means any law, statute, code, ordinance, regulation or rule of any Governmental Entity.


 


“Lien”
means any lien, adverse claim, charge, option, right of first refusal, preemptive right, servitude, security interest, mortgage,
pledge, deed of trust, easement, encumbrance, restriction on transfer, Taxes, conditional sale or other title retention agreement,
defect in title or other restrictions of any kind; provided that restrictions on transfer arising under applicable securities
Laws shall not be Liens.


 


“Material Adverse
Effect” means any effect, change, event, development, condition or occurrence (each, an “Effect”)
that, individually or together with all other Effects, (i) has had or would be reasonably expected to have or result in a material
adverse effect or material adverse change on the business, assets, liabilities, properties, financial condition or operating results
of the Company and its Subsidiaries, taken as a whole, or (ii) to the ability of the Company to consummate timely the transactions
contemplated by this Agreement, provided, however, that, none of the following Effects, by itself or when aggregated
with any one or more other Effects, shall be deemed to be or constitute a Material Adverse Effect and none of the following Effects,
by itself or when aggregated with any one or more other Effects, shall be taken into account when determining whether a Material
Adverse Effect has occurred or is reasonably likely to occur for purposes of clause (i) above: (A) (1) general market, economic
or political conditions in the United States or worldwide or (2) conditions (or any changes therein) generally affecting the industries
in which the Company conducts business, in each case, including any acts of terrorism or war, in the case of each of clauses (1)
and (2), solely to the extent that such Effects do not have and are not reasonably likely to have a disproportionate impact on
the Company, relative to other companies operating in the same industries in which the Company conducts business; or (B) the announcement
or the existence of this Agreement and the transactions contemplated hereby.


 






    5


     


    

 


“Material Contract”
means any Contract that would be required to be filed by the Company as a “material contract” pursuant to Item 601(b)(10)
of Regulation S-K under the Securities Act.


 


“Multiemployer
Plan” means any multiemployer plan as defined in Section 4001(a)(3) of ERISA and subject to Title IV of ERISA, to which
any member of the Consolidated Group or any of their respective ERISA Affiliates makes or is obligated to make contributions, or,
during the preceding five (5) plan years, has made or has been obligated to make contributions.


 


“NASDAQ Global
Market” means the stock market index maintained by the National Association of Securities Dealers Automated Quotations
(NASDAQ).


 


“Order”
means any judgment, order, award, injunction, writ, permit, license, settlement or decree issued, promulgated, made, rendered or
entered into by or with any Governmental Entity or arbitrator of applicable jurisdiction (in each case, whether temporary, preliminary
or permanent).


 


“Party”
or “Parties” has the meaning set forth in the Preamble.


 


“PBGC”
means the Pension Benefit Guaranty Corporation.


 


“Pension Plan”
means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer
Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Company, any of its Subsidiaries or any of their
respective ERISA Affiliates or to which the Company, any of its Subsidiaries or any of their respective ERISA Affiliates contributes
or has an obligation to contribute or has made or has had an obligation to make contributions at any time in the preceding five
plan years.


 


“Person”
means an individual, firm, corporation (including any non-profit corporation), partnership, limited liability company, joint venture,
association, trust, Governmental Entity or other entity or organization.


 


“Pharmaceutical
Product” means any product, compound, medicine or therapeutic which is subject to regulation
as a drug, medicine or controlled substance by the United States Food and Drug Administration or any regulatory authority outside
the United States.


 


“Plan”
means any material “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Company
or any of its Subsidiaries, or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA,
any of their respective ERISA Affiliates.


 


“Registration
Rights Agreement” shall have the meaning set forth in Section 5.5.


 






    6


     


    

 


“Related Party”
means, with respect to any Person, (a) any former, current or future director, officer, agent, Affiliate, employee, general
or limited partner, member, manager or stockholder of such Person and (b) any former, current or future director, officer,
agent, Affiliate, employee, general or limited partner, member, manager or stockholder of any of the foregoing.


 


“Reportable
Event” means, with respect to any Pension Plan, any of the events set forth in Section 4043(c) of ERISA or the regulations
issued thereunder, other than events for which the thirty (30) day notice period has been waived.


 


“Representatives”
means, with respect to any Person, such Person’s directors, officers, members, partners, managers, employees, agents, investment
bankers, attorneys, accountants, advisors and other representatives.


 


“Required Minimum”
means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future
pursuant to this Agreement, including the shares of Common Stock issuable upon exercise in full of all Purchased Warrants.


 


“Sanctioned
Country” means any country or region that is subject or target of a comprehensive trade embargo under Sanctions.


 


“Sanctioned
Person” means any individual or entity that is the subject or target of Sanctions, including (i) any individual or entity
listed on any Sanctions-related restricted party list, including the U.S. Department of Treasury, Office of Foreign Asset Control’s
(“OFAC”) Specially Designated Nationals and Blocked Persons List and the EU Consolidated List, (ii) any entity
that is owned, directly or indirectly, or otherwise controlled by a Person or Persons described in clause (i) above, (iii) any
national, resident, government, agency, or instrumentality of a Sanctioned Country or (iv) any individual or entity otherwise the
subject or target of Sanctions.


 


“Sanctions”
means all applicable Laws relating to economic, financial or trade sanctions, including any such Laws administered or enforced
by the U.S. government (including by OFAC or the U.S. Department of State), the United Nations Security Council, the European Union,
the United Kingdom (include by Her Majesty’s Treasury) or any other relevant Governmental Entity that administers or enforces
economic, financial or trade sanctions.


 


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


 


“Second Closing”
has the meaning set forth in Section 2.3(a).


 


“Second Closing
Abandonment” has the meaning set forth in Section 8.4.


 


“Second Closing
Date” has the meaning set forth in Section 2.3(a).


 


“Second Common
Stock” means an amount equal to (i) the aggregate number of shares of Purchased Common Stock minus (ii) the number
of shares of First Common Stock.


 


“Second Purchase
Price” means an amount in cash equal to the product of (i) the number of shares of Second Common Stock multiplied
by (ii) the Per Unit Purchase Price.


 






    7


     


    

 


“Second Warrants”
means Warrants to purchase a number of shares of Common Stock equal to the number of shares of Second Common Stock.


 


“Securities”
means the Purchased Common Stock and the Purchased Warrants (including the shares of Common Stock issuable upon exercise of the
Purchased Warrants), in each case, that will be delivered to Purchaser pursuant to this Agreement.


 


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


 


“Stockholder
Approval” means such approval as may be required by the applicable rules and regulations of the NASDAQ Global Market
(or any successor entity) from the stockholders of the Company with respect to the transactions contemplated by this Agreement
and the other Definitive Documents.


 


“Subsidiary”
means, with respect to any Person, any corporation, partnership, joint venture or other legal entity as to which such Person (either
alone or through or together with any other subsidiary), (a) owns, directly or indirectly, more than fifty percent (50%) of
the stock or other equity interests, (b) has the power to elect a majority of the board of directors or similar governing
body, or (c) has the power to direct the business and policies.


 


“Tax Contest”
means any audit, suit, conference, action, assessment, investigation, claim, administrative or judicial proceeding, or other similar
interaction with a Governmental Entity with respect to any Tax.


 


“Tax Returns”
means any and all reports, returns, declarations, claims for refund, elections, disclosures, estimates, information reports or
returns or statements supplied or required to be supplied to a Governmental Entity in connection with Taxes, including any schedule
or attachment thereto or amendment thereof.


 


“Taxes”
means (i) all taxes, assessments, duties, levies or other similar governmental charges paid or payable to a Governmental Entity,
including all federal, state, local, foreign and other income, franchise, profits, gross receipts, capital gains, capital stock,
transfer, property, sales, use, value-added, occupation, excise, severance, windfall profits, stamp, payroll, social security,
withholding and other taxes, assessments, duties, levies (whether payable directly or by withholding and whether or not requiring
the filing of a return), all estimated taxes, deficiency assessments, additions to tax, penalties and interest thereon, (ii) any
liability for such amounts described in clause (i) as a result of being a member of a combined, consolidated, unitary,
or affiliated group and (iii) any and all liability for the payment of any amounts described above in clauses (i) and (ii) as
a result of any express or implied obligation to indemnify any other person, or any successor or transferee liability. “Taxing”
and “Taxation” each have a correlative meaning.


 


“Termination
Date” has the meaning set forth in Section 8.1(b).


 


“Termination
Fee” has the meaning set forth in Section 8.3.


 


“Voting Agreements”
means the voting agreements to be entered into by the Purchaser and certain stockholders of the Company holding at least a majority
of the outstanding shares of Common Stock as of the date hereof, in substantially the form set forth on Exhibit C hereto.


 






    8


     


    

 


“Warrant Certificate”
means the certificate in substantially the form attached hereto as Exhibit B.


 


“Warrants”
means warrants to purchase shares of Common Stock, at an exercise price of $2.50 per share, represented by and on the terms set
forth herein and in the Warrant Certificate.


 


“Withdrawal
Liability” means the liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such term is defined in Part I of Subtitle E of Title IV of ERISA.


 


Section
1.2           
Construction. In this Agreement, unless the context otherwise requires:


 


(a)              
references to Articles, Sections, Exhibits and Schedules are references to the articles and sections or subsections
of, and the exhibits and schedules attached to, this Agreement;


 


(b)              
references in this Agreement to “writing” or comparable expressions include a reference to a written
document transmitted by means of electronic mail in portable document format (pdf), facsimile transmission or comparable means
of communication;


 


(c)              
words expressed in the singular number shall include the plural and vice versa; words expressed in the masculine
shall include the feminine and neuter gender and vice versa;


 


(d)              
the words “hereof,” “herein,” “hereto” and “hereunder,” and words
of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including all Exhibits and Schedules
attached to this Agreement, and not to any provision of this Agreement;


 


(e)              
the term “this Agreement” shall be construed as a reference to this Agreement as the same may have been,
or may from time to time be, amended, modified, varied, novated or supplemented;


 


(f)               
“include,” “includes” and “including” are deemed to be followed by “without
limitation” whether or not they are in fact followed by such words;


 


(g)              
references to “day” or “days” are to calendar days;


 


(h)              
if the last day for the giving of any notice or the performance of any act required or permitted under this Agreement
is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended
to the next succeeding Business Day;


 






    9


     


    

 


(i)                
references to “the date hereof” or “the date of the Agreement” means the date of this Agreement;


 


(j)                
references to “ordinary course of business” means the ordinary and usual course of normal day-to-day
operations of the Company, consistent with past practices


 


(k)              
the word “or” is disjunctive but not necessarily exclusive;


 


(l)                
unless otherwise specified, references to any Law means such Law as amended from time to time and includes any successor
Law thereto and any rules or regulations promulgated thereunder in effect from time to time; and


 


(m)            
references to “dollars” or “$” refer to currency of the United States of America, unless
otherwise expressly provided.


 


Article
II



PURCHASE AND SALE


 


Section
2.1           
The Purchase and Sale.


 


(a)              
On the terms and subject to the conditions set forth herein, at the First Closing, the Purchaser hereby agrees to
purchase (or cause certain of its Subsidiaries to purchase), and the Company shall sell to Purchaser (or such Subsidiaries) in
exchange for the First Purchase Price, (i) the First Common Stock, free and clear of all Liens and (ii) the First Warrants,
free and clear of all Liens; provided, that, if during the period from the date hereof until and including the First Closing,
the Company issues to any Person any shares of Common Stock or Capital Stock or similar securities convertible into, exchangeable
for or having the right to subscribe for shares of Common Stock at a price per share less than the Per Unit Purchase Price (other
than shares of Common Stock issued upon the exercise of options, warrants or similar securities outstanding as of the date hereof),
the number of First Common Stock and First Warrants issued to the Purchaser at the First Closing will be proportionally and ratably
increased such that the First Common Stock and First Warrants issued to Purchaser will not be affected by any such dilution. Notwithstanding
anything in this Agreement to the contrary, the total number of First Common Stock that may be issued under this Agreement at the
First Closing, including the First Warrants, shall be limited to 2,645,021 shares of Common Stock (the “Exchange Cap”),
which equals 19.99% of the Company’s outstanding shares of Common Stock as of the date hereof. The Exchange Cap shall be
appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar
transaction.


 


(b)              
 On the terms and subject to the conditions set forth herein, at the Second Closing, the Purchaser hereby agrees
to purchase (or cause certain of its Subsidiaries to purchase), and the Company shall sell to Purchaser (or such Subsidiaries)
in exchange for the Second Purchase Price, (i) the Second Common Stock, free and clear of all Liens and (ii) the Second
Warrants, free and clear of all Liens; provided, that, if during the period from the date hereof until and including the
Second Closing, the Company issues to any Person any shares of Common Stock or Capital Stock or similar securities convertible
into, exchangeable for or having the right to subscribe for shares of Common Stock at a price per share less than the Per Unit
Purchase Price (other than shares of Common Stock issued upon the exercise of options, warrants or similar securities outstanding
as of the date hereof), the number of Second Common Stock and Second Warrants issued to the Purchaser at the Second Closing will
be proportionally and ratably increased such that the Second Common Stock and Second Warrants issued to Purchaser will not be affected
by any such dilution.


 






    10


     


    

 


(c)              
The Parties agree that the Common Stock and Warrants to be purchased by Purchaser hereunder shall be issued in reliance
upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act.


 


Section
2.2           
First Closing.


 


(a)               
The closing of the purchase of the First Common Stock and First Warrants (the “First Closing”)
shall take place remotely via the electronic exchange of documents and signatures, or at such other time and place as the Parties
may agree in writing, on the first (1st) Business Day after satisfaction or waiver of the conditions set forth in Section
6.1 and Section 6.2 (other than those conditions that by their terms are to be satisfied at the First Closing, but subject
to the satisfaction or waiver of those conditions). The date on which the First Closing actually occurs shall be referred to herein
as the “First Closing Date.” At the First Closing, the Company shall issue the First Common Stock and First
Warrants to the Purchaser free and clear of all Liens against payment by the Purchaser of the First Purchase Price.


 


(b)              
At the First Closing, the Company shall:


 


(i)                
deliver or cause to be delivered to the Purchaser:


 


(A)            
a certificate of good standing of the Company as of a date no earlier than two (2) Business Days prior to the
First Closing Date;


 


(B)             
the certificate contemplated by Section 6.1(f);


 


(C)             
counterparts to Warrant Certificates representing the full number of First Warrants (as may be adjusted pursuant
to Section 2.1(a));


 


(D)            
an opinion from the Company’s outside legal counsel, dated as of the First Closing Date, in a customary form
reasonably acceptable to Purchaser;


 


(E)             
copies of the resolutions or written consents duly adopted by the Board and certified by the Company’s secretary
authorizing the execution, delivery and performance of this Agreement and the transactions contemplated hereby, including the Charter
Amendment or minutes from a duly convened meeting of the Board at which such matters were authorized;


 


(F)             
counterparts to the Registration Rights Agreement, duly executed by the Company; and


 






    11


     


    

 


(G)            
counterparts to the Investor Rights Agreement, duly executed by the Company;


 


(ii)             
deliver or cause to be delivered any other customary documents or certificates reasonably requested by Purchaser
which are reasonably necessary to give effect to the Closing; and


 


(iii)           
pay, or cause to be paid to Purchaser (which may be set off against the First Purchase Price), any portion of the
Expense Reimbursement then accrued and unpaid.


 


Section
2.3           
Second Closing.


 


(a)               
The closing of the purchase of the Second Common Stock and Second Warrants (the “Second Closing”)
shall take place remotely via the electronic exchange of documents and signatures, or at such other time and place as the Parties
may agree in writing, on the first (1st) Business Day after satisfaction or waiver of the conditions set forth in Section
6.3 and Section 6.4 (other than those conditions that by their terms are to be satisfied at the Second Closing, but
subject to the satisfaction or waiver of those conditions). The date on which the Second Closing actually occurs shall be referred
to herein as the “Second Closing Date.” At the Second Closing, the Company shall issue the Second Common Stock
and Second Warrants to the Purchaser free and clear of all Liens against payment by the Purchaser of the Second Purchase Price.


 


(b)              
At the Second Closing, the Company shall:


 


(i)                
deliver or cause to be delivered to the Purchaser:


 


(A)            
a bring down certificate of good standing of the Company as of a date no earlier than two (2) Business Days
prior to the Second Closing Date;


 


(B)             
the certificate contemplated by Section 6.3(f);


 


(C)             
a certified copy of the Certificate of Incorporation, duly amended to renounce, to the fullest extent permitted by
applicable Law, any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any business
opportunities presented to the officers, directors or stockholders of the Company (the “Charter Amendment”),
or such other document or instrument reasonably satisfactory to the Purchaser confirming that no such interest or expectancy exists;
and


 


(D)            
counterparts to Warrant Certificates representing the full number of Second Warrants (as may be adjusted pursuant
to Section 2.1(b));


 


(ii)             
pay, or cause to be paid to Purchaser (which may be set off against the Second Purchase Price), any portion of the
Expense Reimbursement then accrued and unpaid; and


 






    12


     


    

 


(iii)           
deliver or cause to be delivered any other customary documents or certificates reasonably requested by Purchaser
which are reasonably necessary to give effect to the Closing.


 


Article
III



REPRESENTATIONS AND WARRANTIES OF THE COMPANY


 


Except as set forth in
the SEC Documents filed with the SEC prior to the date hereof and publicly available on the SEC’s Electronic Data Gathering
Analysis and Retrieval system (but excluding any forward-looking disclosures set forth in any “risk factors” section,
any disclosures in any “forward-looking statements” section and any other disclosures included therein to the extent
they are predictive or forward-looking in nature), the Company hereby represents and warrants to the Purchaser as of the date hereof,
as of the First Closing, and as of the Second Closing, as follows:


 


Section
3.1           
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized, validly
existing and in good standing under the Laws of the jurisdiction in which they are formed, and each has the requisite power and
authority to own its properties and to carry on its business as now being conducted and as presently proposed to be conducted.
Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing
in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in good standing would not, individually or in the aggregate,
have a Material Adverse Effect. Other than the Persons set forth on Exhibit 21.1 to the Company’s Annual Report on Form
10-K, filed with the SEC on March 11, 2020, the Company has no Subsidiaries and does not own Capital Stock in any other Person.


 


Section
3.2           
Authorization; Enforcement; Validity. Subject to the Stockholder Approval, the Company has the requisite power and
authority to enter into and perform its obligations under the Agreement and the other Definitive Documents, to consummate the
transaction contemplated hereby and thereby and to issue the Securities in accordance with the terms hereof and thereof. The execution
and delivery of the Agreement and the other Definitive Documents by the Company, and the consummation by the Company of the transactions
contemplated hereby and thereby (including the issuance of the Securities and the reservation for issuance and issuance of Common
Stock issuable upon the exercise of the Warrants in accordance with, and pursuant to, the Warrant Certificate) have been duly
authorized by the Company, and such authorization has not been, and as of the Closing will not have been, subsequently rescinded
or modified in any way, and, no further filing, consent or authorization is or will be required to be made by or on behalf of
the Company, its Subsidiaries and their respective boards of directors, stockholders or other governing bodies in connection with
the transactions contemplated by the Definitive Documents. The Agreement has been, and the other Definitive Documents to which
the Company is a party will be, prior to the First Closing or Second Closing, as applicable, duly executed and delivered by the
Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by applicable
federal or state securities Law (the “General Enforceability Exceptions”).


 






    13


     


    

 


Section
3.3           
Issuance of Securities. The issuance of the Securities is duly authorized, and upon issuance in accordance with
the terms of the Definitive Documents will be validly issued, fully paid and non-assessable (to the extent such concepts are applicable)
and free and clear of all Liens. The issuances of the Securities in connection with the transactions contemplated by the Definitive
Documents are in compliance, in all respects, with all applicable Laws, and the Securities are not subject to, and will not be
issued in violation of, any purchase options, call options, rights of first refusal, preemptive rights, subscription rights or
any similar rights under applicable Law, the Company Organizational Documents or any Contract to which the Company or any of its
Subsidiaries is a party or by which it is bound. Subject to the accuracy of the representations and warranties of the Purchaser
set forth in Article IV, the offer and issuance by the Company of the Securities is exempt from registration under the Securities
Act. As of the First Closing, the Company will have reserved from its duly authorized Capital Stock the maximum number of shares
of Common Stock authorized under its Certificate of Incorporation that are available after giving effect to shares of Common Stock
reserved for issuance or issuable upon the exercise of the Purchased Warrants. Upon the issuance of Common Stock following an
exercise of the Purchased Warrants in accordance with the Warrant Certificate, such Common Stock, when issued, will be validly
issued, fully paid and non-assessable and free and clear of all Liens, with the holders thereof being entitled to all rights accorded
to a holder of Common Stock.


 


Section
3.4           
No Conflicts. The execution, delivery and performance of this Agreement and the other Definitive Documents by the
Company and the consummation by the Company of the transactions contemplated hereby and thereby (including the issuance of the
Securities and the reservation for issuance and issuance of Common Stock issuable upon the exercise of the Purchased Warrants
in accordance with the Warrant Certificate) will not (i) result in a violation of the Certificate of Incorporation, Bylaws, certificate
of formation, memorandum of association, articles of association or other organizational documents of the Company or any of its
Subsidiaries (collectively, the “Group Companies Organizational Documents”), (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any Material Contract, indenture or instrument to which
the Company or any of its Subsidiaries is a party, or (iii) result in a material violation of any Law (including, for the avoidance
of doubt, foreign, federal and state securities Laws and the rules and regulations of the NASDAQ Global Market) or Order that
would be material to the business of the Company and its Subsidiaries taken as a whole.


 


Section
3.5           
Consents. Except as set forth in Section 5.7(c), neither the Company nor any of its Subsidiaries is required
to obtain any consent from, authorization or order of, or make any filing or registration with any Governmental Entity or any
regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective
obligations under or contemplated by this Agreement or the other Definitive Documents, in each case, in accordance with the terms
hereof and thereof. To the Company’s Knowledge, no facts or circumstances exist which might prevent the Company or any of
its Subsidiaries from obtaining or effecting any of the registrations, applications or filings contemplated by the Definitive
Documents.


 






    14


     


    

 


Section
3.6           
No General Solicitation; Agents’ Fees. Neither the Company, nor any of its Subsidiaries, Affiliates, Representatives
or any other Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offer or sale of the Securities. No placement agent’s fees, financial
advisory fees, or brokers’ commissions or fees or any similar fees are or will be owed or payable to any Person in connection
with transactions contemplated by the Definitive Documents. Neither the Company nor any of its Subsidiaries has engaged any placement
agent or other agent in connection with the offer or sale of the Securities. The Company further acknowledges that Purchaser is
not acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect
to the Definitive Documents and the transactions contemplated thereby and that the Company’s decision to enter into the
Definitive Documents to which it is a party has been based solely on the independent evaluation by the Company and its Representatives.


 


Section
3.7           
Application of Takeover Protections; Rights Agreement. Prior to the First Closing, the Company and its board of
directors will have taken all necessary actions, if any, in order to comply with or obtain waivers in connection with any control
share acquisition, interested stockholder, business combination, poison pill (including any distribution under a rights agreement),
stockholder rights plan or other similar anti-takeover provision under any of the Group Companies Organizational Documents or
the Laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to Purchaser as a result of
the transactions contemplated by the Definitive Documents, including the Company’s issuance of the Securities and ownership
by the Purchaser of the Securities. The Company and the Board have taken all necessary action, if any, in order to render inapplicable
any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock
or a change in control of the Company or any of its Subsidiaries.


 


Section
3.8           
SEC Documents; Financial Statements.


 


(a)              
The Company (including its predecessors) has timely filed all reports, schedules, forms, proxy statements, statements
and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act or the Securities
Act (all of the foregoing filed since January 1, 2018, or for such shorter period that the Company was required to file such reports,
and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated
by reference therein being hereinafter referred to as the “SEC Documents”). The Company has delivered or has
made available to Purchaser true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As
of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act, the rules
and regulations of the SEC promulgated thereunder and the rules and regulations of the NASDAQ Global Market, in each case, applicable
to the SEC Documents, and none of the SEC Documents contains any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. None of the Company’s Subsidiaries is subject to the periodic reporting requirements
of the 1934 Act. There are no outstanding or unresolved comments in comment letters from the SEC staff with respect to any of the
SEC Documents. To the Company’s Knowledge, no SEC Document is the subject of ongoing SEC review or outstanding SEC investigation.


 






    15


     


    

 


(b)              
As of their respective dates, the audited and unaudited financial statements of the Company and its predecessors
included in the SEC Documents (including, in each case, the notes thereto, the “Financial Statements”), complied
in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect
thereto as in effect as of the time of filing. The Financial Statements have been prepared in accordance with GAAP (except (i)
as may be otherwise indicated in such Financial Statements or the notes thereto, or (ii) in the case of unaudited interim statements,
to the extent they may exclude footnotes or may be condensed or summary statements), and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either
individually or in the aggregate). The Company is not currently contemplating to amend or restate any of the Financial Statements
(including any notes or any letter of the independent accountants of the Company with respect thereto), nor, to the Company’s
Knowledge, do there exist any facts or circumstances which would require the Company to amend or restate any of the Financial Statements,
in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the
SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any
of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.


 


(c)              
The Company maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under
the 1934 Act) that are effective to provide reasonable assurances regarding the reliability of the financial reporting and the
preparation of financial statements of the Company and its Subsidiaries for external purposes in accordance with GAAP, and includes
those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company, (ii) transactions are recorded as necessary to permit preparation
of financial statements and (iii) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance
with authorizations of management and directors of the Company. The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed
by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within
the time periods specified in the rules and forms of the SEC, including controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated
to the Company’s management, including its principal executive officer or officers and its principal financial officer or
officers, as appropriate, to allow timely decisions regarding required disclosure. Neither the Company nor any of its Subsidiaries
has received any notice or correspondence from any accountants, Governmental Entities or other Person relating to (x) any potential
material weakness or significant deficiency in any part of the internal controls over financial reporting of the Company or any
of its Subsidiaries or (y) any fraud, whether or not material, that involves (or involved) the management or other employees of
the Company or its Subsidiaries who have (or had) a significant role in the Company’s or its Subsidiaries’ internal
controls.


 






    16


     


    

 


(d)              
There is no transaction, arrangement, or other relationship between the Company 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 1934 Act filings and is
not so disclosed or that otherwise would have a Material Adverse Effect.


 


(e)              
There are no material disagreements of any kind presently existing or, to the Company’s Knowledge, reasonably
anticipated to arise between the Company and any of its Subsidiaries, on the one hand, and the accountants and lawyers formerly
or presently engaged by the Company (including its predecessors) and any of Subsidiaries thereof, on the other hand, and the Company
and each of its Subsidiaries is current with respect to any fees owed to its respective accountants and lawyers which, the failure
to pay could affect the Company’s ability to perform any of its obligations under any of the Definitive Documents.


 


Section
3.9           
Absence of Certain Changes. Since December 31, 2019 (the “10-K Date”), no Material Adverse Effect
has occurred, and there has not been, and there does not exist, any Effect that would reasonably be expected to have a Material
Adverse Effect. Since the 10-K Date, neither the Company nor any of its Subsidiaries has taken any action that if taken after
the date hereof would require the consent of the Purchaser pursuant to Section 5.1(b). Neither the Company nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any applicable Law relating to bankruptcy, insolvency, reorganization,
receivership, liquidation or winding up, nor does the Company or any Subsidiary have any Knowledge or reason to believe that any
of their respective creditors intend to initiate involuntary bankruptcy proceedings or any Knowledge of any fact which would reasonably
lead a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof,
and, after giving effect to the transactions contemplated by the Definitive Documents, will not be, Insolvent. Neither the Company
nor any of its Subsidiaries has engaged in any business or in any transaction, and does not plan to engage in any business or
in any transaction, for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital
with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.


 


Section
3.10        Conduct
of Business; Regulatory Permits.


 


(a)              
Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under the Group Companies
Organizational Documents. Neither the Company (including its predecessors) nor any Subsidiaries thereof (i) is, or has been since
January 1, 2017, in violation of any applicable Law or Order applicable thereto or (ii) has received since January 1, 2017 a notification
or communication from any Governmental Entity asserting that it is not or has not been in compliance with any applicable Law or
Order, except which could not reasonably be expected to result in a Material Adverse Effect. Without limiting the generality of
the foregoing, the Company is not in material violation of any of the rules, regulations or requirements of the NASDAQ Global Market,
and has no Knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of trading the Common
Stock by the NASDAQ Global Market. Since January 1, 2017, (i) the Common Stock has been listed or designated for quotation on the
NASDAQ Global Market, (ii) trading in the Common Stock has not been suspended by the SEC or the NASDAQ Global Market and (iii)
the Company has received no communication, written or oral, from the SEC or the NASDAQ Global Market regarding the suspension or
delisting of the Common Stock from the NASDAQ Global Market. The Company and each of its Subsidiaries possess all licenses, certificates,
authorizations and permits issued by the appropriate Governmental Entity necessary to conduct their respective businesses, and
neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of
any such license, certificate, authorization or permit, except to the extent that the failure to possess all such licenses, certificates,
authorizations and permits would not, individually or in the aggregate, have a Material Adverse Effect. There is no Contract or
Order binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which,
individually or together with any other Contract or Order, has had or would reasonably be expected to have the effect of prohibiting
or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company
or any of its Subsidiaries.


 






    17


     


    

 


(b)              
The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken
no action designed to, or which to its Knowledge is likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.
The Company has not, since January 1, 2020, received notice from the NASDAQ Global Market to the effect that the Company is not
in compliance with the listing or maintenance requirements of the NASDAQ Global Market. The Company is, and has no reason to believe
that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The
Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing
corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing
corporation) in connection with such electronic transfer.


 


Section
3.11        Certain
Regulatory Matters.


 


(a)              
None of the Company (including its predecessors), any Subsidiaries thereof or any of their respective directors,
officers, or other Representatives (individually and collectively, a “Company Affiliate”) have violated the
U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption Law,
nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of, any money, or offered, given, promised
to give, or authorized the giving of, anything of value, to any officer, employee or any other person acting in an official capacity
for any Governmental Entity or any political party or official thereof or to any candidate for political office (individually and
collectively, a “Government Official”) or to any Person under circumstances in which such Company Affiliate
knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised,
directly or indirectly, to any Government Official, for the purpose of: (i) (A) influencing any act or decision of such Government
Official in his/her official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her
lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official to influence or affect any act or decision
of any Governmental Entity; or (ii) assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or
directing business to, the Company or its Subsidiaries.


 






    18


     


    

 


(b)              
The Company has in place policies, procedures and controls that ensure compliance with the (i) FCPA and (ii) other
applicable anti-bribery or anti-corruption laundering Laws in each foreign jurisdiction in which the Company does business.


 


(c)              
No Company Affiliate or any other business entity or enterprise with which the Company or any Subsidiary is or has
been Affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property,
or services, whether or not in contravention of applicable Law, (i) as a kickback, bribe gratuity, lobbying expenditure, political
contribution or contingent fee payment to any Person or (ii) to any political organization, or to the holder of or any aspirant
to any elective or appointive public office except for personal political contributions not involving the direct or indirect use
of funds of the Company or any of its Subsidiaries.


 


(d)              
The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of
2001 and all other applicable U.S. and non-U.S. anti-money laundering Laws and regulations and Sanctions, including the Laws, executive
orders and sanctions programs administered by OFAC. No Company Affiliate (x) is a Sanctioned Person or has any reason to believe
that it is acting on behalf of, or for the benefit of, any Sanctioned Person or (y) has engaged in any dealings with or the benefit
of any Sanctioned Person, or in or involving any Sanctioned Country.


 


(e)              
Since January 1, 2017, no allegations of sexual harassment have been made to the Company (including its predecessors)
or any Subsidiaries thereof against any individual in his or her capacity as director or a managerial employee, or to the Company’s
Knowledge, any other employee, of the Company (including its predecessors) or any Subsidiaries thereof.


 


Section
3.12        Sarbanes-Oxley
Act. The Company and each of its Subsidiaries is in material compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.


 


Section
3.13        Transactions
With Affiliates. There have not been any transactions or Contracts or series of related transactions or Contracts required to
be disclosed under Item 404 of Regulation S-K under the 1934 Act.


 


Section
3.14        Capitalization


 


(a)              
As of the date hereof, the authorized Capital Stock of the Company consists of 125,000,000 shares of Common Stock,
of which 13,291,563 are issued and outstanding, and 10,000,000 share of preferred stock, of which none are issued and outstanding.
No shares of Common Stock are held in the treasury of the Company. Except for the foregoing Capital Stock, the Company has no other
Capital Stock authorized, reserved for issuance or outstanding.


 


(b)              
All of the Company’s outstanding Capital Stock is duly authorized and validly issued, fully paid and non-assessable
(as such concepts are applicable). All the outstanding shares of Capital Stock of each Subsidiary of the Company have been validly
issued and are fully paid and non-assessable (to the extent such concepts are applicable) and are owned, directly or indirectly,
by the Company free and clear of all Liens.


 






    19


     


    

 


(c)              
(A) None of the Company’s or any of its Subsidiaries’ Capital Stock is subject to preemptive rights or
any other similar rights or restrictions or Liens suffered or permitted by the Company or any Subsidiary; (B) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, or exercisable or exchangeable for, any Capital Stock of the Company or any of its Subsidiaries, or Contracts
by which the Company or any of its Subsidiaries is or may become bound to issue additional Capital Stock of the Company or any
of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock of the Company or any of its
Subsidiaries; (C) there are no Contracts under which the Company or any of its Subsidiaries is obligated to register the sale of
any of their securities under the Securities Act; (D) there are no outstanding securities or instruments of the Company or any
of its Subsidiaries which contain any redemption or similar provisions, and there are no Contracts, commitments, understandings
or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; (E) there are no securities or instruments or Capital Stock containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; (F) neither the Company nor any Subsidiary has any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement; and (G) there are no stockholder agreements,
voting trusts or other agreements to which the Company or any of its Subsidiaries is a party or by they are bound relating to the
voting of any shares, interests or Capital Stock of the Company or any of its Subsidiaries.


 


(d)              
True, correct and complete copies of the Company Organizational Documents, and the terms of all convertible securities
and the material rights of the holders thereof in respect thereto, are set forth in, or filed as exhibits to the SEC Documents.


 


Section
3.15        Indebtedness.
Neither the Company nor any of its Subsidiaries has any outstanding Indebtedness.


 


Section
3.16        Material
Contracts. Neither the Company nor any of its Subsidiaries is party to, and none of their respective properties or assets are bound
by, a Material Contract. Each Material Contract set forth in the SEC Documents is in full force and effect, and is a legal, valid
and binding agreement of the Company or its Subsidiaries, as applicable, and, to the Company’s Knowledge, the other parties
thereto, subject only to the General Enforceability Exceptions. There is no material default or breach by the Company or any of
its Subsidiaries, as applicable, with respect to any such Material Contract or, to the Company’s Knowledge, any other party
thereto, and no event has occurred which, with notice or lapse of time or both, would constitute a material breach or default or
would permit termination, material modification or acceleration thereof by any party to such Material Contract. Neither the Company
nor any of its Subsidiaries has waived any material rights under any such Material Contract. Neither the Company nor any of its
Subsidiaries has received written notice of the intention of any third party under any such Material Contract to cancel, terminate
or materially modify the terms of any such Material Contract, or accelerate the obligations of the Company or any of its Subsidiaries,
as applicable, thereunder. There are no current or pending financing arrangements or assignments of proceeds with respect to any
such Material Contract.


 






    20


     


    

 


Section
3.17        Litigation.
Except as would not, individually or in the aggregate, have a Material Adverse Effect, there is no, and since January 1, 2017
there has not been, any Action before or by the NASDAQ Global Market, any court, public board, other Governmental Entity, self-regulatory
organization or body pending or, to the Knowledge of the Company, threatened against or affecting the Company (including its predecessors)
or any of Subsidiaries thereof, the Capital Stock thereof or any current or former officers, directors, managers or employees
thereof, whether of a civil or criminal nature or otherwise, in their capacities as such. To the Knowledge of the Company, no
current or former director, officer, manager or employee of the Company (including its predecessors) or any of its Subsidiaries
has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation. Without limitation
of the foregoing, there has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation
by the SEC involving the Company (including its predecessors), any Subsidiaries thereof or any current or former director, officer,
manager of employee of the Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company under the Securities Act or the 1934 Act. To the Company’s
Knowledge, no fact exists which might result in or form the basis for any such Action. Neither the Company nor any of its Subsidiaries
is subject to any Order.


 


Section
3.18        Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts, in each case, as is customary in the businesses in which the Company and its Subsidiaries are engaged.
All premiums due and payable in respect of such insurance policies maintained by the Company and its Subsidiaries have been paid
in full. Neither the Company nor any of its Subsidiaries have been refused any insurance coverage sought or applied for, and neither
the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business
on substantially the same terms as now in effect. Excluding insurance policies that have expired and been replaced in the ordinary
course of business, no such insurance policy of the Company or any of its Subsidiaries has been, or has been threatened to be,
cancelled by the applicable insurer since January 1, 2017, and neither the Company nor any of its Subsidiaries has received any
written notice of cancellation or non-renewal of any such insurance policy.


 


Section
3.19        Employee
Relations. The Company and each of its Subsidiaries maintains good relationships with their respective employees. No executive
officer (as defined in Rule 501(f) promulgated under the Securities Act) or other key employee of the Company or any of its Subsidiaries
has notified the Company or the applicable Subsidiary that such executive officer or key employee intends to terminate, or materially
amend the terms of, its employment with the Company or the applicable Subsidiary. To the Company’s Knowledge, no executive
officer or other key employee of the Company or any of its Subsidiaries is or will be (with or without the passage of time, or
both), in violation of any material term of any employment Contract, confidentiality, disclosure or proprietary information Contract,
non-competition Contract or any other Contract, or any restrictive covenant, and the continued employment of each such executive
officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any material liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable federal,
state, local and foreign Laws respecting labor, employment and employment practices and benefits, terms and conditions of employment
and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, result in a
Material Adverse Effect. There are no strikes or other labor disputes against the Company or any of its Subsidiaries, and, to
the Knowledge of the Company, there are no strikes or other labor disputes threatened against the Company or any of its Subsidiaries.


 






    21


     


    

 


Section
3.20        Title.


 


(a)              
The Company and each of its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries, as applicable (the “Real
Property”). The Real Property is free and clear of all Liens and is not subject to any rights of way, building use restrictions,
exceptions, variances, reservations, or limitations of any nature except for (a) Liens for current Taxes not yet due for which
adequate reserves (as determined in accordance with the GAAP) have been established on the Financial Statements, (b) zoning Laws
and other land use restrictions that do not, and will not (with or without the passage of time, or both) impair the present or
anticipated use of the Real Property subject thereto, and (c) mechanics’, carriers’, workmen’s, warehousemen’s,
repairmen’s or other statutory liens arising in the ordinary course of business that would not reasonably be expected to
have a Material Adverse Effect. Each Real Property held under lease by the Company or any of its Subsidiaries is held by the Company
or its applicable Subsidiary under a valid, subsisting and enforceable leases with such exceptions as are not material and do not
interfere with the current and anticipated use made and proposed to be made of such Real Property and buildings by the Company
or any of its Subsidiaries, as applicable.


 


(b)              
Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in, the
tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by the
Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The
Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they
are being put, are not in need of maintenance or repairs, except for routine maintenance and repairs in the ordinary course of
business, and are sufficient, in all material respects, for the conduct of the Company’s and its Subsidiaries’ businesses
as currently conducted. The Company and its Subsidiaries collective own all of the Fixtures and Equipment free and clear of all
Liens except for (a) Liens for current Taxes not yet due for which adequate reserves (as determined in accordance with GAAP) have
been established on the Financial Statements, (b) zoning Laws and other land use restrictions that do not impair the present or
anticipated use of the Fixtures and Equipment subject thereto, (c) mechanics’, carriers’, workmen’s, warehousemen’s,
repairmen’s or other statutory liens arising in the ordinary course of business that would not reasonably be expected to
have a Material Adverse Effect and (d) minor liens that have arisen in the ordinary course of business and that do not, individually
or in the aggregate, materially detract from the value of the assets or properties subject thereto or materially impair the operations
of the Company or its any of Subsidiaries.


 






    22


     


    

 



 


Section
3.21        Intellectual
Property Rights.


 


(a)              
The Company and its Subsidiaries collectively own or possess good and marketable title to, or valid licenses to use,
all trademarks, trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property
rights and all applications and registrations therefor (“Intellectual Property Rights”) necessary to conduct
their respective businesses as now conducted and presently proposed to be conducted in all material respects. None of the Company’s
material Intellectual Property Rights have expired or have been terminated or abandoned, or are expected to expire, or to be terminated
or abandoned, in each case, within three (3) years from the date of the Agreement, except any such Intellectual Property Rights
that would not, individually or in the aggregate, have a Material Adverse Effect. The Company does not have any Knowledge of any
infringement, misappropriate or violation by the Company or its Subsidiaries of Intellectual Property Rights of others.


 


(b)              
Subject to the license and collaboration agreement with Zai Lab (Shanghai) Co., Ltd., the Company is the exclusive
owner of the entire right, title and interest in and to durlobactam (formerly ETX2514), sulbactam-durlobactam (SUL-DUR, formerly
ETX2514SUL) and ETX0282CPDP (collectively, the “Products”), and is the exclusive owner of the entire right,
title and interest in and to, or has licensed or has the right to license all Intellectual Property Rights in the Products, all
data associated therewith, and all Intellectual Property Rights covering or relating to the Products, free and clear of all liens.
To the Company’s Knowledge, all patents owned or controlled by the Company that have been issued or granted by the appropriate
patent office are valid and enforceable.


 


(c)              
Subject to the terms of the July 2017 collaboration agreement between the Company and the Global Antibiotic Research
and Development Partnership (“GARDP”), the Company is the exclusive owner of the entire right, title and interest
in and to zoliflodacin, and is the exclusive owner of the entire right, title and interest in and to, or has licensed or has the
right to license all Intellectual Property Rights in zoliflodacin, all data associated therewith, and all Intellectual Property
Rights covering or relating to zoliflodacin, free and clear of all liens. To the Company’s Knowledge, all patents owned or
controlled by the Company that have been issued or granted by the appropriate patent office are valid and enforceable.


 


(d)              
There is no action which has been brought, or to the Knowledge of the Company, being threatened, against the Company
or any of its Subsidiaries regarding its Intellectual Property Rights, except such as would not, if determined adversely to the
Company or any of its Subsidiaries, individually or in the aggregate, have a Material Adverse Effect. To the Knowledge of the Company,
there are no facts or circumstances which might give rise to any actions regarding the Company’s Intellectual Property Rights.


 


(e)              
To the Company’s Knowledge, the manufacture, use, offer for sale, sale and/or importation of any of the Products
or zoliflodacin will not infringe any patent or other Intellectual Property Rights of any third party. Neither Company nor any
of its Subsidiaries has received written or oral notice of any action, suit or proceeding that claims, that the development, manufacture,
use, marketing, sale, offer for sale, importation or distribution of any Product or zoliflodacin would infringe on Intellectual
Property Rights of any third party.


 






    23


     


    

 


(f)               
The Company is in material compliance with all terms of and obligations under its March 2017 and October 2017 funding
agreements with the Trustees of Boston University, as amended in September 2019 (the “CARB-X Agreements”) to
utilize funds from the U.S. government through the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X)
program, and has not breached and is not in default under any provision of the CARB-X Agreements.


 


(g)              
To the Knowledge of the Company, no event has occurred that would give the Trustees of Boston University or CARB-X
the right to unilaterally terminate the CARB-X Agreements. The Company has not received any notice of an intention by the Trustees
of Boston University or CARB-X to terminate the CARB-X Agreements, and the Company has not agreed with the Trustees of Boston University
or CARB-X to terminate the CARB-X agreements in whole or in part.


 


(h)              
The Company is in material compliance with all terms of and obligations under its April 2018 license and collaboration
agreement with Zai Lab (Shanghai) Co., Ltd. (“the Zai Lab Agreement”) regarding durlobactam and sulbactam-durlobactam,
and has not breached and is not in default under any provision of the Zai Lab Agreement.


 


(i)                
To the Knowledge of the Company, no event has occurred that would give Zai Lab the right to unilaterally terminate
the Zai Lab Agreement. The Company has not received any notice of an intention by Zai Lab to terminate the Zai Lab Agreement, and
the Company has not agreed with Zai Lab to terminate the Zai Lab Agreement in whole or in part.


 


(j)                
The Company is in material compliance with all healthcare laws and regulations.


 


(k)              
The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their Intellectual Property Rights. In the past five years, the Company and its Subsidiaries have not: (i)
experienced any actual, alleged or suspected data breach or other security incident or (ii) been subject to or received any notice
of any audit, investigation, complaint, or other claim concerning the violation of any data protection laws.


 


Section
3.22        Environmental
Laws.


 


(a)              
The Company (including its predecessors) and Subsidiaries thereof (A) are, and since January 1, 2017 have been, in
compliance with any and all Environmental Laws (as defined below), and neither the Company nor any of its Subsidiaries has received
any written communication alleging that the Company is in violation of, or has any liability under, any Environmental Law, (B)
have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the
foregoing clauses (A), (B) and (C), the failure to so comply would not have, individually or in the aggregate, a Material Adverse
Effect.


 


(b)              
No Hazardous Materials (i) have been disposed of or otherwise released from any currently or formerly owned Real
Property of the Company (including its predecessors) or any Subsidiaries thereof in violation of any Environmental Laws; and (ii)
are, to the Company’s Knowledge, present on, over, beneath, in or upon any Real Property or any portion thereof in quantities
that would constitute a violation of any Environmental Laws.


 






    24


     


    

 


Section
3.23        Tax
Status. The Company and each of its Subsidiaries (i) has filed all Tax Returns required by any jurisdiction to which it is subject,
(ii) has paid all Taxes and other governmental assessments and charges (including satisfying its withholding tax obligations)
levied or imposed on their properties, income or assets or otherwise due and payable, except those being contested in good faith
for which adequate reserves (as determined in accordance with the GAAP) have been established on the Financial Statements and
(iii) has set aside on its books provision reasonably adequate for the payment of all Taxes for periods subsequent to the periods
to which such Tax Returns apply, except in case of (i) and (ii), where the failure to file or pay would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. There are no unpaid Taxes claimed to be due and payable by
the Taxing authority of any jurisdiction, and, to Knowledge of the Company, no facts or circumstances exist of that would be the
basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company,
as defined in Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”).


 


Section
3.24        Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” 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.


 


Section
3.25        U.S.
Real Property Holding Corporation. The Company (including its predecessors) and all Subsidiaries thereof is not, has not ever
been, and, for so long as any of the Securities are held by the Purchaser, shall not become, a U.S. real property holding corporation
within the meaning of Section 897 of the Code.


 


Section
3.26        Registration
Eligibility. The Company is, and from and after the First Closing will be, eligible to register the Registrable Securities (as
defined in the Registration Rights Agreement) for resale by the Purchaser using Form S-3 promulgated under the 1933 Act.


 


Section
3.27        Transfer
Taxes. On the Second Closing Date, all stock transfer or other Taxes (other than income or similar Taxes) which are required to
be paid in connection with the issuance, sale and transfer of the Securities to be sold to Purchaser pursuant to this Agreement
will be, or will have been, fully paid or provided for by the Company, and all Laws imposing such Taxes will be or will have been
complied with in all material respects.


 


Section
3.28        Shell
Company Status. The Company is not an issuer identified in, and subject to, Rule 144(i).


 






    25


     


    

 


Section
3.29        ERISA
Compliance.


 


(a)              
Each Plan is in material compliance with the applicable provisions of ERISA, the Code and other applicable federal
or state Laws.


 


(b)              
(i) No ERISA Event has occurred for which the Company, any of its Subsidiaries or any of their respective ERISA Affiliates
has any residual liability; and (ii) no ERISA Event is expected to occur, except as would not reasonably be expected, individually
or in the aggregate, to result in a Material Adverse Effect.


 


(c)              
At no time since April 1, 2016 or otherwise, to the Company’s Knowledge during the past six (6) years, has
the Company (including its predecessors) or any member of the “Controlled Group” thereof (defined as any organization
which is a member of a controlled group of organizations within the meaning of Code Sections 414(b), (c), (m) or (o)) maintained,
sponsored or contributed to, or been obligated to contribute to (i) any retirement plan which is subject to Title IV of ERISA or
Section 412 of the Code or (ii) any Multiemployer Plan.


 


Section
3.30        Management.
Since January 1, 2017, no current or former officer or director or, to the Knowledge of the Company, no current ten percent (10%)
or greater stockholder of the Company (including its predecessors) or any Subsidiaries thereof has been the subject of:


 


(a)              
a petition under applicable bankruptcy Laws or any other applicable insolvency or moratorium Law or the appointment
by a court of a receiver, fiscal agent or similar officer for such Person, or any partnership in which such person was a general
partner, or any corporation or business association of which such person was an executive officer;


 


(b)              
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations
that do not relate to driving while intoxicated or driving under the influence);


 


(c)              
any Order that has not subsequently reversed, suspended or vacated, permanently or temporarily enjoining any such
person from, or otherwise limiting, the following activities:


 


(i)                
engaging in any particular type of business practice; or


 


(ii)             
engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with
any violation of securities Laws or commodities Laws;


 


(d)              
any Order that has not been subsequently reversed, suspended or vacated, barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;


 


(e)              
a finding by a Governmental Entity in a civil Action or by the SEC or other authority to have violated any securities
Laws or decrees, and the judgment in such civil Action or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or


 






    26


     


    

 


(f)               
a finding by a Governmental Entity in a civil Action or by the Commodity Futures Trading Commission to have violated
any federal commodities Laws, and the judgment in such civil Action or finding has not been subsequently reversed, suspended or
vacated.


 


Section
3.31        FDA.
There is no pending, completed or, to the Company's Knowledge, threatened, action (including any lawsuit, arbitration, or legal
or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries,
and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA
or any other Governmental Entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses
of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any
Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders
the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical
hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company
or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or
any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its
Subsidiaries. The properties, business and operations of the Company have been and are being conducted in all material respects
in accordance with all applicable laws, rules and regulations of the FDA.


 


Section
3.32        Stock
Option Plans. Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock option
plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such
stock option would be considered granted under GAAP and applicable Law. No stock option granted under the Company’s stock
option plan has been backdated. The Company has not granted, and there is no and has not been any policy or practice of the Company
to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or
other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.


 


Section
3.33        No
Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the Securities
Act, none of the Company, any of its predecessors, any Affiliated issuer, any director, executive officer, other officer of the
Company participating in the offering of the Securities contemplated by this Agreement, or to the Company’s Knowledge, 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 (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
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 a Disqualification Event covered by Rule 506(d)(2) or (d)(3).
The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to Purchaser
a copy of any disclosures provided thereunder. The Company is not aware of any Person that has been or will be paid (directly
or indirectly) remuneration for solicitation of Purchaser or other potential purchasers in connection with the sale of the Securities
contemplated by this Agreement.


 






    27


     


    

 


Section
3.34        No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in this Agreement,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require
the registration of any such securities under the Securities Act or (ii) any applicable stockholder approval provisions of the
NASDAQ Global Market.


 


Section
3.35        Regulation
M Compliance. The Company has not, and to its Knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases
of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any
other securities of the Company.


 


Section
3.36        Proxy
Statement. None of the information in the Proxy Statement will, on the date it is filed, on the date it is first mailed to the
stockholders of the Company and at the time of the Special 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 the light of the
circumstances under which they are made, not misleading. The Proxy Statement will, at the time of the Special Meeting, comply
as to form in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder.


 


Section
3.37        Specified
Contract. The Contract set forth on Schedule 3.37 has been terminated and is of no further force and effect, with no ongoing liabilities
or obligations of the Company, other than customary indemnification and expense reimbursement obligations.


 


Article
IV



REPRESENTATIONS AND WARRANTIES OF THE PURCHASER


 


Purchaser hereby represents
and warrants as of the date hereof, as of the First Closing, and as of the Second Closing, as follows:


 


Section
4.1           
Organization. Purchaser is a corporation duly incorporated, validly existing and in good standing under the Laws
of the State of Delaware.


 


Section
4.2           
Organizational Power and Authority. Purchaser has the requisite corporate power and authority to enter into, execute
and deliver this Agreement and to perform its obligations hereunder and has taken or will take all necessary corporate action
required for the due authorization, execution, delivery and performance by it of this Agreement and the transactions contemplated
hereby.


 


Section
4.3           
Execution and Delivery. This Agreement has been validly executed and delivered by Purchaser, and, assuming due and
valid execution and delivery hereof by the Company, will constitute valid and legally binding obligations of Purchaser, enforceable
against Purchaser in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar Laws limiting creditors’ rights generally or by equitable remedies (regardless of whether enforceability
is considered in a proceeding at law or in equity).


 






    28


     


    

 


Section
4.4           
No Conflict. The execution and delivery by Purchaser of this Agreement and the consummation of the transactions
contemplated hereby (a) will not conflict with, or result in a breach, modification, termination or violation of, any of
the terms or provisions of, or constitute a default under (with or without notice or lapse of time or both), or result in the
acceleration of, or the creation of any Lien under, any Contract to which Purchaser is party or is bound or to which any of the
property or assets of Purchaser are subject, (b) will not result in any violation of the provisions of the certificate of
incorporation or bylaws of Purchaser, and (c) will not result in any material violation of any Law or Order applicable to
Purchaser or any of its properties, except in each of the cases described in clauses (a) through (c), for any conflict, breach,
modification, termination, violation, default, acceleration or Lien which would not reasonably be expected, individually or in
the aggregate, to prohibit or materially and adversely impact Purchaser’s performance of its obligations under this Agreement.


 


Section
4.5           
Consents and Approvals. No consent, approval, authorization, Order, registration or qualification of or with any
Governmental Entity having jurisdiction over Purchaser or any of its properties is required for the execution and delivery by
Purchaser of this Agreement, the compliance by Purchaser with the provisions hereof and the consummation of the transactions contemplated
hereby, except any consent, approval, authorization, Order, registration or qualification which, if not made or obtained, would
not reasonably be expected, individually or in the aggregate, to prohibit or materially and adversely impact Purchaser’s
performance of its obligations under this Agreement.


 


Section
4.6           
No Registration. Purchaser understands that (a) the Purchased Common Stock and Purchased Warrants (including
any shares of Common Stock issuable upon exercise thereof) have not been registered under the Securities Act by reason of a specific
exemption or exclusion from the registration provisions of the Securities Act, the availability of which depends on, among other
things, the bona fide nature of the investment intent and the accuracy of Purchaser’s representations as expressed herein
or otherwise made pursuant hereto and (b) the foregoing securities cannot be sold unless subsequently registered under the
Securities Act or an exemption or exclusion from registration is available.


 


Section
4.7           
Purchasing Intent. Purchaser is acquiring the Purchased Common Stock and Purchased Warrants (including any shares
of Common Stock issuable upon exercise thereof) for its own account or accounts or funds over which it or its Affiliates hold
voting or investment discretion, not otherwise as a nominee or agent, and not otherwise with the view to, or for resale in connection
with, any distribution thereof not in compliance with applicable securities Laws, and Purchaser has no present intention of selling,
granting any other participation in, or otherwise distributing the same, except in compliance with applicable securities Laws.


 


Section
4.8           
Sophistication; Investigation. Purchaser has such knowledge and experience in financial and business matters such
that it is capable of evaluating the merits and risks of its investment in the Purchased Common Stock and Purchased Warrants (including
any shares of Common Stock issuable upon exercise thereof). Purchaser is an “accredited investor” within the meaning
of Rule 501(a) of the Securities Act and an “institutional account” within the meaning of Rule 4512 of the Financial
Industry Regulatory Authority or a “qualified institutional buyer” within the meaning of Rule 144A of the Securities
Act. Purchaser understands and is able to bear any economic risks associated with such investment (including the necessity of
holding such shares for an indefinite period of time). Except for the representations and warranties expressly set forth in this
Agreement, Purchaser has independently evaluated the merits and risks of its decision to enter into this Agreement and consummate
the transactions contemplated hereby.


 






    29


     


    

 


Section
4.9           
Sufficient Funds. Purchaser has, or at the applicable Closing will have, sufficient assets and the financial capacity
to perform all of its obligations under this Agreement.


 


Section
4.10        Bad
Actor. Neither the Purchaser nor any person or entity with whom the Purchaser will share beneficial ownership of the Purchased
Common Stock is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the Securities Act.


 


Section
4.11        Disclaimer
of Other Representations and Warranties. Except as expressly set forth in Article III (as qualified by the SEC Documents) or in
any other Definitive Document, Purchaser acknowledges that neither the Company nor any other Person has made or is making any
representation or warranty of any kind, express or implied, at law or in equity, including with respect to it or any of its Subsidiaries
or any of their respective businesses, assets, liabilities, condition (financial or otherwise), prospects or operations, or otherwise,
and any such other representations and warranties are hereby expressly disclaimed by the Company. Without limiting the foregoing,
Purchaser has received and may continue to receive from the Company certain estimates, projections, forecasts and other forward-looking
information, as well as certain business plans and cost-related plan information, regarding the Company, its Subsidiaries and
their respective businesses and operations, and Purchaser is making its own evaluation of the adequacy and accuracy of all such
estimates, projections, forecasts and other forward-looking information, as well as such business plans and cost-related plan
information, and Purchaser has not relied upon and will not have any claim against the Company or any of its Subsidiaries, or
any of their respective stockholders, directors, officers, employees, Affiliates, advisors, agents or representatives, or any
other Person, with respect thereto.


 


Article
V


 


ADDITIONAL COVENANTS


 


Section
5.1           
Covenants of the Company. During the period from the date hereof until the earlier of the Second Closing and the
termination of this Agreement in accordance with Article VIII, the Company shall, and shall cause each of its Subsidiaries
to, comply with the following covenants:


 


(a)              
Affirmative Covenants: Except (x) as otherwise expressly required by this Agreement, (y) as required
by applicable Law or (z) as consented to in writing by the Purchaser, during the period from the date hereof until the earliest
of (i) the Second Closing, (ii) the Second Closing Abandonment and (iii) the termination of this Agreement in accordance with Article VIII,
the Company shall, and shall cause each of its direct and indirect Subsidiaries to:


 






    30


     


    

 


(i)                
use commercially reasonable efforts to preserve, in all material respects, its business operations, organization
and goodwill and its relationships with suppliers, customers, lenders and others having business dealings with the Company and
its Subsidiaries;


 


(ii)             
to the extent any legal or structural impediment arises that would prevent, hinder, or delay the consummation of
the transactions contemplated by this Agreement, support and take all steps reasonably necessary and desirable to address and resolve
any such impediment;


 


(iii)           
use good faith and commercially reasonable efforts to obtain all required Governmental Entity and third-party approvals
for the consummation of the transactions contemplated by this Agreement;


 


(iv)            
inform counsel to the Purchaser as soon as reasonably practicable after becoming aware of: (A) any Material
Adverse Effect; (B) any notice of any commencement of any involuntary insolvency proceedings, legal suit for payment of debt
or securement of security from or by any person in respect of the Company or any of its Subsidiaries; (C) a breach of this
Agreement; and (D) any representation or statement made or deemed to be made by the Company or any of its Subsidiaries under
this Agreement, which is or proves to have been materially incorrect or misleading in any respect when made or deemed to be made;


 


(v)              
maintain the good standing of the Company and any Subsidiaries of the Company under the Laws of the state or other
jurisdiction in which they are incorporated or organized;


 


(vi)            
make all necessary registrations, declarations and filings with, and notices to, Governmental Entities (including
under the Securities Exchange Act of 1934 (the “Exchange Act”)) (a) in the ordinary course of business
and (b) with respect to the transactions contemplated by this Agreement;


 


(vii)         
use commercially reasonable efforts to operate their business in the ordinary course of business; and


 


(viii)       
provide, and direct its Representatives to provide, to the Purchaser and its Representatives (A) reasonable
access to the Company and its Subsidiaries’ books and records during normal business hours with at least two (2) days advance
notice to the Company and its Subsidiaries’ Representatives, (B) reasonable access to the Representatives of the Company
and its Subsidiaries with at least two (2) days advance notice to such persons, and (C) such other information as reasonably
requested by the Purchaser and its Representatives; provided, however, that any such access shall be
conducted at the Purchaser’s expense, at a reasonable time, under the supervision of appropriate personnel of the Company
and in such a manner as not to unreasonably interfere with the normal operation of the business of the Company; and provided further,
that any such information will be considered Confidential Information and subject to the Mutual Non-Disclosure Agreement dated
January 30, 2020 by and between the Parties.


 






    31


     


    

 


(b)              
Negative Covenants: Except (x) as otherwise expressly required by this Agreement, (y) as required
by applicable Law or (z) as consented to by the Purchaser in writing, during the period from the date hereof until the earliest
of (i) the Second Closing, (ii) the Second Closing Abandonment and (iii) the termination of this Agreement in accordance with Article VIII,
the Company shall not, and shall cause each of its direct and indirect Subsidiaries not to:


 


(i)                
transfer any material property, asset or right of the Company or its Subsidiaries or any material property, asset
or right used in the business of the Company and its Subsidiaries to any person or entity other than in the ordinary course of
business;


 


(ii)             
engage in any material disposition, acquisition, leasing, investment or other similar transaction (whether by merger,
consolidation or otherwise) outside of the ordinary course of business;


 


(iii)           
incur, create, assume, guarantee or otherwise become liable for any Indebtedness, other than trade indebtedness or
contingent liabilities under surety bonds, in each case, in the ordinary course of business;


 


(iv)            
amend the Company’s or any of its Subsidiaries’ organizational documents (whether by merger, consolidation
or otherwise);


 


(v)              
split, combine, reclassify, redeem, repurchase, acquire, issue or deliver or amend the terms of any Capital Stock
of the Company or any of its Subsidiaries (whether by merger, consolidation or otherwise), other than the transactions expressly
contemplated by this Agreement; provided, that the Company shall be permitted to issue shares of Common Stock pursuant to
existing Company equity compensation plans, including upon the exercise of options, and warrants or similar securities outstanding
as of the date hereof;


 


(vi)            
enter into any transactions with a Related Party;


 


(vii)         
create or incur any Lien on any capital stock, assets or properties of the Company or any of its Subsidiaries, other
than (a) Liens related to capital leases in place as of the date hereof or entered into after the date hereof in the ordinary
course of business or (b) immaterial Liens created or incurred in the ordinary course of business;


 


(viii)       
adopt, establish, enter into, amend, terminate or increase the benefits under any of the Company’s or its Subsidiaries’
benefit plans, except (a) for approval and adoption of annual compensation programs in the ordinary course of business and (b)
subject to stockholder approval at the 2020 annual meeting of the Company’s stockholders, to present a proposal to the stockholders
of the Company for the approval of an increase to the number of shares authorized for issuance under the Company’s 2018 Equity
Incentive Plan;


 


(ix)            
declare, set aside, make or pay any dividend or other distribution (whether in stock, cash, other property or any
combination thereof) with respect to any Capital Stock of the Company and its Subsidiaries;


 






    32


     


    

 


(x)              
amend or terminate any Material Contracts of the Company or its Subsidiaries, other than renewals, amendments, change
orders and expirations of such Material Contracts in the ordinary course of business and except as provided in Section 5.1(b)(viii);


 


(xi)            
waive, release, assign, settle or compromise any material action, suit, claim, cause of action, investigation, complaint,
legal proceeding, administrative enforcement proceeding, arbitration proceeding or other proceeding or adjudicative matter by or
before any Governmental Entity (other than settlements of force majeure claims or actions in the ordinary course of business);


 


(xii)         
settle or compromise any material Tax Contest, consent to any extension or waiver of any limitation period with respect
to any material claim or assessment for Taxes, make, change or revoke any material Tax election or materially change any of the
Company’s or its Subsidiaries’ accounting principles and methodologies (other than as required by GAAP); or


 


(xiii)       
agree, commit or offer to do any of the foregoing.


 


Section
5.2           
Pre-Closing Exclusivity. From the date hereof until the earliest of (i) the Second Closing, (ii) the Second Closing
Abandonment and (iii) the termination of this Agreement in accordance with Article VIII, (a) the Company shall not, and shall
instruct its Affiliates and Representatives not to, directly or indirectly, initiate, solicit, facilitate, encourage, discuss,
negotiate, endorse, engage in, enter into or accept any discussions, negotiations, proposals, inquiries, offers or agreements
with any Person (other than the Purchaser and its Representatives pursuant to this Agreement) relating to the acquisition of the
Company or its Subsidiaries, or greater than 20% of their businesses (whether by merger, stock sale, asset sale, tender offer,
exchange offer or otherwise), or relating to the issuance of equity (other than Common Stock as incentive compensation and as
permitted pursuant to Section 5.1(b)), (collectively, the matters described in this Section 5.2(a), an “Acquisition
Proposal”), (b) the Company shall, and shall instruct its Affiliates and Representatives to, immediately cease and cause
to be terminated all existing discussions or negotiations with any third party (other than the Purchaser and its Representatives
relating to this Agreement) conducted by or on behalf of the Company or any of its Subsidiaries on or prior to the date hereof
in connection with any other transaction relating to an Acquisition Proposal and (c) the Company shall promptly inform the Purchaser
in the event that the Company or any of its Affiliates or Representatives receives any inquiry, proposal or offer that could reasonably
be expected to lead to an Acquisition Proposal.


 


Section
5.3           
[Reserved].


 






    33


     


    

 


Section
5.4           
Stockholder Approval.


 


(a)              
The Company shall use reasonable best efforts to cause the Voting Agreements to be duly executed and delivered to
the Purchaser as promptly as practicable following the date hereof.


 


(b)              
As promptly as reasonably practicable following the date hereof, the Company shall take all action necessary under
applicable Law to call, give notice of, convene and hold a meeting of the stockholders of the Company for the purpose of obtaining
the Stockholder Approval (the “Special Meeting”). The Company will convene and hold the Special Meeting no later
than the thirtieth (30th) day following the mailing of the Proxy Statement to the Company’s stockholders. The Company shall
take all action necessary under applicable Law to obtain the Stockholder Approval at the Special Meeting, such meeting in no event
to be held later than July 31, 2020. The Company shall take reasonable measures to ensure that all proxies solicited in connection
with the Stockholder Approval are solicited in compliance with all applicable Law. Notwithstanding anything to the contrary contained
herein, if on the date of the Special Meeting, or a date preceding the date on which the Special Meeting is scheduled, the Company
reasonably believes that it will not receive proxies sufficient to obtain the Stockholder Approval, the Company may postpone or
adjourn, or make one or more successive postponements or adjournments of, the Special Meeting as long as the date of the Special
Meeting is not postponed or adjourned more than an aggregate of thirty (30) calendar days in connection with any postponements
or adjournments.


 


(c)              
As promptly as reasonably practicable after the date hereof, the Company shall prepare and file with the SEC a preliminary
proxy statement (as amended and supplemented, the “Proxy Statement”), relating to the Special Meeting, which
shall include the recommendation of the Board that the stockholders of the Company vote in favor of (i) the adoption and approval
of this Agreement and the transactions contemplated herein and in the other Definitive Documents and (ii) the Charter Amendment.
The Company shall use its reasonable best efforts to obtain the Stockholder Approval, including using reasonable best efforts to
solicit proxies from the Company’s stockholders. The Company will cause the Proxy Statement to comply as to form in all material
respects with the applicable requirements of the Exchange Act and the rules of the SEC and NASDAQ Global Market. The Company shall
not file the Proxy Statement without providing Purchaser a reasonable opportunity to review and comment thereon (which comments
shall be reasonably considered by the Company). The Company shall resolve all SEC comments with respect to the Proxy Statement
as promptly as practicable after receipt thereof and cause the Proxy Statement in definitive form to be cleared by the SEC and
mailed (if required by applicable Law) to the Company’s stockholders as promptly as reasonably practicable following filing
with the SEC. The Company, prior to responding to SEC comments with respect to the Proxy Statement, will first provide Purchaser
and its Representatives a reasonable opportunity to review and comment thereon, and the Company will give due consideration to
all reasonable additions, deletions or changes suggested thereto by Purchaser or its Representatives.


 


(d)              
Nothing contained in this Agreement shall prohibit the Company or the Board from (i) complying with Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act, or (ii) issuing a “stop, look and listen” communication or similar communication
of the type contemplated by Section 14d-9(f) under the Exchange Act or (iii) otherwise making any disclosure to the Company stockholders;
provided, however, that in the case of the foregoing clause (iii) the Board determines in good faith, after consultation
with its outside legal counsel, that failure to make such disclosure would be inconsistent with its fiduciary duties under applicable
Law.


 






    34


     


    

 


Section
5.5           
Registration Rights Agreement. Simultaneously with the First Closing, the Company and the Purchaser shall enter
into the registration rights agreement attached hereto as Exhibit D (the “Registration Rights Agreement”),
whereby the Purchaser will be entitled to be named as a “Holder” thereunder (with all attendant rights), to include
the Purchased Common Stock, the Purchased Warrants and the Common Stock underlying the Purchased Warrants as “Registrable
Securities” thereunder and to provide for the filing and continuous effectiveness of a Shelf Registration Statement
(as defined in the Registration Rights Agreement) covering the Purchased Common Stock, the Purchased Warrants and the
Common Stock underlying the Purchased Warrants, with such filing to be made no later than 30 days following the First Closing.


 


Section
5.6           
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities
in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated
with the offer or sale of the Securities for purposes of the rules and regulations of the NASDAQ Global Market such that it would
require stockholder approval prior to the closing of such other transaction unless stockholder approval is obtained before the
closing of such subsequent transaction.


 


Section
5.7           
Required Minimum.


 


(a)              
The Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for
issuance pursuant to this Agreement in such amount as may then be required to fulfill its obligations in full under this Agreement,
without regard to any conversion or exercise limits therein.


 


(b)              
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less
than 130% of (i) the Required Minimum on such date, minus (ii) the number of shares of Common Stock previously issued pursuant
to this Agreement, then the Board of Directors shall use reasonable best efforts to amend the Certificate of Incorporation to increase
the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time (minus the number of
shares of Common Stock previously issued pursuant to the Transaction Documents), as soon as reasonably practicable and in any event
not later than the 30th day after such date, provided that the Company will not be required at any time to authorize a number of
shares of Common Stock greater than the maximum remaining number of shares of Common Stock that could possibly be issued after
such time pursuant to this Agreement.


 


(c)              
Prior to the date hereof, the Company has filed with the NASDAQ Global Market a Listing of Additional Shares Notification
under Listing Rule 5250(e)(2) (an “LAS Notification”) covering a number of shares of Common Stock at least equal
to the Required Minimum. Promptly following the date hereof, the Company shall take all steps necessary to cause such shares of
Common Stock to be approved for listing or quotation on NASDAQ Global Market as soon as possible thereafter, and shall maintain
the listing or quotation of a numbers of shares of Common Stock on any date equal to the Required Minimum on such date on the NASDAQ
Global Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository
Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository
Trust Company or such other established clearing corporation in connection with such electronic transfer. Following the First Closing,
the Company shall, from time to time as required, within the time period required by the NASDAQ Global Market, prepare and file
with the NASDAQ Global Market a Change in Shares Outstanding.


 






    35


     


    

 


Section
5.8           
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution
of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further
acknowledges that its obligations under the Definitive Documents, including, without limitation, its obligation to issue the Securities
pursuant to this Agreement, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction,
regardless of the effect of any such dilution or any claim the Company may have against Purchaser and regardless of the dilutive
effect that such issuance may have on the ownership of the other stockholders of the Company.


 


Section
5.9           
Expense Reimbursement. Upon (i) the termination of this Agreement under circumstance in which the Termination Fee
is payable in accordance with Section 8.3 (and subject to the limitations set forth in Section 8.3) or (ii) either
or both of the First Closing or the Second Closing, the Company shall promptly, upon written request of the Purchaser, reimburse
the Purchaser for all reasonable and documented fees and expenses of the Purchaser and its Affiliates and Representatives (including
the fees and expenses of counsel) incurred prior to, on or after the date hereof in connection with the examination, review, due
diligence investigation, documentation, negotiation, closing and funding of the transactions contemplated by this Agreement. Notwithstanding
anything to the contrary herein, this Section 5.9 shall survive the termination of this Agreement.


 


Section
5.10        Blue
Sky Filings. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchaser at the First Closing or Second Closing, as applicable, under applicable
securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.


 


Article
VI



 


CONDITIONS TO THE OBLIGATIONS OF THE PARTIES


 


Section
6.1           
Conditions to the Obligations of the Purchaser at the First Closing. The obligations of Purchaser to consummate
the First Closing shall be subject to (unless waived in writing by the Purchaser) the satisfaction of the following conditions
prior to or at the First Closing:


 






    36


     


    

 


(a)              
Material Adverse Effect. Since the date of this Agreement, there shall not have occurred a Material Adverse
Effect.


 


(b)              
Governmental Approvals. All authorizations, approvals, consents or clearances under applicable Law required
in connection with the transactions contemplated by this Agreement shall have been obtained or filed.


 


(c)              
No Legal Impediment to Issuance. No applicable Law will have been enacted or made effective and no Order will
have been issued, promulgated, enforced or made that serves to restrain, enjoin, make illegal or prohibit the timely consummation
of the transactions contemplated by this Agreement, and no action by a Governmental Entity will have been commenced and be continuing
that seeks to restrain, enjoin, make illegal or prohibit the timely consummation of the transactions contemplated by this Agreement.


 


(d)              
Accuracy of the Representations and Warranties. (i) The Fundamental Representations shall be true and
correct in all material respects as of the date hereof and as of the First Closing as though made at and as of the First Closing
(other than such representations and warranties as are made as of an earlier date, which shall be so true and correct as of such
earlier date) and (ii) the other representations and warranties of the Company shall be true and correct as of the date hereof
and as of the First Closing as though made at and as of the First Closing (other than such representations and warranties as are
made as of an earlier date, which shall be so true and correct as of such earlier date), except in each case for such failure to
be true and correct that, individually or in the aggregate, has not resulted in a Material Adverse Effect, in all cases disregarding
all materiality qualifiers in such representations and warranties.


 


(e)              
Compliance with Covenants. The Company shall have performed and complied, in all material respects, with all
of its covenants and agreements contained in this Agreement that contemplate, by their terms, performance or compliance prior to
the First Closing.


 


(f)               
Delivery of the Closing Certificate. The Company shall have delivered to Purchaser a certificate duly executed
by the Chief Executive Officer of the Company certifying that the conditions set forth in clauses (a), (d) and (e) of this Section 6.1
have been fully satisfied.


 


(g)              
Suspension. Since the date hereof, trading in the Common Stock shall not have been suspended.


 


(h)              
Voting Agreements. Voting Agreements shall have been executed and delivered to the Purchaser by stockholders
of the Company holding at least 45% of the outstanding shares of Common Stock as of the date hereof (the “Voting Agreement
Condition”).


 


(i)                
Nasdaq Global Market Filing. The Nasdaq Global Market shall have completed its review of the LAS notification.


 


(j)                
Other Deliverables and Actions. The Company shall have delivered or caused to be delivered and shall have
taken each of the actions contemplated by Section 2.2(b).


 






    37


     


    

 


Section
6.2           
Conditions to the Obligations of the Company at the First Closing. The obligations of the Company to consummate
the First Closing shall be subject to (unless waived in writing by the Company) the satisfaction of each of the following conditions
prior to or at the First Closing:


 


(a)              
Governmental Approvals. All authorizations, approvals, consents or clearances under applicable Law required
in connection with the transactions contemplated by this Agreement shall have been obtained or filed.



 


(b)              
No Legal Impediment to Issuance. No applicable Law will have been enacted or made effective and no Order will
have been issued, promulgated, enforced or made that serves to restrain, enjoin, make illegal or prohibit the consummation of the
transactions contemplated by this Agreement, and no action by a Governmental Entity will have been commenced and be continuing
that seeks to restrain, enjoin, make illegal or prohibit the consummation of the transactions contemplated by this Agreement.


 


(c)              
Accuracy of the Representations and Warranties. The representations and warranties of the Purchaser shall
be true and correct in all respects as of the date hereof and as of the First Closing as though made at and as of the First Closing
(other than such representations and warranties as are made as of an earlier date, which shall be so true and correct as of such
earlier date) except, in each case, as would not reasonably be expected, individually or in the aggregate, to prohibit or materially
and adversely impact Purchaser’s performance of its obligations under this Agreement.


 


(d)              
Compliance with Covenants. The Purchaser shall have performed and complied, in all material respects, with
all of its covenants and agreements contained in this Agreement that contemplate, by their terms, performance or compliance prior
to the First Closing.


 


(e)              
Nasdaq Global Market Filing. The Nasdaq Global Market shall have completed its review of the LAS notification.


 


Section
6.3           
Conditions to the Obligations of the Purchaser at the Second Closing. The obligations of Purchaser to consummate
the Second Closing shall be subject to (unless waived in writing by the Purchaser) the satisfaction of the following conditions
prior to or at the Second Closing:


 


(a)              
Material Adverse Effect. Since the date of this Agreement, there shall not have occurred a Material Adverse
Effect.


 


(b)              
Governmental Approvals. All authorizations, approvals, consents or clearances under applicable Law required
in connection with the transactions contemplated by this Agreement shall have been obtained or filed.


 


(c)              
No Legal Impediment to Issuance. No applicable Law will have been enacted or made effective and no Order will
have been issued, promulgated, enforced or made that serves to restrain, enjoin, make illegal or prohibit the timely consummation
of the transactions contemplated by this Agreement, and no action by a Governmental Entity will have been commenced and be continuing
that seeks to restrain, enjoin, make illegal or prohibit the timely consummation of the transactions contemplated by this Agreement.


 


(d)              
Accuracy of the Representations and Warranties. (i) The Fundamental Representations shall be true and
correct in all material respects as of the date hereof and as of the Second Closing as though made at and as of the Second Closing
(other than such representations and warranties as are made as of an earlier date, which shall be so true and correct as of such
earlier date) and (ii) the other representations and warranties of the Company shall be true and correct as of the date hereof
and as of the Second Closing as though made at and as of the Second Closing (other than such representations and warranties as
are made as of an earlier date, which shall be so true and correct as of such earlier date), except in each case for such failure
to be true and correct that, individually or in the aggregate, has not resulted in a Material Adverse Effect, in all cases disregarding
all materiality qualifiers in such representations and warranties.


 






    38


     


    

 


(e)              
Compliance with Covenants. The Company shall have performed and complied, in all material respects, with all
of its covenants and agreements contained in this Agreement that contemplate, by their terms, performance or compliance prior to
the Second Closing.


 


(f)               
Delivery of the Closing Certificate. The Company shall have delivered to Purchaser a certificate duly executed
by the Chief Executive Officer of the Company certifying that the conditions set forth in clauses (a), (d) and (e) of this Section 6.3
have been fully satisfied.


 


(g)              
Suspension. Since the date hereof, trading in the Common Stock shall not have been suspended.


 


(h)              
Stockholder Approval. The Stockholder Approval shall have been duly received.


 


(i)                
Other Deliverables and Actions. The Company shall have delivered or caused to be delivered and shall have
taken each of the actions contemplated by Section 2.3(b).


 


Section
6.4           
Conditions to the Obligations of the Company at the Second Closing. The obligations of the Company to consummate
the Second Closing shall be subject to (unless waived in writing by the Company) the satisfaction of each of the following conditions
prior to or at the Second Closing:


 


(a)              
Governmental Approvals. All authorizations, approvals, consents or clearances under applicable Law required
in connection with the transactions contemplated by this Agreement shall have been obtained or filed.


 


(b)              
No Legal Impediment to Issuance. No applicable Law will have been enacted or made effective and no Order will
have been issued, promulgated, enforced or made that serves to restrain, enjoin, make illegal or prohibit the consummation of the
transactions contemplated by this Agreement, and no action by a Governmental Entity will have been commenced and be continuing
that seeks to restrain, enjoin, make illegal or prohibit the consummation of the transactions contemplated by this Agreement.


 


(c)              
Accuracy of the Representations and Warranties. The representations and warranties of the Purchaser shall
be true and correct in all respects as of the date hereof and as of the Second Closing as though made at and as of the Second Closing
(other than such representations and warranties as are made as of an earlier date, which shall be so true and correct as of such
earlier date) except, in each case, as would not reasonably be expected, individually or in the aggregate, to prohibit or materially
and adversely impact Purchaser’s performance of its obligations under this Agreement.


 






    39


     


    

 


(d)              
Compliance with Covenants. The Purchaser shall have performed and complied, in all material respects, with
all of its covenants and agreements contained in this Agreement that contemplate, by their terms, performance or compliance prior
to the Second Closing.


 


(e)              
Stockholder Approval. The Stockholder Approval shall have been duly received.


 


Article
VII



INTENTIONALLY OMITTED


 


Article
VIII



 


TERMINATION


 


Section
8.1           
Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any
time prior to the First Closing:


 


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


 


(b)              
by the Purchaser, upon written notice to the Company, if the First Closing shall not have been consummated on or
prior to 5:00 pm New York Time on April 30, 2020 or such later date, if any, as the Company and the Purchaser may mutually agree
upon in writing (such date, the “Termination Date”); provided, however, that the right to terminate
this Agreement pursuant to this Section 8.1(b) shall not available to the Purchaser if Purchaser’s breach of
any representation, warranty, covenant or other agreement contained in this Agreement is the primary cause of the failure of the
First Closing to occur on or prior to the Termination Date;


 


(c)              
by the Company or the Purchaser, upon written notice to the other Party, if a Governmental Entity of competent jurisdiction
has issued an Order or has taken any other action permanently enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement, and such Order or action has become final and non-appealable; provided, however,
that the right to terminate this Agreement pursuant to this Section 8.1(c) shall not be available to any Party whose
breach of any representation, warranty, covenant or other agreement contained in this Agreement is the primary cause of the failure
to avoid such Order or other action; or


 






    40


     


    

 


(d)              
by Purchaser, upon written notice to the Company, if:


 


(i)                
(A) the Company has breached any representation, warranty, covenant or other agreement made by the Company in this
Agreement or such representation or warranty shall have become inaccurate and such breach or inaccuracy would, individually or
in the aggregate, cause a condition to the First Closing or Second Closing to not be able to be satisfied, (B) the Purchaser
shall have delivered written notice of such breach or inaccuracy to the Company and (C) such breach or inaccuracy is not cured
by the Company before the earlier of (x) the 10th day following the delivery of such notice, and (y) the Termination
Date; or


 


(ii)             
the Company or any of its direct or indirect Subsidiaries (A) voluntarily commences any case or files any petition
seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief under any
federal, state or foreign bankruptcy, insolvency, administrative receivership or similar law now or hereafter in effect; (B) consents
to the institution of, or fails to contest in a timely and appropriate manner, any involuntary proceeding or petition described
in the preceding subsection (A); (C) applies for or consents to the appointment of a receiver, administrator, administrative
receiver, trustee, custodian, sequestrator, conservator or similar official with respect to the Company or any Affiliate or for
a substantial part of the Company’s assets; (D) makes a general assignment or arrangement for the benefit of creditors;
or (E) takes any corporate action for the purpose of authorizing any of the foregoing.


 


(e)              
by the Company, upon written notice to the Purchaser, if:


 


(i)                
(A) the Purchaser has breached any representation, warranty, covenant or other agreement made by Purchaser in this
Agreement or such representation or warranty shall have become inaccurate and such breach or inaccuracy would, individually or
in the aggregate, cause a condition to the First Closing or Second Closing to not be able to be satisfied, (B) the Company
shall have delivered written notice of such breach or inaccuracy to the Purchaser and (C) such breach or inaccuracy is not
cured by the Purchaser before the earlier of (x) the 10th day following the delivery of such notice, and (y) the
Termination Date; or


 


(ii)             
the Purchaser or any of its direct or indirect Subsidiaries (A) voluntarily commences any case or files any
petition seeking bankruptcy, winding up, dissolution, liquidation, administration, moratorium, reorganization or other relief under
any federal, state or foreign bankruptcy, insolvency, administrative receivership or similar law now or hereafter in effect; (B) consents
to the institution of, or fails to contest in a timely and appropriate manner, any involuntary proceeding or petition described
in the preceding subsection (A); (C) applies for or consents to the appointment of a receiver, administrator, administrative
receiver, trustee, custodian, sequestrator, conservator or similar official with respect to the Purchaser or any Affiliate or for
a substantial part of the Purchaser’s assets; (D) makes a general assignment or arrangement for the benefit of creditors;
or (E) takes any corporate action for the purpose of authorizing any of the foregoing.


 






    41


     


    

 


Section
8.2           
Effect of Termination. Upon termination of this Agreement pursuant to this Article VIII, this Agreement
shall forthwith become void and there shall be no further obligations or liabilities on the part of the Parties; provided,
that, Section 2.3(b)(ii), Section 5.9, Article VIII, Section 9.1, Section 9.3 through
Section 9.11 (except as otherwise set forth therein) and Section 9.13 shall survive the termination of this Agreement;
provided further that nothing set forth in this Agreement shall relieve any Party from liability for any breach of this
Agreement occurring prior to such termination.


 


Section
8.3           
Termination Fee.


 


(a)              
Without limiting any other rights or obligations set forth in this Agreement, in the event (i) that this Agreement
is terminated pursuant to Section 8.1(b) and if, as of such termination, the Voting Agreement Condition shall not have
been satisfied as of the time of termination or (ii) of a Second Closing Abandonment if at the time of such Second Closing Abandonment,
the Stockholder Approval has not been obtained, then in either case, the Company shall pay, or cause to be paid, to the Purchaser,
(x) an amount equal to $850,000 (such amount, the “Termination Fee”) and (y) the reimbursement of expenses contemplated
by Section 5.9; provided, however, that in the event the Termination Fee is paid, the Company’s expense
reimbursement obligation shall be limited to $250,000. Payment of the Termination Fee or the reimbursement of expenses shall be
made by wire transfer of immediately available funds to such accounts as directed by the Purchaser and shall be made within two
(2) Business Days following the termination of this Agreement.


 


(b)              
Other than in the case of willful breach of this Agreement, upon acceptance by Purchaser of the Termination Fee (and
any related amounts owing pursuing to Section 8.3(a)), none of the Company nor its Related Parties shall have any further
liability or obligation relating to or arising out of this Agreement (other than as set forth in Section 8.2). Purchaser
acknowledges and agrees that under no circumstances shall the Purchaser be permitted or entitled both to (x) the receipt of the
Termination Fee and expense reimbursement pursuant to Section 5.9 and (y) a grant of specific performance that requires
the Company to consummate the Second Closing.


 


Section
8.4           
Second Closing Abandonment. In the event that (i) the Second Closing shall not have been consummated on or prior
to 5:00 pm New York Time on August 17, 2020 or such later date, if any, as the Company and the Purchaser may mutually agree (the
 “Abandonment Date”) or (ii) the Special Meeting occurs and the Stockholder Approval is not obtained at the
Special Meeting, either the Purchaser or the Company shall be entitled to deliver written notice (a “Second Closing Abandonment
Notice”) to the other specifying that the noticing party has elected not to proceed with the consummation of the Second
Closing; provided, however, that the right to deliver a Second Closing Abandonment Notice pursuant to this Section 8.4
shall not be available to any Party whose breach of this Agreement is the primary cause of the failure of the Second Closing
to occur on or prior to the Abandonment Date. Upon delivery of a Second Closing Abandonment Notice, the obligation of each party
to consummate the Second Closing shall terminate and no party shall thereafter be required to take any action contemplated herein
necessary to cause the Second Closing to occur (the “Second Closing Abandonment”). For the avoidance of doubt,
(i) the occurrence of the Second Closing Abandonment shall not limit any liability for a breach of this Agreement occurring prior
to the Second Closing Abandonment and (ii) following the Second Closing Abandonment, all other terms, conditions and indemnities
set forth herein shall continue in full effect in accordance with their terms.


 






    42


     


    

 


Article
IX

GENERAL PROVISIONS


 


Section
9.1           
Notices. All notices and other communications in connection with this Agreement shall be in writing and shall be
deemed given if delivered personally, sent via electronic mail (with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation) to the Parties at the following addresses (or at such
other address for a Party as may be specified by like notice):


 


(a)              
If to the Company:


 


Entasis Therapeutics Holdings Inc.


35 Gatehouse Drive


Waltham, MA 02451


		Attn:	Elizabeth Keiley



		Tel:	(781) 870-0120



		Email:	betzy.keiley@entasistx.com



 


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


 


	Covington & Burling LLP

        The New York Times Building

        620 Eighth Avenue

        New York, NY 10018

        Attn:     Jack S. Bodner

        Tel:        (212) 841-1079

        Fax:       (646) 441-9079

        Email:     jbodner@cov.com





 


(b)              
If to the Purchaser:


 


Innoviva, Inc.


1350 Old Bayshore Highway Suite 400

Burlingame, CA 94010


		Attention:	Chief Executive Officer



		Email:	Geoffrey.hulme@inva.com



 


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



Willkie Farr & Gallagher LLP


787 Seventh Avenue


New York, New York 10019


Attn: Russell Leaf


Jared Fertman


		Tel:	(212) 728-8593



		 	(212) 728-8670



		Email:	rleaf@willkie.com



		 	jfertman@willkie.com



 






    43


     


    

 


Section
9.2           
Assignment; Third-Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned or transferred (in whole or in part) by any Party (whether by operation of law or otherwise)
without the prior written consent of the other Party; provided, that Purchaser shall be entitled to assign this Agreement
in whole or in part to any of its Subsidiaries or Affiliates. Any purported assignment or transfer in violation of this Section 9.2
shall be null and void ab initio. This Agreement (including the documents and instruments referred to in this Agreement)
is not intended to and does not confer upon any Person any rights or remedies under this Agreement other than the Parties.


 


Section
9.3           
Prior Negotiations; Entire Agreement. This Agreement (including the agreements attached as Schedules and Exhibits to
and the documents and instruments referred to in this Agreement, including the Definitive Documents) constitute the entire agreement
of the Parties and supersede all prior agreements, arrangements or understandings, whether written or oral, among the Parties
with respect to the subject matter of this Agreement.


 


Section
9.4           
Governing Law; Venue: Forum. THIS AGREEMENT (AND ANY CLAIMS OR CAUSE OF ACTION ARISING UNDER, OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR STATUTE) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF. Each of the Parties irrevocably and unconditionally agrees that, subject to the immediately following sentence
of this Section 9.4, any legal action, suit or proceeding against it with respect to any matter arising under, out
of or in connection with this Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or
proceeding, may be brought in the Delaware Chancery Court (or, if the Delaware Chancery Court shall be unavailable, then any federal
court of the United States of America sitting in the State of Delaware), and by execution and delivery of this Agreement, each
of the Parties: (a) irrevocably submits itself to the nonexclusive jurisdiction of such court, (b) waives any objection
to laying venue in any such action, suit or proceeding and (c) waives any objection that such court is an inconvenient forum
or does not have jurisdiction over such Party.


 


Section
9.5           
Waiver of Jury Trial. EACH PARTY IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING UNDER,
OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER IN CONTRACT, TORT OR STATUTE).


 


Section
9.6           
Counterparts. This Agreement may be executed in any number of counterparts, all of which will be considered one
and the same agreement and will become effective when counterparts have been signed by each of the Parties and delivered to each
other Party (including via facsimile or other electronic transmission), it being understood that each Party need not sign the
same counterpart.


 






    44


     


    

 


Section
9.7           
Waivers and Amendments; Rights Cumulative; Consent; Severability.


 


(a)              
This Agreement may be amended, restated, modified or changed only by a written instrument signed by the Company and
the Purchaser.


 


(b)              
Unless otherwise expressly set forth herein, the terms and conditions of this Agreement may be waived (i) by
the Company only by a written instrument executed by the Company and (ii) by the Purchaser only by a written instrument executed
by the Purchaser. No delay on the part of any Party in exercising any right, power or privilege pursuant to this Agreement will
operate as a waiver thereof, nor will any waiver on the part of any Party of any right, power or privilege pursuant to this Agreement,
nor will any single or partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or further
exercise thereof or the exercise of any other right, power or privilege pursuant to this Agreement.


 


(c)              
In the event that any provision hereof would be invalid or unenforceable in any respect under applicable Law, such
provision shall be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with,
and possible under, applicable Law. The provisions hereof are severable, and in the event any provision hereof should be held invalid
or unenforceable in any respect, it shall not invalidate, render unenforceable or otherwise affect any other provision hereof.


 


Section
9.8           
Headings; Interpretation. The headings in this Agreement are for reference purposes only and will not in any way
affect the meaning or interpretation of this Agreement. Each Party participated in the drafting of this Agreement and this Agreement
shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting
an instrument or causing any instrument to be drafted.


 


Section
9.9           
Specific Performance. It is understood and agreed by the Parties that irreparable damage would occur if any provision
of this Agreement were not performed in accordance with the terms hereof and that the Parties shall be entitled to an injunction
or injunctions without the necessity of posting a bond to prevent breaches of this Agreement or to enforce specifically the performance
of the terms and provisions hereof, in addition to any other remedy to which they are entitled at law or in equity. Unless otherwise
expressly stated in this Agreement, no right or remedy described or provided in this Agreement is intended to be exclusive or
to preclude a Party from pursuing other rights and remedies to the extent available under this Agreement, at law or in equity.


 


Section
9.10        Publicity.
The Company shall file a Current Report on Form 8-K with the SEC within the time required by the Exchange Act in form and substance
reasonably satisfactory to Purchaser. The Parties shall jointly issue a press release disclosing the occurrence of the First Closing
on the day of the First Closing or the Business Day immediately following the date thereof. The Company shall consult with the
Purchaser in issuing any other press releases with respect to the transactions contemplated hereby, and the Company shall not
issue any such press release or otherwise make any such public statement without the prior consent of the Purchaser, except if
such disclosure is required by Law, in which case the Company shall promptly provide Purchaser with prior notice of such public
statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of Purchaser or include
the name of Purchaser in any filing with the SEC or any Governmental Entity, without the prior written consent of Purchaser, except
to the extent such disclosure is required by Law, in which case the Company shall provide the Purchaser with prior notice of such
disclosure, or is required pursuant to the LAS Notification.


 






    45


     


    

 


Section
9.11        No
Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, each Party covenants, agrees and acknowledges
that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had
against any Party’s Affiliates, Related Parties or Representatives or any of such Party’s Affiliates’ or Related
Parties’ Affiliates or Representatives in each case other than the Parties to this Agreement and each of their respective
successors and permitted assigns under this Agreement, whether by the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise be incurred by any of the Related Parties or Representatives, as such, for any obligation
or liability of any Party under this Agreement or any documents or instruments delivered in connection herewith for any claim
based on, in respect of or by reason of such obligations or liabilities or their creation; provided, however, that
nothing in this Section 9.11 shall relieve or otherwise limit the liability of any Party hereto or any of their respective
successors or permitted assigns for any breach or violation of its obligations under this Agreement or such other documents or
instruments, except as provided in Section 8.3(b) and Section 9.12. For the avoidance of doubt, none of the Parties
will have any recourse, be entitled to commence any proceeding or make any claim under this Agreement or in connection with the
transactions contemplated hereby except against any of the Parties or their respective successors and permitted assigns, as applicable.


 


Section
9.12        Limitation
of Liability. IN NO EVENT WILL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY
FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH, ARISING OUT OF, OR RELATED
TO, THIS AGREEMENT, EXCEPT TO THE EXTENT REASONABLY FORESEEABLE OR ACTUALLY PAID TO A THIRD PARTY.


 


Section
9.13        Further
Assurances. From and after the Second Closing Date, upon the reasonable request of any Party hereto, any other Party hereto shall
execute, acknowledge, file and/or deliver all such additional instruments, agreements and other documents, and shall do (or cause
to be done) all such additional acts and things, that are necessary, proper, advisable or desirable to carry out, consummate and
make effective any of the transactions contemplated by this Agreement.


 


Section
9.14        Survival.
All covenants and other agreements contained in this Agreement which by their terms are to be performed following the Second Closing
shall survive the Second Closing until fully performed. The representations and warranties made in this Agreement shall survive
as follows: (a) the representations and warranties set forth in Section 3.1 (Organization and Qualification),
Section 3.2 (Authorization; Enforcement Validity), Section 3.3 (Issuance of Securities), Section
3.6 (No General Solicitation; Agents’ Fees), Section 3.13 (Transactions With Affiliates), Section 3.14
(Capitalization) and Section 3.37 (Specified Contract) (collectively, the “Fundamental Representations”)
shall survive indefinitely; (b) the representations and warranties in Section 3.19 (Employee Relations), Section 3.23
(Tax Status) and Section 3.29 (ERISA Compliance) shall survive until the expiration of the statute of
limitations plus thirty (30) days; and (c) all other representations and warranties shall survive until the twelve (12)-month
anniversary of the Second Closing.


 


[Remainder of Page
Intentionally Left Blank]


 






    46


     


    

 


IN WITNESS WHEREOF, the
undersigned Parties have duly executed this Agreement as of the date first above written.


 


 





	 	Entasis Therapeutics Holdings Inc.
	 	 	 
	 	By:  	/s/ Manos Perros PhD
	 	 	Name: Manos Perros PhD
	 	 	Title: President and CEO











   





	 	INNOVIVA,
    INC.
	 	 	 
	 	By:  	/s/ Geoffrey Hulme
	 	 	Name: Geoffrey Hulme
	 	 	Title: Interim Principal Executive Officer











  





[Signature Page to Securities Purchase
Agreement]