Document:

Exhibit
4.3

 

JOINDER
AND SECOND LOAN MODIFICATION AGREEMENT

 

This
Joinder and Second Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of October
19, 2020, by and among (a) SILICON VALLEY BANK, a California corporation (“Bank”), (b) (i) INTERPACE
BIOSCIENCES, INC., (f/k/a Interpace Diagnostics Group, Inc.) a Delaware corporation (“IDG”), (ii) INTERPACE
DIAGNOSTICS CORPORATION, a Delaware corporation (“IDC”), and (iii) INTERPACE DIAGNOSTICS, LLC, a
Delaware limited liability company (“IDLLC”) (IDG, IDC and IDLLC are hereinafter jointly and severally, individually
and collectively, referred to as “Existing Borrower”), and (c) INTERPACE PHARMA SOLUTIONS, INC., a Delaware
corporation (“New Borrower”) (New Borrower and Existing Borrower, are hereinafter jointly, severally, individually
and collectively, “Borrower”).

 

1.
DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower
to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of November 13, 2018, evidenced by, among other
documents, a certain Loan and Security Agreement dated as of November 13, 2018, between Borrower and Bank, as amended by a certain
First Loan Modification Agreement dated as of March 18, 2019 (as has been and as may be further amended, modified, restated, replaced
or supplemented from time to time, the “Loan Agreement”). Capitalized terms used but not otherwise defined
herein shall have the same meaning as in the Loan Agreement.

 

2.
JOINDER TO LOAN AGREEMENT. New Borrower hereby joins the Loan Agreement and each of the Loan Documents, and agrees to comply
with and be bound by all of the terms, conditions and covenants of the Loan Agreement and Loan Documents, as if it were originally
named a “Borrower” therein. Without limiting the generality of the preceding sentence, New Borrower agrees that it
will be jointly and severally liable, together with the Existing Borrower, for the payment and performance of all obligations
and liabilities of Borrower under the Loan Agreement, including, without limitation, the Obligations. Each Borrower hereby appoints
the other as agent for the other for all purposes hereunder. Each Borrower hereunder shall be obligated to repay all Credit Extensions
made pursuant to the Loan Agreement, regardless of which Borrower actually receives said Credit Extension, as if each Borrower
hereunder directly received all Credit Extensions.

 

3.
RESERVED.

 

4.
GRANT OF SECURITY INTEREST. To secure the prompt payment and performance of all of the Obligations, New Borrower hereby
grants to Bank a continuing lien upon and security interest in all of New Borrower’s now existing or hereafter arising rights
and interests in such assets of New Borrower as are consistent with the description of the
Collateral set forth on Exhibit A of the Loan Agreement (as if such Collateral were deemed to pertain to the assets of
New Borrower), whether now owned or existing or hereafter created, acquired, or arising, and wherever located, including,
without limitation, all of New Borrower’s assets, and all New Borrower’s books relating to the foregoing and any and
all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions
and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. New Borrower further
covenants and agrees that by its execution hereof it shall provide all such information, complete all such forms, and take all
such actions, and enter into all such agreements, in form and substance reasonably satisfactory to Bank that are reasonably deemed
necessary by Bank in order to grant a valid, perfected first priority security interest to Bank in the Collateral (subject only
to Permitted Liens that are permitted pursuant to the terms of the Loan Agreement to have superior priority to Bank’s Lien
in the Loan Agreement). New Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all
appropriate jurisdictions in order to perfect or protect Bank’s interest or rights hereunder, including a notice that any
disposition of the Collateral, by either Borrower or any other Person shall be deemed to violate the rights of Bank under the
Code. Any such financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar
effect, or as being of an equal or lesser scope, or with greater detail, all in Bank’s discretion.

 

    	1

    	 

    

 

5.
REPRESENTATIONS AND WARRANTIES. New Borrower hereby represents and warrants to Bank that all representations and warranties
in the Loan Documents made on the part of Existing Borrower are true and correct on the date hereof with respect to New Borrower,
with the same force and effect as if New Borrower was named as “Borrower” in the Loan Documents in addition to Existing
Borrower.

 

6.
DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by, among other property, the Collateral as defined
in the Loan Agreement (together with any other collateral security granted to Bank, as amended, the “Security Documents”).
Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred
to as the “Existing Loan Documents”.

 

7.
DELIVERY OF DOCUMENTS. Each Borrower hereby agrees that the following documents shall be delivered to Bank prior to or
contemporaneously with delivery of this Loan Modification Agreement, each in form and substance satisfactory to Bank:

 

	 	A.	a
    secretary’s corporate borrowing certificate for each of IDG, IDC and New Borrower with respect to each such borrower’s
    certificate of incorporation, by-laws, incumbency and resolutions authorizing the execution and delivery of this Loan Modification
    Agreement and the other documents required by Bank in connection with this Loan Modification Agreement;
	 	 	 
	 	B.	a
    limited liability company borrowing certificate for IDLLC with respect to IDLLC’s certificate of formation, operating
    agreement, incumbency and resolutions authorizing the execution and delivery of this Loan Modification Agreement and the other
    documents required by Bank in connection with this Loan Modification Agreement;
	 	 	 
	 	C.	consent
    of each of IDG’s, IDC’s and New Borrower’s shareholders, as necessary, authorizing the execution and delivery
    of this Loan Modification Agreement and the other documents required by Bank in connection with this Loan Modification Agreement;
	 	 	 
	 	D.	consent
    of IDLLC’s members or managers, as applicable, authorizing the execution and delivery of this Loan Modification Agreement
    and the other documents required by Bank in connection with this Loan Modification Agreement;
	 	 	 
	 	E.	a
    long form Certificate of Good Standing for each Borrower certified by the Secretary of State of Delaware;
	 	 	 
	 	F.	certificates
    of Good Standing/Foreign Qualification for each Borrower, certified by the Secretary of State (or equivalent agency) for each
    state in which such Borrower is qualified to do business;
	 	 	 
	 	G.	the
    results of UCC searches for each Borrower indicating that there are no Liens other than Permitted Liens, and otherwise in
    form and substance satisfactory to Bank;
	 	 	 
	 	H.	a
    Perfection Certificate for each of IDG and New Borrower;
	 	 	 
	 	I.	evidence
    of insurance (on Acord 28 and Acord 25 certificates, as acceptable to Bank) for each Borrower; and
	 	 	 
	 	J.	such
    other documents as Bank may reasonably request.

 

    	2

    	 

    

 

8.
DESCRIPTION OF CHANGE IN TERMS.

 

	 	A.	Modifications
    to Loan Agreement.

 

	 	1	Borrower
    hereby acknowledges and agrees that Borrower will deliver to Bank, each in form and substance satisfactory to Bank, within
    forty-five (45) days from the date of this Loan Modification Agreement: (i) an endorsement to Borrower’s general liability
    insurance policy that names Bank as an additional insured, (ii) an endorsement to Borrower’s property insurance policy
    that names Bank as the sole lender’s loss payee and (iii) endorsements to the general liability and property insurance
    policies stating that the insurer will give Bank at least thirty (30) days prior written notice before any such policy or
    policies shall be materially altered or canceled. Borrower acknowledges and agrees that the failure of Borrower to satisfy
    the requirements set forth in the immediately preceding sentence on or prior to the date that is forty-five (45) days from
    the date of this Loan Modification Agreement shall result in an immediate Event of Default under the Loan Agreement for which
    there shall be no grace or cure period.
	 	 	 
	 	2	The
    Loan Agreement shall be amended by deleting the defined term “Borrower” where it appears in the preamble thereof.
	 	 	 
	 	3	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 2.2.1 thereof:

 

“
(a) As part of the Revolving Line, Bank shall issue or have issued the Landlord Letter of Credit for Borrower’s account.
The aggregate Dollar Equivalent amount utilized for the issuance of the Landlord Letter of Credit shall at all times reduce the
amount otherwise available for Advances under the Revolving Line. The aggregate Dollar Equivalent of the face amount of the Landlord
Letter of Credit (including any drawn but unreimbursed portion of the Landlord Letter of Credit) may not exceed the lesser of
(i) Two Hundred Fifty Thousand Dollars ($250,000.00) and (ii) (A) the lesser of the Revolving Line or the Borrowing Base, minus
(B) the sum of all outstanding principal amounts of any Advances, minus (C) the outstanding principal balance of all Term Loan
Advances.”

 

and
inserting in lieu thereof the following:

 

“
(a) As part of the Revolving Line, Bank shall issue or have issued the Landlord Letter of Credit for Borrower’s account.
The aggregate Dollar Equivalent amount utilized for the issuance of the Landlord Letter of Credit shall at all times reduce the
amount otherwise available for Advances under the Revolving Line. The aggregate Dollar Equivalent of the face amount of the Landlord
Letter of Credit (including any drawn but unreimbursed portion of the Landlord Letter of Credit) may not exceed the lesser of
(i) One Million Dollars ($1,000,000.00) and (ii) (A) the lesser of the Revolving Line or the Borrowing Base, minus (B) the sum
of all outstanding principal amounts of any Advances, minus (C) the outstanding principal balance of all Term Loan Advances.”

 

    	3

    	 

    

 

	 	4	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 2.5 thereof:

 

“
(i) Advances. Subject to Section 2.5(b), the principal amount outstanding under the Revolving Line shall accrue interest
at a floating per annum rate equal to one-half of one percent (0.50%) above the Prime Rate, which interest shall be payable monthly
in arrears in accordance with Section 2.5(d) below.”

 

and
inserting in lieu thereof the following:

 

“
(i) Advances. Subject to Section 2.5(b), the principal amount outstanding under the Revolving Line shall accrue interest
at a floating per annum rate equal to the greater of (A) one percent (1.0%) above the Prime Rate and (B) four and one-quarter
of one percent (4.25%), which interest shall be payable monthly in arrears in accordance with Section 2.5(d) below.”

 

	 	5	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 6.2 thereof:

 

“
(e) as soon as available, but no later than forty-five (45) days after the last day of each calendar quarter (other than the fourth
(4th) calendar quarter of each year), a company prepared consolidated balance sheet and income statement covering Borrower’s
consolidated operations for such month certified by a Responsible Officer and in a form reasonably acceptable to Bank;”

 

and
inserting in lieu thereof the following:

 

“
(e) as soon as available, but no later than forty-five (45) days after the last day of each calendar quarter through and including
the calendar quarter ending June 30, 2020 (other than the fourth (4th) calendar quarter of each year), a company prepared consolidated
balance sheet and income statement covering Borrower’s consolidated operations for such month certified by a Responsible
Officer and in a form reasonably acceptable to Bank;”

 

	 	6	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 6.2 thereof:

 

“
(h) as soon as available, and in any event within ninety (90) days following the end of Borrower’s fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial
statements from an independent certified public accounting firm reasonably acceptable to Bank;

 

(i)
within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Borrower
and/or any Guarantor with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any
national securities exchange, or distributed to its shareholders, as the case may be. Documents required to be delivered pursuant
to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents,
or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address; provided, however,
Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such documents;”

 

and
inserting in lieu thereof the following:

 

    	4

    	 

    

 

“
(h) as soon as available, and in any event within ninety (90) days following the end of Borrower’s fiscal year, Borrower’s
10-K for such fiscal year as filed with the SEC, together with an unqualified opinion on the financial statements included in
the 10-K from an independent certified public accounting firm reasonably acceptable to Bank;

 

(i)
within ten (10) days of filing, copies of all periodic and other reports (other than 10-Qs and 10-Ks), proxy statements and other
materials filed by Borrower and/or any Guarantor with the SEC, any Governmental Authority succeeding to any or all of the functions
of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be. Documents required
to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower
posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address;
provided, however, Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such
documents;”

 

	 	7	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 6.2 thereof:

 

“
(k) prompt written notice of any changes to the beneficial ownership information set out in Section 14 of the Perfection Certificate.
Borrower understands and acknowledges that Bank relies on such true, accurate and up-to-date beneficial ownership information
to meet Bank’s regulatory obligations to obtain, verify and record information about the beneficial owners of its legal
entity customers;”

 

and
inserting in lieu thereof the following:

 

“
(k) prompt written notice of any changes to the beneficial ownership information set out in Section 14 of the Perfection Certificate
of any of IDC, IDLLC or IPS or Sections 2(d) and 2(e) of the Perfection Certificate of IDG. Borrower understands and acknowledges
that Bank relies on such true, accurate and up-to-date beneficial ownership information to meet Bank’s regulatory obligations
to obtain, verify and record information about the beneficial owners of its legal entity customers;”

 

	 	8	The
    Loan Agreement shall be amended in Section 6.2 thereof by (i) deleting the “and” appearing at the end of subsection
    (l), (ii) renumbering subsection (m) as subsection (o), and (iii) inserting the following new subsections (m) and (n):

 

“
(m) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated
balance sheet and income statement covering Borrower’s consolidated operations for such month certified by a Responsible
Officer and in a form reasonably acceptable to Bank;

 

(n)
as soon as available, and in any event within forty-five (45) days following the end of each fiscal quarter of Borrower, Borrower’s
10-Q for such fiscal quarter as filed with the SEC; and”

 

    	5

    	 

    

 

	 	9	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 6.3(c) thereof:

 

“Borrower
shall direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox account, or such other “blocked
account” as specified by Bank (either such account, including the Check Collections Lockbox, the “Cash Collateral
Account”). Notwithstanding the foregoing, with respect to payments on the Accounts made by check, at all times prior
to the date that is one hundred twenty (120) days from the Effective Date, such payments may be collected in any account of Borrower
maintained with Bank (provided that any such payments shall be immediately transferred to the Cash Collateral Account). On the
date that is one hundred twenty (120) days from the Effective Date and at all times thereafter, Borrower must maintain a lockbox
account with Bank for purposes of collecting payments by check (the “Check Collections Lockbox”) and must direct
all of its Account Debtors making payments by check to remit such payments to the Check Collections Lockbox.”

 

and
inserting in lieu thereof the following:

 

“Borrower
shall direct Account Debtors to deliver or transmit all proceeds of Accounts (other than proceeds from Governmental Account Debtors
making payments under Medicare or Medicaid) into a lockbox account, or such other “blocked account” as specified by
Bank (either such account, including the Check Collections Lockbox, the “Cash Collateral Account”). In addition
to the foregoing, (i) Borrower must maintain a lockbox account with Bank for purposes of collecting payments by check (the “Check
Collections Lockbox”) and must direct all of its Account Debtors making payments by check to remit such payments (other
than payments from Governmental Account Debtors making payments under Medicare or Medicaid) to the Check Collections Lockbox and
(ii) Borrower shall at all times: (A) segregate all proceeds received from Governmental Account Debtors of Borrower making payments
under Medicare or Medicaid from all other funds and proceeds from other Account Debtors and (B) instruct all Governmental Account
Debtors of Borrower making payments under Medicare or Medicaid to deliver or transmit all proceeds into a separate segregated
deposit account at Bank (the “Governmental Collateral Account”). Borrower hereby instructs Bank (which instructions
are revocable at the election of Borrower) to sweep, on a daily basis, all amounts deposited in the Governmental Collateral Account
to the Cash Collateral Account as and when funds clear and become available. Bank agrees and confirms that Borrower will have
sole dominion and “control” (within the meaning of Section 9-104 of the Code and the common law) over, and Bank will
not have “control” over, the Governmental Collateral Account and all funds therein and Bank disclaims any right of
any nature whatsoever to control or otherwise direct or make any claims against the funds held in the Governmental Collateral
Account from time to time.”

 

    	6

    	 

    

 

	 	10	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 6.8 thereof:

 

“
(a) Maintain its and all of its Subsidiaries’ operating and other deposit accounts, the Cash Collateral Account and securities/investment
accounts with Bank and Bank’s Affiliates. In addition to the foregoing, Borrower shall conduct all of its cash management
and letters of credit banking with Bank and Bank’s Affiliates. Any Guarantor shall maintain all depository, operating and
securities/investment accounts with Bank and Bank’s Affiliates.”

 

and
inserting in lieu thereof the following:

 

“
(a) Maintain its and all of its Subsidiaries’ operating and other deposit accounts, the Cash Collateral Account and excess
cash with Bank and Bank’s Affiliates. In addition to the foregoing, Borrower, any Subsidiary of Borrower and any Guarantor
shall conduct all of its cash management, letters of credit and business credit card banking with Bank and Bank’s Affiliates.
Any Guarantor shall maintain all depository, operating and excess cash with Bank and Bank’s Affiliates.”

 

	 	11	The
    Loan Agreement shall be amended by inserting the following new text, appearing at the end of Section 6.9 thereof:

 

“Notwithstanding
the foregoing, the financial covenant set forth in the immediately preceding sentence will not be tested for the month in which
the Second LMA Effective Date occurs or for any month thereafter ending prior to the Funding Date of the first Advance (if any)
made after the Second LMA Effective Date.”

 

	 	12	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 6.13 thereof:

 

“Notwithstanding
and without limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the time that Borrower or any Guarantor
forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Effective Date,”

 

and
inserting in lieu thereof the following:

 

“Notwithstanding
and without limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the time that Borrower or any Guarantor
forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Effective Date (including, without
limitation, pursuant to a Division),”

 

	 	13	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 7.1 thereof:

 

“Convey,
sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”),”

 

and
inserting in lieu thereof the following:

 

“Convey,
sell, lease, transfer, assign, or otherwise dispose of (including, without limitation, pursuant to a Division) (collectively,
“Transfer”),”

 

    	7

    	 

    

 

	 	14	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 7.3 thereof:

 

“Merge
or consolidate, or permit any Secured Guarantor to merge or consolidate, with any other Person, or acquire, or permit any Secured
Guarantor to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation,
by the formation of any Foreign Subsidiary) except for Permitted Acquisitions.”

 

and
inserting in lieu thereof the following:

 

“Merge
or consolidate, or permit any of Secured Guarantor to merge or consolidate, with any other Person, or acquire, or permit any Secured
Guarantor to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation,
by the formation of any Foreign Subsidiary or pursuant to a Division) except for Permitted Acquisitions.”

 

	 	15	The
    Loan Agreement shall be amended by deleting the following text, appearing in Section 10 thereof:

 

	 	“with
    a copy to:	Riemer
    & Braunstein LLP
	 	 	One
    Center Plaza
	 	 	Boston,
    Massachusetts 02108
	 	 	Attn:
    David A. Ephraim, Esquire
	 	 	Fax:
    (617) 880-3456
	 	 	Email:
    DEphraim@riemerlaw.com”
	 	 	 
	and inserting in lieu thereof the following:
	 	 	 
	 	“with
    a copy to:	Morrison
    & Foerster LLP
	 	 	200
    Clarendon Street, Floor 20
	 	 	Boston,
    Massachusetts 02116
	 	 	Attn:
    David A. Ephraim, Esquire
	 	 	Fax:
    (617) 830-0142
	 	 	Email:
    DEphraim@mofo.com”

 

	 	16	The
    Loan Agreement shall be amended by inserting the following new definitions, to appear alphabetically in Section 13.1 thereof:

 

“
“Division” means, in reference to any Person which is an entity, the division of such Person into two (2) or
more separate Persons, with the dividing Person either continuing or terminating its existence as part of such division, including,
without limitation, as contemplated under Section 18-217 of the Delaware Limited Liability Company Act for limited liability companies
formed under Delaware law, or any analogous action taken pursuant to any other applicable law with respect to any corporation,
limited liability company, partnership or other entity.”

 

    	8

    	 

    

 

“
“Governmental Account Debtors” means Medicare, Medicaid, any state health plan adopted pursuant to Title XIX
of the Social Security Act, any other state or federal health care program and any other Governmental Authority which presently
or in the future maintains a third party payor program.”

 

“
“Governmental Collateral Account” is defined in Section 6.3(c).”

 

“
“IPS” is Interpace Pharma Solutions, Inc., a Delaware corporation.”

 

“
“Second LMA Effective Date” is October 19, 2020.”

 

	 	17	The
    Loan Agreement shall be amended by deleting the following definitions, appearing in Section 13.1 thereof:

 

“
“Borrower” is defined in the preamble hereof.”

 

“
“IDG” is defined in the preamble hereof.”

 

and
inserting in lieu thereof the following:

 

“
“Borrower” means, individually and collectively, jointly and severally, IDG, IDC, IDLLC, and IPS.”

 

“
“IDG” is Interpace Biosciences, Inc., a Delaware corporation.”

 

	 	18	The
    Compliance Certificate appearing as Exhibit B to the Loan Agreement is hereby replaced with the Compliance Certificate
    attached as Schedule 1 hereto.

 

	 	B.	WAIVER;
    FORBEARANCE BY BANK

 

	 	1	Bank
    hereby waives Borrower’s existing default under the Loan Agreement by virtue of Borrower’s failure to comply with
    the financial covenant set forth in Section 6.9 thereof (relative to the requirement that Borrower maintain a certain Adjusted
    Quick Ratio) for the months ended July 31, 2020 and August 31, 2020 (the “Waiver Default”). Bank’s waiver
    of Borrower’s compliance of said financial covenant shall only apply to the foregoing specific periods. The foregoing
    waiver shall apply only to the Waiver Default and is not intended to be and shall not be construed as a waiver or agreement
    to waive any other defaults or Events of Default.
	 	 	 
	 	2	Borrower
    hereby acknowledges that (a) it is currently in default by virtue of Borrower’s failure to comply with the reporting
    covenant set forth in Section 6.2(e) thereof (relative to the requirement that Borrower provide Bank with a company prepared
    consolidated balance sheet and income statement covering Borrower’s consolidated operations within forty-five (45) days
    after the end of each calendar quarter) with respect to the calendar quarter ended June 30, 2020 and (b) anticipates being
    in default by virtue of Borrower’s anticipated failure to comply with the reporting requirement in Section 6.2(n) (with
    respect to the requirement that Borrower provide Bank with a copy of Borrower’s 10-Q as filed with the SEC within forty-five
    (45) days of the end of each fiscal quarter) with respect to the fiscal quarter ending September 30, 2020 (collectively, the
    “Forbearance Default”). Bank hereby agrees to forbear from exercising its rights and remedies with respect to
    the Forbearance Default from the date of this Loan Modification Agreement until the earlier to occur of (a) the occurrence
    of any Event of Default (other than the Forbearance Default) or (b) December 31, 2020. Bank further agrees that, in the event
    that, on or prior to December 31, 2020, Borrower provides Bank with a copy of a 10-Q as filed with the SEC for each of the
    fiscal quarters ended June 30, 2020 and September 30, 2020, then the Forbearance Default shall be deemed to be waived by Bank.

 

    	9

    	 

    

 

Borrower
hereby acknowledges and agrees that except as specifically provided herein, nothing in this Section 3.B. or anywhere in this Loan
Modification Agreement shall be deemed or otherwise construed as a waiver by Bank of the Waiver Default or Forbearance Default
or any of its rights and remedies pursuant to the Loan Documents, applicable law or otherwise.

 

9.
Future Credit Extensions. Notwithstanding any terms in this Loan Modification
Agreement or in the Loan Agreement to the contrary, on and after the date of this Loan Modification Agreement, the determination
of whether to make any Credit Extension shall be in Bank’s sole and absolute discretion in each instance.

 

10.
FEES AND EXPENSES. Borrower shall reimburse Bank for all out-of-pocket reasonable and documented legal fees and expenses
incurred in connection with this amendment to the Existing Loan Documents.

 

11.
PERFECTION CERTIFICATES.

 

(a)
IDG hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate
dated as of October 19, 2020 (the “IDG Perfection Certificate”) delivered by IDG to Bank, and acknowledges, confirms
and agrees that the disclosures and information IDG provided to Bank in such Perfection Certificate have not changed, as of the
date hereof.

 

(b)
Except as set forth on Schedule 2 attached hereto, IDC hereby ratifies, confirms and reaffirms, all and singular,
the terms and disclosures contained in a certain Perfection Certificate dated as of November 13, 2018 (the “IDC Perfection
Certificate”) delivered by IDC to Bank, and acknowledges, confirms and agrees that the disclosures and information IDC provided
to Bank in such Perfection Certificate have not changed, as of the date hereof.

 

(c)
Except as set forth on Schedule 2 attached hereto, IDLLC hereby ratifies, confirms and reaffirms, all and singular,
the terms and disclosures contained in a certain Perfection Certificate dated as of November 13, 2018 (the “IDLLC Perfection
Certificate”) delivered by IDLLC to Bank, and acknowledges, confirms and agrees that the disclosures and information IDLLC
provided to Bank in such Perfection Certificate have not changed, as of the date hereof.

 

(d)
In connection with this Loan Modification Agreement, New Borrower has delivered to Bank a Perfection Certificate signed by New
Borrower dated as of the date of this Loan Modification Agreement (the “New Borrower Perfection Certificate”). New
Borrower represents and warrants to Bank that: (i) New Borrower’s exact legal name is that indicated on the New Borrower
Perfection Certificate and on the signature page hereof; and (ii) New Borrower is an organization of the type, and is organized
in the jurisdiction, set forth in the New Borrower Perfection Certificate; and (iii) the New Borrower Perfection Certificate accurately
sets forth New Borrower’s organizational identification number or accurately states that New Borrower has none; (iv) the
New Borrower Perfection Certificate accurately sets forth New Borrower’s place of business, or, if more than one, its chief
executive office as well as New Borrower’s mailing address if different, and (v) all other information set forth on the
New Borrower Perfection Certificate pertaining to New Borrower is accurate and complete.

 

Borrower
hereby acknowledges and agrees that all references in the Loan Agreement to the “Perfection Certificate” shall mean
and include, collectively, the IDG Perfection Certificate, the IDC Perfection Certificate, the IDLLC Perfection Certificate, and
the New Borrower Perfection Certificate.

 

    	10

    	 

    

 

12.
CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described
above.

 

13.
RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security
or other collateral granted to Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations

 

14.
RELEASE BY BORROWER.

 

	 	A.	FOR
    GOOD AND VALUABLE CONSIDERATION, Borrower hereby forever relieves, releases, and discharges Bank and its present or former
    employees, officers, directors, agents, representatives, attorneys (each, a “Released Person”), and each of them,
    from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions
    and causes of action, of every type, kind, nature, description or character whatsoever, whether known or unknown, suspected
    or unsuspected, absolute or contingent, arising out of or in any manner whatsoever connected with or related to facts, circumstances,
    issues, controversies or claims existing or arising from the beginning of time through and including the date of execution
    of this Loan Modification Agreement (collectively “Released Claims”). Without limiting the foregoing, the Released
    Claims shall include any and all liabilities or claims arising out of or in any manner whatsoever connected with or related
    to the Loan Documents, the recitals hereto, any instruments, agreements or documents executed in connection with any of the
    foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing. Notwithstanding
    the foregoing, Released Claims shall not include any claim directly caused by a Released Person’s gross negligence or
    willful misconduct.
	 	 	 
	 	B.	In
    furtherance of this release, Borrower expressly acknowledges and waives any and all rights under Section 1542 of the California
    Civil Code, which provides as follows:

 

“a
general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or
her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement
with the debtor or released party.” (Emphasis added.)

 

	 	C.	By
    entering into this release, Borrower recognizes that no facts or representations are ever absolutely certain and it may hereafter
    discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the
    intention of Borrower hereby to fully, finally and forever settle and release all matters, disputes and differences, known
    or unknown, suspected or unsuspected; accordingly, if Borrower should subsequently discover that any fact that it relied upon
    in entering into this release was untrue, or that any understanding of the facts was incorrect, Borrower shall not be entitled
    to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances
    whatsoever. Borrower acknowledges that it is not relying upon and has not relied upon any representation or statement made
    by Bank with respect to the facts underlying this release or with regard to any of such party’s rights or asserted rights.
	 	 	 
	 	D.	This
    release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit,
    or other proceeding that may be instituted, prosecuted or attempted in breach of this release. Borrower acknowledges that
    the release contained herein constitutes a material inducement to Bank to enter into this Loan Modification Agreement, and
    that Bank would not have done so but for Bank’s expectation that such release is valid and enforceable in all events.

 

    	11

    	 

    

 

	 	E.	Borrower
    hereby represents and warrants to Bank, and Bank is relying thereon, as follows:

 

	 	1	Except
    as expressly stated in this Loan Modification Agreement, neither Bank nor any agent, employee or representative of Bank has
    made any statement or representation to Borrower regarding any fact relied upon by Borrower in entering into this Loan Modification
    Agreement.
	 	 	 
	 	2	Borrower
    has made such investigation of the facts pertaining to this Loan Modification Agreement and all of the matters appertaining
    thereto, as it deems necessary.
	 	 	 
	 	3	The
    terms of this Loan Modification Agreement are contractual and not a mere recital.
	 	 	 
	 	4	This
    Loan Modification Agreement has been carefully read by Borrower, the contents hereof are known and understood by Borrower,
    and this Loan Modification Agreement is signed freely, and without duress, by Borrower.
	 	 	 
	 	5	Borrower
    represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every
    other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer,
    to any person, firm or entity any claims or other matters herein released. Borrower shall indemnify Bank, defend and hold
    it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments
    or transfers of any claims or matters released herein.

 

15.
CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s
representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant
to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s
agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank
to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction
of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.

 

16.
COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower
and Bank.

 

[The
remainder of this page is intentionally left blank]

 

    	12

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Loan Modification Agreement to be executed as a sealed instrument under the
laws of the Commonwealth of Massachusetts as of the date first written above.

 

	EXISTING
    BORROWER:	 	BANK:
	 	 	 
	INTERPACE
    BIOSCIENCES, INC.	 	SILICON
    VALLEY BANK
	 	 	 
	By:	/s/
    Jack Stover 	 	By:	/s/
    Michael McMahon
	Name:	Jack
    E. Stover	 	Name:	Michael
    McMahon
	Title:	President
    and Chief Executive Officer	 	Title:	Director
	 	 	 	 
	INTERPACE
    DIAGNOSTICS CORPORATION	 	 	 
	 	 	 	 
	By:	/s/
    Jack Stover 	 	 	 
	Name:	Jack
    E. Stover	 	 	 
	Title:	President
    and Chief Executive Officer	 	 	 
	 	 	 	 
	INTERPACE
    DIAGNOSTICS, LLC	 	 	 
	 	 	 	 
	By:	/s/
    Jack Stover 	 	 	 
	Name:	Jack
    E. Stover	 	 	 
	Title:	President
    and Chief Executive Officer	 	 	 
	 	 	 	 	 
	NEW
    BORROWER:	 	 	 
	 	 	 	 
	INTERPACE
    PHARMA SOLUTIONS, INC.	 	 	 
	 	 	 	 
	By:	/s/
    Jack Stover 	 	 	 
	Name:	Jack
    E. Stover	 	 	 
	Title:	President
    and Chief Executive Officer	 	 	 

 

    	 

    	 

    

 

Schedule
1

 

EXHIBIT
B

COMPLIANCE
CERTIFICATE

 

Intentionally
omitted.

 

    	 

    	 

    

 

Schedule
2

 

Perfection
Certificate Updates

 

Intentionally
omitted.Document

EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of October 19, 2020 by and between Ontrak, Inc., a Delaware corporation (“Employer” or “Company”), and Rob Newton, an individual (“Employee”).
RECITALS
A.    WHEREAS, Employee has experience and expertise applicable to employment with Employer to perform as a General Counsel and Secretary of Employer, Employer has agreed to employ Employee and Employee has agreed to enter into such employment, on the terms set forth in this Agreement.
B.    WHEREAS, Employee acknowledges that this Agreement is necessary for the protection of Employer’s investment in its business, good will, products, methods of operation, information, and relationships with its customers and other employees.
C.    WHEREAS, Employer acknowledges that Employee desires definition of his compensation and benefits, and other terms of his employment.
NOW, THEREFORE, in consideration thereof and of the covenants and conditions contained herein, the parties agree as follows:
AGREEMENT
1.TERM OF AGREEMENT
1.1 Term.  The initial term of this Agreement shall begin on October 19, 2020 (the “Commencement Date”) and shall continue until the earlier of:  (a) the date on which it is terminated pursuant to Section 5 of this Agreement; or (b) three (3) years following the Commencement Date (“Initial Term”).  After the expiration of the Initial Term, this Agreement will renew for another three (3) year term (the “Renewal Term,” together with the Initial Term, the “Term”), unless either party provides written notice of termination of the Agreement within ninety (90) days of the end of the Initial Term.  As used herein, the “Employment Period” means the period of Employee’s employment hereunder (regardless of whether such period ends prior to the end of the Term and regardless of the reason for Employee’s termination of employment hereunder).
2.EMPLOYMENT
2.1  Employment of Employee.  Employer agrees to employ Employee to render services on the terms set forth herein.  Employee hereby accepts such employment on the terms and conditions of this Agreement.  Notwithstanding, this Agreement shall become effective only if Employee completes to the satisfaction of Employer in its sole discretion Employer’s standard 

Rob Newton– Employment Agreement 

background investigation (it shall be deemed completed to Employer’s satisfaction if Employer has not notified Employee to the contrary before the Commencement Date).
2.2   Position and Duties.  Employee shall serve as General Counsel and Secretary of Employer, reporting to Employer’s Chairman and Chief Executive Officer and shall have the general powers, duties and responsibilities of management usually vested in that office in a corporation and such other powers and duties as may be prescribed from time to time by the Company.
2.3   Standard of Performance.  Employee agrees that he will at all times faithfully and industriously and to the best of his ability, experience, and talents perform all the duties that may be required of and from him pursuant to the terms of this Agreement and consistent with his position.  Such duties shall be performed at Employee’s residence in Nevada, or upon mutual agreement at such place or places as the interests, needs, business, and opportunities of Employer shall reasonably require or render advisable.
2.4   Exclusive Service.  
                 (a) Employee shall devote substantially all of his business energies and abilities and substantially all of his productive time to the performance of his duties under this Agreement (reasonable absences during holidays and vacations excepted), and shall not, without the prior written consent of Employer, render to others any service of any kind (whether or not for compensation) that, in the opinion of Employer, would materially interfere with the performance of his duties under this Agreement, and 
                    (b) Employee shall not, without the prior written consent of Employer, maintain any affiliation with, whether as an agent, consultant, employee, officer, director, trustee or otherwise, nor shall he directly or indirectly render any services of an advisory nature or otherwise to, or participate or engage in, any other business activity.  
3.COMPENSATION
3.1   Compensation.  During the Employment Period only, Employer shall pay the amounts and provide the benefits described in this Section 3, and Employee agrees to accept such amounts and benefits in full payment for Employee’s services under this Agreement.
3.2   Base Salary.  Employer shall pay to Employee a base salary of two hundred fifty thousand dollars ($250,000) annually in equal bi-weekly installments, less applicable taxes.  Employee’s compensation (including his base salary and discretionary bonus set forth in Section 3.3 below) shall be subject to annual review by Employer based on, among other things, Employee’s performance and Employer’s progress towards its milestones and profitability. 
3.3   Discretionary Bonus.  Employee is eligible to receive an annual bonus in the sole discretion of Employer.  This discretionary bonus will be targeted at forty percent (40%) of Employee’s annual base salary less any Target Bonus Adjustment (as defined below) and will be based on Employee achieving individual goals and milestones, and the overall performance and profitability of the Company. Except as described in Sections 5.2 and 5.4 below, any such bonus shall be payable in the 
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Rob Newton– Employment Agreement 

calendar year following the performance year subject to the Employee’s continued employment with Employer through the last day of the applicable performance year.  For clarity, any such bonus cannot be less than zero dollars ($0).  If the closing price of the Employer’s common stock on December 31 of a given calendar year is lower than the closing price of such stock on January 1 of such calendar year, the “Target Bonus Adjustment” for such calendar year shall be zero (0).  If the closing price of the Employer’s common stock on December 31 of a given calendar year is higher than the closing price of such stock on January 1 of such calendar year, the “Target Bonus Adjustment” for such calendar year shall equal the product of the following three numbers:  (i) the difference between such two closing prices, (ii) one-fifth (1/5), and (iii) the number of vested shares of Employer’s common stock that Employee has as of December 31 of such calendar year.
3.4   Equity Incentive Plan.  In connection with this Agreement and within forty-five days of the Commencement Date, Employee shall receive an option to purchase one hundred thousand (100,000) shares of Employer’s common stock (the “Option”), with a per share exercise price equal to the closing price of a share of the Employer’s common stock on the date the Option is granted, under and subject to all of the provisions of Employer’s 2017 Stock Incentive Plan (the “Plan”) and applicable award agreement, upon and subject to approval by Employer’s Board of Directors (the “Board”) .  The Option will vest over three years from date of its grant with one-third (1/3) of the Option vesting one year from the Commencement Date, and the remainder of the Option vesting in equal monthly installments thereafter according to the terms of the Plan and applicable award agreement.  Except as otherwise set forth herein or in the Plan and applicable award agreement, vesting of the Option will cease upon the termination of Employee’s employment with Employer for any reason. 
3.5   Fringe Benefits.  Subject to Section 3.7 below, Employee will be entitled:
(a)  to participate, on the same basis as other employees of the Company, in any medical, dental, vision, life, short-term and long-term disability insurance and flexible spending accounts (subject to certain co-payments by Employee).  Employee’s participation in such plans shall be subject to all terms and conditions of such plans, including Employee’s ability to satisfy any medical or health requirements imposed by the underwriters of any insurance policies paid to fund the plans; and  
(b)  to participate after two full calendar months of employment with Employer, on the same basis as other employees of the Company, in the Company’s 401(k) plan, with said participation subject to all terms and conditions of such plans.
3.6   Paid Time Off.  Employee shall be entitled to participate in Employer’s flexible vacation policy after 90 days of employment with Employer, subject and pursuant to the terms of such policy as set forth in Employer’s then current employee handbook.
3.7   Deduction from Compensation.  Employer shall deduct and withhold from all compensation payable to Employee all amounts required to be deducted or withheld pursuant to any present or future law, ordinance, regulation, order, writ, judgment, or decree requiring such deduction and withholding.
4.REIMBURSEMENT OF EXPENSES
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Rob Newton– Employment Agreement 

4.1   Travel and Other Expenses.  Employer shall pay to or reimburse Employee for those travel, promotional, professional continuing education and licensing costs (to the extent required), professional society membership fees, seminars and similar expenditures incurred by Employee that Employer determines are reasonably necessary for the proper discharge of Employee’s duties under this Agreement and for which Employee submits appropriate receipts and indicates the amount, date, location and business character in a timely manner.
4.2   Liability Insurance.  Employer shall provide Employee with officers and directors’ insurance, or other liability insurance, consistent with its usual business practices, to cover Employee against all insurable events related to his employment with Employer. 
4.3   Indemnification.  Promptly upon written request from Employee, Employer shall indemnify, and advance expense to, Employee, to the fullest extent under applicable law, for all judgments, fines, settlements, losses, costs or expenses (including attorney’s fees), arising out of Employee’s activities as an agent, employee, officer or director of Employer, or in any other capacity on behalf of or at the request of Employer.  Such agreement by Employer shall not be deemed to impair any other obligation of Employer respecting indemnification of Employee otherwise arising out of this or any other agreement or promise of Employer or under any statute.
5.TERMINATION
5.1   Termination by Employer With Good Cause; Employee Resignation.  Employer may terminate Employee’s employment at any time, with notice for Good Cause (as defined below).  Similarly, Employee may resign his employment with Employer at any time, with notice and without Good Reason (as defined below).  If Employer terminates Employee’s employment with Good Cause, or if Employee resigns without Good Reason, then Employer shall pay Employee his base salary prorated through the date of termination, at the rate in effect at the time notice of termination is given, together with any benefits accrued through the date of termination (collectively the “Accrued Benefits”).  In addition, the stock option award agreements (the “Option Agreements”) for all options to purchase the common stock of the Company granted to Employee during his employment with the Company (the “Options”) shall provide that, notwithstanding any contrary provisions in the Plan, in the event Employee’s employment is terminated by Employer with Good Cause, the Options to the extent then vested and exercisable as of the date Employee’s employment is terminated, and not previously terminated in accordance with the Option Agreements and the Plan, may be exercised within twelve (12) months after such termination date, or on or prior to the Option Expiration Date (as specified and defined in the respective Stock Option Grant Notices for the Options), whichever is earlier. Except with respect to any outstanding equity compensation agreements and the provisions of Section 4, Employer shall have no further obligations to Employee under this Agreement or any other agreement relating to or arising out of Employee’s status as an employee of Employer (as opposed to some other status with respect to Employer, such as a shareholder or holder of a stock option).
5.2   Termination Without Good Cause or for Good Reason.  Employer shall have the right to terminate Employee’s employment (with notice) without Good Cause and Employee shall have the right to terminate Employee’s employment (with notice) for Good Reason (each a “Qualifying Termination”).  If there is a Qualifying Termination then the following provisions in this Section 5.2 shall apply:
    - 4 -

Rob Newton– Employment Agreement 

(a)  Employer shall provide Employee with the Accrued Benefits;
(b)  On the six (6) month anniversary of the date Employee’s termination becomes effective, Employer shall pay Employee in a lump sum an amount equal to (6) months’ base salary (at the rate in effect at the time of termination, but disregarding any reduction that constitutes Good Reason), plus a pro-rata share of any bonus earned for the year of termination; employee acknowledges that any and all bonuses are at the discretion of the Board and at the advice of the Compensation Committee. 
(c)If Employee timely elects continued coverage under COBRA, Employer will pay Employee’s COBRA premiums necessary to continue Employee’s coverage (including coverage for eligible dependents, if applicable) (“COBRA Premiums”) through the period (the “COBRA Premium Period”) starting on the date of termination and ending on the earliest to occur of: (i) six months following the date of termination or (ii) the date Employee and Employee’s eligible dependents, if applicable, become eligible for group health insurance coverage through a new employer. In the event Employee becomes covered under another employer’s group health plan during the COBRA Premium Period, Employee must immediately notify Employer of such event.
(d)  Notwithstanding Section 3.4, the award agreements (the “Stock Agreements”) for all common stock granted to Employee by the Company prior to the termination date (collectively, the “Granted Stock”) and the Option Agreements for the Options shall provide that the Granted Stock and Options will continue to vest (and become exercisable) for a period of twelve (12) months following the date of termination.  In addition, the Option Agreements for the Options shall provide that, notwithstanding any contrary provisions in the Plan, any vested portion of the Options not previously terminated in accordance with the Option Agreements and the Plan, may be exercised within twenty-four (24) months after such termination date, or on or prior to the Option Expiration Date (as specified and defined in the respective Stock Option Grant Notices for the Options), whichever is earlier.
To be eligible for the severance payment provided for in this Section 5.2, Employee must have executed and not revoked a full and complete general release of any and all claims against Employer and related persons and entities in the standard form then used by Employer (“Release”), within 60 days of the date of termination.  Upon making all of the applicable severance payments and benefits, except with respect to any outstanding equity compensation agreements and the provisions of Section 4, Employer shall have no further obligations to Employee under this Agreement or any other agreement relating to or arising out of Employee’s status as an employee of Employer (as opposed to some other status with respect to Employer, such as a shareholder or holder of a stock option).
5.3   Good Cause. For purposes of this Agreement, a termination shall be for “Good Cause” if Employee, in the subjective, good faith opinion of Employer, shall:
(a) Commit an act of fraud, moral turpitude, misappropriation of funds or embezzlement in connection with his duties;
(b) Breach Employee’s fiduciary duty to Employer, including, but not limited to, acts of self-dealing (whether or not for personal profit);
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Rob Newton– Employment Agreement 

(c)Materially breach this Agreement, the Confidentiality Agreement (defined below), or Employer’s written Codes of Ethics as adopted by the Board; 
(d) Willfully, recklessly or negligently violate any material provision of Employer’s written Employee Handbook, or any applicable state or federal law or regulation;
(e) Fail or refuse (whether willfully, recklessly or negligently) to materially comply with all relevant and material obligations, assumable and personally chargeable to an executive of his corporate rank and responsibilities, under the Sarbanes-Oxley Act and the regulations of the Securities and Exchange Commission promulgated thereunder (for avoidance of doubt any failure by the Company to comply with foregoing laws and regulations shall not be imputed on to Employee for purposes of this provision);
(f) Fail to or refuse to (whether willfully, recklessly or negligently) to perform the responsibilities and duties specified herein (other than a failure caused by temporary disability and provided further that the mere failure to achieve certain goals or objectives (provided Employee has attempted in good faith to achieve such goals and objectives) shall not constitute Good Cause);
(g) Be convicted of, or enter a plea of guilty or no contest to, a felony or misdemeanor under state or federal law in a court of competent jurisdiction, other than a traffic violation or misdemeanor not involving dishonesty or moral turpitude;
(h) Become listed on the federal debarment list prohibiting participation in Medicare or Medicaid; or
(i) Fail to return any compensation amount required to be clawed back or returned to Employer by application of any applicable law or regulation.
The foregoing is an exhaustive list of the items that constitute Cause under this Agreement.  Notwithstanding the foregoing, other than with respect to clause (g), “Good Cause” shall only be found to exist if, prior to Employee’s termination and within ninety (90) days after the Company’s initial awareness of an event of Good Cause, Employer has provided written notice to the Employee describing such Good Cause event(s), and the Employee does not cure such event within ten (10) days following the Employee’s receipt of such notice from the Company, and the date of Employee’s termination of employment due to such Good Cause occurs within ninety (90) days after the expiration of the foregoing ten (10) day cure period.  
5.4   Death or Disability.  To the extent consistent with federal and state law, upon written notice to Employee, Employer may terminate Employee’s employment due to Employee’s Disability.  Additionally, Employee’s employment shall terminate on Employee’s death.  “Disability” means (i) Employee’s inability to engage in any substantial, gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) Employee is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income 
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Rob Newton– Employment Agreement 

replacement benefits for a period of not less than three (3) months under an accident or health plan covering Employer’s employees.  In the event of termination due to death or Disability, Employer shall pay Employee (or his legal representative) his base salary prorated through the date of termination, at the rate in effect at the time of termination, together with any benefits accrued, including, but not limited to, a pro-rata share of any bonus earned for the year of termination, through the date of termination.  Any such bonus shall be payable in the calendar year following the performance year.  Notwithstanding Section 3.4, the Stock Agreements for the Granted Stock and the Option Agreements for the Options shall provide that, notwithstanding any contrary provisions in the Plan, in the event Employee’s employment is terminated due to Employee’s death or Disability, all then unvested portions of the Granted Stock and Options will immediately vest in full and, in the case of the Options, be exercisable as of the termination date.  In addition, the Option Agreements for the Options shall provide that, notwithstanding any contrary provisions in the Plan, in the event Employee’s employment is terminated due to Employee’s death or Disability, any vested portion of the Options not previously terminated in accordance with the Option Agreements and the Plan, may be exercised within five (5) years after the termination date, or on or prior to the Option Expiration Date (as specified and defined in the respective Stock Option Grant Notices for the Options), whichever is earlier.
5.5   Return of Employer Property.  Within five (5) days after the Employees termination of employment, Employee shall return to Employer all products, books, records, forms, specifications, formulae, data processes, designs, papers and writings relating to the business of Employer including without limitation proprietary or licensed computer programs, customer lists and customer data, and/or copies or duplicates thereof in Employee’s possession or under Employee’s control.  Employee shall not retain any copies or duplicates of such property and all licenses granted to him by Employer to use computer programs or software shall be revoked on the termination date.
5.6   Good Reason.  For purposes of this Agreement, a termination shall be for “Good Reason” if Employer:
(a) Materially reduced the material duties and responsibilities assigned to Employee under this Agreement;
(b) Reduced Employee’s base salary; or
(c)Materially breached this Agreement or any other written agreement with Employee.
(d) Required relocation of employee greater than 50 miles from his current residence.
Notwithstanding the foregoing, “Good Reason” shall only be found to exist if, prior to Employee’s resignation and within ninety (90) days after the initial existence of an event of Good Reason, Employee has provided written notice to the Company describing such alleged Good Reason event(s), and the Company does not cure such event within thirty (30) days following the Company’s receipt of such notice from Employee, and the date of Employee’s termination of employment due to Employee’s resignation for Good Reason occurs within ninety (90) days after the expiration of the foregoing thirty (30) day cure period.  
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Rob Newton– Employment Agreement 

6.DUTY OF LOYALTY
6.1   During the Employment Period, Employee shall not, without the prior written consent of Employer, directly or indirectly render services of a business, professional, or commercial nature to any person or firm, whether for compensation or otherwise, or engage in any activity directly or indirectly competitive with or adverse to the business or welfare of Employer, whether alone, as a partner, or as an officer, director, employee, consultant, or holder of more than one percent (1%) of the capital stock of any other corporation.  Otherwise, Employee may make personal investments in any other business so long as these investments do not require him to participate in the operation of the companies in which he invests.
7.CONFIDENTIAL INFORMATION
7.1   Trade Secrets of Employer.  Employee, during the Employment Period, will develop, have access to and become acquainted with various trade secrets and confidential information which are owned by Employer and/or its affiliates and which are regularly used in the operation of the businesses of such entities.  Employee shall not disclose such trade secrets or confidential information, directly or indirectly, or use them in any way, either during the Employment Period or at any time thereafter, except as required in the course of his employment by Employer, provided that the foregoing provisions shall not apply to information that is or becomes public at any time due to no fault of Employee, or which Employee is required to disclose in direct response to a judicial or regulatory order or process.  All files, contracts, manuals, reports, letters, forms, documents, notes, notebooks, lists, records, documents, customer lists, vendor lists, purchase information, designs, computer programs and similar items and information, relating to the businesses of such entities, whether prepared by Employee or otherwise and whether now existing or prepared at a future time, coming into his possession shall remain the exclusive property of such entities, and shall not be removed for purposes other than work-related from the premises where the work of Employer is conducted, except with the prior written authorization by Employer.
7.2   Confidential Data of Customers of Employer.  Employee, in the course of his duties, will have access to and become acquainted with financial, accounting, statistical and personal data of customers of Employer and of their affiliates.  All such data is confidential and shall not be disclosed, directly or indirectly, or used by Employee in any way, either during the Employment Period (except as required in the course of employment by Employer) or at any time thereafter, provided that the foregoing provisions shall not apply to information that is or becomes public at any time due to no fault of Employee, or which Employee is required to disclose in direct response to a judicial or regulatory order or process.
7.3   Continuing Effect.  The provisions of this Section 7 shall remain in effect after the end of the Employment Period.
8.NO SOLICITATION
8.1   No Solicitation of Employees.  Employee agrees that he will not, during his employment with Employer, and for one (1) year thereafter, encourage or solicit any other employee of Employer to terminate his or her employment for any reason, nor will he assist others to do so 
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Rob Newton– Employment Agreement 

(provided however that former Company employees and/or Company employees responding to general ads or solicitations shall not be covered by this Section 8.1).  
8.2   No Solicitation of Customer.  Employee agrees that he will not, during his employment with Employer, and for two (2) years thereafter, directly or indirectly, utilize any Company information protected under the Confidentiality Agreement to solicit any client or customer of Employer known to him with respect to any business, products or services that are competitive to the products or services offered by Employer, or under development as of the date of the termination of Employee’s employment with Employer for any reason.  
9.INTELLECTUAL PROPERTIES.
To the extent permissible under applicable law, all intellectual properties made or conceived by Employee during the term of this employment by Employer shall be the right and property solely of Employer, whether developed independently by Employee or jointly with others. The Employee will sign the Employer’s standard Employee Innovation, Proprietary Information and Confidentiality Agreement (“Confidentiality Agreement”).
10.OTHER PROVISIONS
10.1   Compliance With Other Agreements.  Employee represents and warrants to Employer that the execution, delivery and performance of this Agreement will not conflict with or result in the violation or breach of any term or provision of any order, judgment, injunction, contract, agreement, commitment or other arrangement to which Employee is a party or by which he is bound.  
10.2   Injunctive Relief.  Employee acknowledges that the services to be rendered under this Agreement and the items described in Sections 6, 7, 8 and 9 of this Agreement are of a special, unique and extraordinary character, that it would be difficult or impossible to replace such services or to compensate Employer in money damages for a breach of this Agreement.  Accordingly, Employee agrees and consents that if he violates any of the provisions of this Agreement, Employer, in addition to any other rights and remedies available under this Agreement or otherwise, shall be entitled to temporary and permanent injunctive relief, without the necessity of posting any bond or other undertaking in connection therewith.
10.3   Attorneys’ Fees.  The prevailing party in any suit or other proceeding brought to enforce, interpret or apply any provisions of this Agreement, shall be entitled to recover all costs and expenses (not limited to court costs and including, without limitation, all attorneys’ fees) it incurred in connection with the proceeding and the underlying dispute.
10.4   Counsel. The parties acknowledge and represent that, prior to the execution of this Agreement, they have had an opportunity to consult with their respective counsel concerning the terms and conditions set forth herein.  Additionally, Employee represents that he has had an opportunity to receive independent legal advice concerning the taxability of any consideration received under this Agreement.  Employee has not relied upon any advice from Employer and/or its attorneys with respect to the taxability of any consideration received under this Agreement.  Employee further acknowledges that Employer has not made any representations to him with respect to tax issues.
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Rob Newton– Employment Agreement 

10.5   Nondelegable Duties.  This is a contract for Employee’s personal services.  The duties of Employee under this Agreement are personal and may not be delegated or transferred in any manner whatsoever, and shall not be subject to involuntary alienation, assignment or transfer by Employee during his life.
10.6   Governing Law.  The validity, construction and performance of this Agreement shall be governed by the laws, without regard to the laws as to choice or conflict of laws, of the State of Delaware.
10.7   Venue.  If any dispute arises regarding the application, interpretation or enforcement of any provision of this Agreement, including fraud in the inducement, such dispute shall be resolved by final and binding arbitration pursuant to the terms set forth in Employer’s employee handbook.
10.8   No Punitive Damages. If any dispute arises regarding the application, interpretation or enforcement of any provision of this Agreement, including fraud in the inducement, the parties hereby waive their right to seek punitive damages in connection with said dispute.
10.9   Severability.  The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions, and this Agreement shall be construed in all respects as if any invalid or unenforceable provision were omitted.
10.10   Binding Effect.  The provisions of this Agreement shall bind and inure to the benefit of the parties and their respective successors and permitted assigns.
10.11   Notice.  Any notices or communications required or permitted by this Agreement shall be deemed sufficiently given if in writing and when delivered personally or forty-eight (48) hours after deposit with the United States Postal Service as registered or certified mail, postage prepaid and addressed as follows:
(a) If to Employer, to the principal office of Employer in the State of California, marked “Attention: President”; or
(b) If to Employee, to the most recent address for Employee appearing in Employer’s records.
10.12   Headings.  The Section and other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

10.13   Section 409A Compliance.
(a) This Agreement is intended to comply with the provisions of Section 409A of the Internal Revenue Code (“Section 409A”), and, to the extent practicable, this Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid 
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Rob Newton– Employment Agreement 

or provided in a manner that is either exempt from or compliant with the requirements of Section 409A and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Terms used in this Agreement shall have the meanings given such terms under Section 409A if, and to the extent required, in order to comply with Section 409A.
(b) For purposes of amounts payable under this Agreement, the termination of employment shall be deemed to be effective upon “separation from service” with Employer, as defined under Section 409A and the guidance issued thereunder.  Any payments subject to Section 409A that are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as termination of employment) occurs shall commence payment only in such following calendar year as necessary to comply with Section 409A.
(c)Notwithstanding anything to the contrary in this Agreement, to the extent required to avoid additional taxes and interest charged under Section 409A, if any of Employer’s stock is publicly traded and Employee is deemed to be a “specified employee” as determined by Employer for purposes of Section 409A, Employee agrees that any non-qualified deferred compensation payments due to him under this agreement in connection with a termination of employment that would otherwise have been payable at any time during the six (6)-month period immediately following such termination of employment shall not be paid prior to, and shall instead be payable in a lump sum on the first day of the seventh (7th) month following Employee’s separation from service (or, if Employee dies during such period, within 30 days after Employee’s death).
(d) Neither Employer nor Employee shall have the right to accelerate or defer the delivery of, offset or assign any payment under this Agreement that constitutes “nonqualified deferred compensation” subject to Section 409A of the Code, except to the extent specifically permitted or required by Section 409A of the Code.
(e) If Employee is entitled to be paid or reimbursed for any taxable expenses under this Agreement, and such payments or reimbursements are includible in Employee’s federal gross taxable income, the amount of such expenses reimbursable in any one calendar year shall not affect the amount reimbursable in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. No right of Employee to reimbursement of expenses under this Agreement shall be subject to liquidation or exchange for another benefit.
(f) Notwithstanding the foregoing, the tax treatment of the payments and benefits provided under this Agreement is not warranted or guaranteed. To the extent that this Agreement or any payment or benefit hereunder shall be deemed not to comply with Section 409A, neither Employer, nor the Board, nor any member of its Compensation Committee, nor any of their successors shall be liable to Employee or to any other person for any taxes, interest, penalties or other monetary amounts owed by Employee as a result of the application of Section 409A or for reporting in good faith any amounts as subject thereto.
10.14   Amendment and Waiver.  This Agreement may be amended, modified or supplemented only by a writing executed by each of the parties, which in the case of Employer must be 
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Rob Newton– Employment Agreement 

Employer’s CEO.  Either party may in writing waive any provision of this Agreement to the extent such provision is for the benefit of the waiving party.  Any such waiver by Employer must be signed by Employer’s CEO.  No waiver by either party of a breach of any provision of this Agreement shall be construed as a waiver of any subsequent or different breach, and no forbearance by a party to seek a remedy for noncompliance or breach by the other party shall be construed as a waiver of any right or remedy with respect to such noncompliance or breach.
10.15   Entire Agreement.  This Agreement is the only agreement and understanding between the parties pertaining to the subject matter of this Agreement, and supersedes all prior agreements, summaries of agreements, descriptions of compensation packages, discussions, negotiations, understandings, representations or warranties, whether verbal or written, between the parties pertaining to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement with effectiveness as of the day and year first above written.
EMPLOYEE:
/s/ Rob Newton                    
     Rob Newton                        
EMPLOYER:
ONTRAK, INC.
By /s/ Terren Peizer        
     Terren Peizer
     Chairman and Chief Executive Officer
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