Document:

EX-4.1

 Exhibit 4.1 

SECOND RESTATED CERTIFICATE OF INCORPORATION 

OF 
 PQ GROUP HOLDINGS
INC. 
 PQ Group Holdings Inc., a Delaware corporation (the “Corporation”), hereby certifies that this Second Restated
Certificate of Incorporation has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware (the “DGCL”), and that: 

A. The name of the Corporation is: PQ Group Holdings Inc. 

B. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of Delaware on August 7, 2015 and
was amended and restated on May 4, 2016, corrected on May 26, 2016 and further amended on September 22, 2017 (as so amended, restated and corrected, the “Original Certificate of Incorporation”). 

C. This Second Restated Certificate of Incorporation amends and restates the Original Certificate of Incorporation. 

D. The Certificate of Incorporation upon the filing of this Second Restated Certificate of Incorporation, shall read as follows: 

ARTICLE I — NAME 
 The name
of the corporation is PQ Group Holdings Inc. (the “Corporation”). 
 ARTICLE II — REGISTERED OFFICE AND AGENT 

The address of the Corporation’s registered office in the State of Delaware is 850 New Burton Road, Suite 201, Dover, Kent County, DE
19904. The name of the Corporation’s registered agent at such address is Cogency Global Inc. 
 ARTICLE III — PURPOSE 

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware (the “DGCL”). 
 ARTICLE IV — CAPITALIZATION 

(a) Authorized Shares. The total number of shares of stock which the Corporation shall have authority to issue is 500,000,000,
consisting of 450,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”), and 50,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”). Such stock may be issued from
time to time by the Corporation for such consideration as may be fixed by the board of directors of the Corporation (the “Board of Directors”). 

 (b) Common Stock. Subject to the powers, preferences and rights of any Preferred Stock,
including any series thereof, having any preference or priority over, or rights superior to, the Common Stock and except as otherwise provided by law and this Article IV, the holders of the Common Stock shall have and possess all powers and voting
and other rights pertaining to the stock of the Corporation. 
 (i) Voting. Each holder of Common Stock, as such,
shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote; provided, that, except as otherwise required by law, holders of Common Stock, as
such, shall not be entitled to vote on any amendment to this Second Restated Certificate of Incorporation (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of
one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second Restated Certificate of
Incorporation (including, but not limited to, any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL. There shall be no cumulative voting. 

(ii) Dividends. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor as and
when determined by the Board of Directors and subject to any preferential dividend rights of any then outstanding Preferred Stock. Except as otherwise provided by the DGCL or this Second Restated Certificate of Incorporation, the holders of record
of Common Stock shall share ratably in all dividends payable in cash, stock or otherwise and other distributions, whether in respect of liquidation or dissolution (voluntary or involuntary) or otherwise. 

(iii) No Preemptive Rights. The holders of the Common Stock shall have no preemptive rights to subscribe for any shares
of any class of stock of the Corporation whether now or hereafter authorized. 
 (iv) No Conversion Rights. The Common
Stock shall not be convertible into, or exchangeable for, shares of any other class or classes or of any other series of the same class of the Corporation’s capital stock. 

(v) Liquidation Rights. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary,
holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders, subject to any preferential rights of any then outstanding Preferred Stock. A merger or consolidation of the
Corporation with or into any other corporation or other entity or a sale or conveyance of all or any part of the assets of the Corporation, in any such case which shall not in fact result in the liquidation of the Corporation and the distribution of
assets to its stockholders, shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Article IV(b)(v). 

 (c) Preferred Stock. Shares of Preferred Stock may be issued in one or more series, from
time to time, with each such series to consist of such number of shares and to have such voting powers relative to other classes or series of Preferred Stock, if any, or Common Stock, full or limited or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, as shall be stated in the resolution or resolutions providing for the issuance of such series adopted by the
Board of Directors, and the Board of Directors is hereby expressly vested with the authority, to the full extent now or hereafter provided by applicable law, to adopt any such resolution or resolutions. Except as otherwise provided in this Second
Restated Certificate of Incorporation, no vote of the holders of the Preferred Stock or Common Stock shall be a prerequisite to the designation or issuance of any shares of any series of the Preferred Stock authorized by and complying with the
conditions of this Second Restated Certificate of Incorporation, the right to have such vote being expressly waived by all present and future holders of the capital stock of the Corporation. Any shares of Preferred Stock that are redeemed, purchased
or acquired by the Corporation may be reissued except as otherwise provided by law or this Second Restated Certificate of Incorporation. Different series of Preferred Stock shall not be construed to constitute different classes of shares for the
purposes of voting by classes unless expressly provided in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors. 

(d) No Class Vote On Changes In Authorized Number of Shares Of Preferred Stock. Subject to the special rights of the
holders of any series of Preferred Stock pursuant to the terms of this Second Restated Certificate of Incorporation, any certificate of designations or any resolution or resolutions providing for the issuance of such series of stock adopted by the
Board of Directors, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of the
outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, irrespective of the provisions of Section 242(b)(2) of the DGCL. 

ARTICLE V — BOARD OF DIRECTORS 

(a) Number of Directors; Vacancies and Newly Created Directorships. The number of directors constituting the Board of Directors shall be
not fewer than three (3) and not more than fifteen (15), each of whom shall be a natural person. All elections of directors shall be determined by a plurality of the votes cast. Subject to the special rights of the holders of any series of
Preferred Stock to elect directors, the precise number of directors shall be fixed exclusively pursuant to a resolution adopted by the Board of Directors. Vacancies and newly-created directorships shall be filled exclusively by vote of a majority of
the directors then in office, even if less than a quorum, or by a sole remaining director, except that any vacancy created by the removal of a director by the stockholders for cause shall only be filled, in addition to any other vote otherwise
required by law, by vote of a majority of the outstanding shares of Common Stock. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director. A director elected to fill a vacancy shall
be elected for the unexpired term of his or her predecessor in office, and a director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next election of the class for which such director
shall have been chosen, subject to the election and qualification of his or her successor and to his or her earlier death, resignation or removal. 

 (b) Classified Board of Directors. Subject to the special rights of the holders of any
series of Preferred Stock to elect directors, the Board of Directors (other than those directors elected by the holders of any series of Preferred Stock) shall be classified into three classes: Class I; Class II; and Class III. Each
class shall consist, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors and the allocation of directors among the three classes shall be determined
by the Board of Directors. The initial Class I Directors shall serve for a term expiring at the first annual meeting of stockholders of the Corporation following the filing of this Second Restated Certificate of Incorporation; the initial
Class II Directors shall serve for a term expiring at the second annual meeting of stockholders following the filing of this Second Restated Certificate of Incorporation; and the initial Class III Directors shall serve for a term expiring
at the third annual meeting of stockholders following the filing of this Second Restated Certificate of Incorporation. Each director in each class shall hold office until his or her successor is duly elected and qualified or until his or her earlier
death, resignation or removal. At each annual meeting of stockholders beginning with the first annual meeting of stockholders following the filing of this Second Restated Certificate of Incorporation, the successors of the class of directors whose
term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders to be held in the third year following the year of their election, with each director in each such class to hold office until his
or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of
directors in each class as nearly equal as possible and such apportionment shall be determined by the Board of Directors. 
 (c)
Removal. Subject to the special rights of the holders of any series of Preferred Stock to elect directors, the directors of the Corporation may be removed only for cause by the affirmative vote of the holders of at least a majority of the
voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, at a meeting of the stockholders called for that purpose. 

ARTICLE VI — LIMITATION OF DIRECTOR LIABILITY 

To the fullest extent that the DGCL or any other law of the State of Delaware (as they exist on the date hereof or as they may hereafter be
amended) permits the limitation or elimination of the liability of directors, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. No amendment to, or
modification or repeal of, this Article VI shall adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any state of facts existing or act or omission occurring, or any cause of action, suit or
claim that, but for this Article VI, would accrue or arise, prior to such amendment, modification or repeal. If the DGCL is amended after the Effective Time to authorize corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. 

 ARTICLE VII — MEETINGS OF STOCKHOLDERS 

(a) Special Meetings of Stockholders. Subject to any special rights of the holders of any series of Preferred Stock, and to the
requirements of applicable law, special meetings of stockholders of the Corporation may be called only (i) by or at the direction of the chairman of the Board of Directors or (ii) by the Board of Directors pursuant to a written resolution
adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated
in the notice of meeting. 
 (b) Election of Directors by Written Ballot. Election of directors need not be by written ballot. 

ARTICLE VIII — AMENDMENTS TO THE BYLAWS AND CERTIFICATE OF INCORPORATION 

(a) Bylaws. In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to make,
alter, amend or repeal the bylaws of the Corporation subject to the power of the stockholders of the Corporation entitled to vote with respect thereto to make, alter, amend or repeal the bylaws. 

(b) Amendments to the Certificate of Incorporation. The Corporation reserves the right to amend, alter, change or repeal any provision
contained in this Second Restated Certificate of Incorporation in the manner now or hereafter prescribed by the DGCL, and all rights conferred upon stockholders herein are granted subject to this reservation. 

ARTICLE IX — RENOUNCEMENT OF CORPORATE OPPORTUNITY 

(a) Scope. The provisions of this Article IX are set forth to define, to the extent permitted by applicable law, the duties of Exempted
Persons (as defined below) to the Corporation with respect to certain classes or categories of business opportunities. “Exempted Persons” means investment funds affiliated with CCMP Capital Advisors, LP and their respective
successors, Transferees and Affiliates (other than the Corporation and its subsidiaries) (collectively, the “CCMP Entities”) and INEOS Investments Partnership and its respective successors, Transferees and Affiliates (other than the
Corporation and its subsidiaries) (collectively, the “INEOS Entities”), and all of their respective partners, principals, directors, officers, members, managers and/or employees, including any of the foregoing who serves as officer
or director of the Corporation. “Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such
Person; the term “control,” as used in this definition, means 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, by contract or otherwise, and “controlled,” “controlling” and “under common control” have meanings correlative to the foregoing. “Person” means an individual, any
general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever
nature, and shall include any successor (by merger or 

 
otherwise) of such entity. “Transferee” means any Person who (i) becomes a beneficial owner of Common Stock upon having acquired such shares of Common Stock, solely with
respect to a Transferee of a CCMP Entity, from an investment fund affiliated with CCMP Capital Advisors, LP or, solely with respect to a Transferee of INEOS Investments Partnership, from INEOS Investments Partnership and (ii) is designated in
writing by the transferor as a “Transferee” and a copy of such writing is provided to the Corporation at or prior to the time of such transfer; provided, however, that a purchaser of Common Stock in a registered offering or
in a transaction effected pursuant to Rule 144 under the Securities Act of 1933, as amended (or any similar or successor provision thereto), shall not be a “Transferee.” 

(b) Competition and Allocation of Corporate Opportunities. The Exempted Persons shall not have any fiduciary duty to refrain from
engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation or any of its subsidiaries. To the fullest extent permitted by applicable law, the Corporation, on behalf of itself and its
subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities that are from time to time available to the Exempted Persons, even if the
opportunity is one that the Corporation or its subsidiaries might reasonably have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each such Exempted Person shall have no duty to communicate or offer such
business opportunity to the Corporation (and there shall be no restriction on the Exempted Persons using the general knowledge and understanding of the Corporation and the industry in which it operates which it has gained as an Exempted Person in
considering and pursuing such opportunities or in making investment, voting, monitoring, governance or other decisions relating to other entities or securities) and, to the fullest extent permitted by applicable law, shall not be liable to the
Corporation or any of its subsidiaries or stockholders for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such Exempted Person pursues or acquires such business opportunity, directs such
business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries, or uses such knowledge and understanding in the manner described
herein. 
 (c) Certain Matters Deemed Not Corporate Opportunities. In addition to and notwithstanding the foregoing provisions of this
Article IX, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not financially able or contractually permitted or legally able to undertake, or that is, from its nature,
not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy. 

(d) Amendment of this Article. No amendment or repeal of this Article IX in accordance with the provisions of paragraph (b) of
Article VIII shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any activities or opportunities of which such Exempted Person becomes aware prior to such amendment or repeal. This
Article IX shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Second Restated Certificate of Incorporation, the Corporation’s bylaws or
applicable law. 

 ARTICLE X — BUSINESS COMBINATIONS 

(a) Opt Out of DGCL 203. The Corporation shall not be governed by Section 203 of the DGCL. 

(b) Limitations on Business Combinations. Notwithstanding the foregoing, the Corporation shall not engage in any business combination
(as defined below), at any point in time at which the Corporation’s Common Stock is registered under Section 12(b) or Section 12(g) of the Exchange Act, with any interested stockholder (as defined below) for a period of three
(3) years following the time that such stockholder became an interested stockholder, unless: 
 (i) prior to such time,
the Board of Directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder, 

(ii) upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least eighty-five percent (85%) of the voting stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the
outstanding voting stock owned by the interested stockholder) those shares owned by (i) persons who are directors and also officers or (ii) employee stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or 
 (iii) at or
subsequent to such time, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two thirds of the outstanding
voting stock of the Corporation which is not owned by the interested stockholder. 
 (c) Definitions. For purposes of this Article X,
references to: 
 (i) “affiliate” means, with respect to any person, any other person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such person. 

(ii) “associate,” when used to indicate a relationship with any person, means: (i) any corporation,
partnership, unincorporated association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of twenty percent (20%) or more of any class of voting stock; (ii) any trust or other estate
in which such person has at least a twenty percent (20%) beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative of such spouse, who
has the same residence as such person. 

 (iii) “business combination,” when used in reference to the
Corporation and any interested stockholder of the Corporation, means: 
 (1) any merger or consolidation of the Corporation
or any direct or indirect majority-owned subsidiary of the Corporation (a) with the interested stockholder, or (b) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused
by the interested stockholder and as a result of such merger or consolidation paragraph (b) of this Article X is not applicable to the surviving entity; 

(2) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of
transactions), except proportionately as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary of
the Corporation which assets have an aggregate market value equal to ten percent (10%) or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or the aggregate market value of all the
outstanding stock of the Corporation; 
 (3) any transaction which results in the issuance or transfer by the Corporation or
by any direct or indirect majority-owned subsidiary of the Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (a) pursuant to the exercise, exchange or conversion of securities exercisable
for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which securities were outstanding prior to the time that the interested stockholder became such; (b) pursuant to a merger under Section 251(g) of the
DGCL; (c) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is
distributed, pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such; (d) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms
to all holders of said stock; or (e) any issuance or transfer of stock by the Corporation; provided, however, that in no case under items (c)-(e) of this subsection (3) shall there be an increase in the interested
stockholder’s proportionate share of the stock of any class or series of the Corporation or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments); 

(4) any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has
the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the Corporation or of any such subsidiary which is owned by the
interested stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or 

 (5) any receipt by the interested stockholder of the benefit, directly or
indirectly (except proportionately as a stockholder of the Corporation), of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (1)-(4) above) provided by or through the
Corporation or any direct or indirect majority-owned subsidiary. 
 (iv) “control,” including the terms
“controlled,” “controlling” and “under common control with”, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting stock, by contract or otherwise. A person who is the record or beneficial owner of twenty percent (20%) or more of the outstanding voting stock of a person shall be presumed to have control of such person, in
the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this
Article X, as an agent, bank, broker, nominee, custodian or trustee for one or more record or beneficial owners who do not individually or as a group have control of such person. 

(v) “interested stockholder” means any person (other than the Corporation or any direct or indirect
majority-owned subsidiary of the Corporation) that (i) is the owner of fifteen percent (15%) or more of the outstanding voting stock of the Corporation, or (ii) is an affiliate or associate of the Corporation and was the owner of fifteen
percent (15%) or more of the outstanding voting stock of the Corporation at any time within the three (3) year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the
affiliates and associates of such person; provided, however, that the term “interested stockholder” shall not include (a) the CCMP Entities, (b) the INEOS Entities, or (c) any person whose ownership of shares
in excess of the fifteen percent (15%) limitation set forth herein is the result of any action taken solely by the Corporation; provided that such person specified in this clause (c) shall be an interested stockholder if thereafter such
person acquires additional shares of voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder,
the voting stock of the Corporation deemed to be outstanding shall include stock deemed to be owned by the person through application of the definition of “owner” below but shall not include any other unissued stock of the Corporation
which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise. 

(vi) “owner,” including the terms “own” and “owned,” when used with respect
to any stock, means a person that individually or with or through any of its affiliates or associates: 
 (1) beneficially
owns such stock, directly or indirectly; or 

 (2) has (a) the right to acquire such stock (whether such right is
exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided,
however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person’s affiliates or associates until such tendered stock is accepted for purchase or
exchange; or (b) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any stock because of such person’s right to vote
such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to ten (10) or more persons; or 

(3) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a
revocable proxy or consent as described in item (b) of subsection (2) above), or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.

 (vii) “person” means any individual, general partnership, limited partnership, limited liability company,
corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of
such entity. 
 (viii) “stock” means, with respect to any corporation, capital stock and, with respect to
any other entity, any equity interest. 
 (ix) “voting stock” means stock of any class or series entitled to
vote generally in the election of directors. 
 ARTICLE XI — EXCLUSIVE JURISDICTION FOR CERTAIN ACTIONS 

(a) Exclusive Forum. Unless the Board of Directors or one of its committees otherwise approves, in accordance with Section 141 of
the DGCL, this Second Restated Certificate of Incorporation and the bylaws of the Corporation, the selection of an alternate forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have
jurisdiction, the Superior Court of the State of Delaware, or, if the Superior Court of the State of Delaware also does not have jurisdiction, the United States District Court for the District of Delaware) shall, to the fullest extent permitted by
applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee
or security holder of the Corporation to the Corporation or some or all of the Corporation’s stockholders, or a claim for aiding and abetting any such breach, (iii) any action asserting a claim against the Corporation arising pursuant to
any provision of the DGCL, this Second Restated Certificate of Incorporation or the bylaws of the Corporation, (iv) any action to interpret, apply, enforce or determine the validity of this Second Restated Certificate of Incorporation or the
bylaws of the Corporation or (v) any action asserting a claim governed by the internal affairs doctrine (each, a “Covered Proceeding”). 

 (b) Personal Jurisdiction. If any action the subject matter of which is a Covered
Proceeding is filed in a court other than the Court of Chancery of the State of Delaware, or, where permitted in accordance with paragraph (a) above, the Superior Court of the State of Delaware or the United States District Court for the
District of Delaware (each, a “Foreign Action”) in the name of any person or entity (a “Claiming Party”) without the prior approval of the Board of Directors or one of its committees in the manner described in
paragraph (a) above, such Claiming Party shall be deemed to have consented to (i) the personal jurisdiction of the Court of Chancery of the State of Delaware, or, where applicable, the Superior Court of the State of Delaware and the United
States District Court for the District of Delaware, in connection with any action brought in any such courts to enforce paragraph (a) above (an “Enforcement Action”) and (ii) having service of process made upon such
Claiming Party in any such Enforcement Action by service upon such Claiming Party’s counsel in the Foreign Action as agent for such Claiming Party. 

(c) Notice and Consent. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the
Corporation shall be deemed to have notice of and consented to the provisions of this Article XI and waived any argument relating to the inconvenience of the forums referenced above in connection with any Covered Proceeding. 

ARTICLE XII — SEVERABILITY 

If any provision or provisions of this Second Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as
applied to any circumstance for any reason whatsoever: (i) the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Second Restated Certificate of Incorporation (including,
without limitation, each portion of any paragraph of this Second Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Second Restated Certificate of Incorporation (including, without limitation, each such portion of any paragraph of this Second
Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect its directors, officers, employees and agents from personal liability in
respect of their good faith service to or for the benefit of the Corporation to the fullest extent permitted by law. 
 * * * 

 IN WITNESS WHEREOF, the undersigned has caused this Second Restated Certificate of Incorporation
to be executed by the officer below this 28th day of September, 2017. 
  

			
	PQ GROUP HOLDINGS INC.
		
	By:	 	 /s/ Joseph S. Koscinski

	Name:	 	Joseph S. Koscinski
	Title:	 	Vice President and Secretary

 Signature Page to Second Restated Certificate of IncorporationEx 10-1

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (as amended, restated, supplemented
or otherwise modified from time to time, this
“Agreement”) is dated as of September 25, 2017, between
Medite Cancer Diagnostics, Inc., a Delaware corporation (the
“Company”), and the purchaser identified on the
signature pages hereto (including its successors and permitted
assigns, the “Purchaser”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an exemption from the registration requirements of Section 5 of
the Securities Act contained in Section 4(a)(2) thereof and/or Rule
506(b) thereunder, the Company desires to issue and sell to
Purchaser, and Purchaser desires to purchase from the Company,
securities of the Company as more fully described in this
Agreement.

 

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

 

ARTICLE I.

 

DEFINITIONS

 

1.1         Definitions.
In addition to the words and terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms
have the meanings set forth in this Section
1.1:

 

“Action”
shall have the meaning ascribed to such term in Section
3.1(j).

 

“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under
Rule 405 under the Securities Act.

 

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

 

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

 

“Closing”
means the closing of the purchase and sale of the Securities
pursuant to Section 2.1.

 

“Closing
Date” means the Business Day on which all of the Transaction
Documents have been executed and delivered by the applicable
parties thereto pursuant to Section 2.2(a) and Section 2.2(b), and
all conditions precedent to (i) Purchaser’s obligations to
pay the Subscription Amount as to the and (ii) the Company’s
obligations to deliver the Securities have been satisfied or
waived.

 

“Collateral
Agent” shall have the meaning ascribed in the Security
Agreement.

 

“Common
Stock” means the common stock of the Company, par value
$0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.

 

“Common Stock
Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at
any time Common Stock, including, without limitation, any debt,
preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or
otherwise entitles the holder thereof to receive, Common
Stock.

 

“Company
Counsel” means Taft Stettinius & Hollister
LLP.

 

“Conversion
Price” shall have the meaning set forth in the
Note.

 

“Deposit
Account Control Agreement” means an agreement in writing, in
form and substance satisfactory to the Purchaser and the Company,
by and among Purchaser, the Company and any bank at which any
deposit account of the Company is at any time maintained which
provides that, upon and during the continuation of an Event of
Default (as defined in the Note), such bank will comply with
instructions originated by the Purchaser directing disposition of
the funds in the deposit account without further consent by Company
and such other terms and conditions as the Purchaser may
require.

 

“Developer”
shall have the meaning ascribed to such term in Section
3.1(o)(v).

 

“Disqualification
Event” shall have the meaning ascribed to such term in
Section 3.1(z).

 

“Environmental
Laws” shall have the meaning ascribed to such term in Section
3.1(l).

 

 

 

-1-

 

 

 

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

 

“Exempt
Issuance” means the issuance of: (a) securities to employees,
officers or directors of, or consultants to, the Company, pursuant
to any stock or option plan duly adopted for such purpose and
approved by a majority of the non-employee members of the Board of
Directors or a majority of the members of a committee of
non-employee directors established for such purpose for services
rendered to the Company, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder, (c)
securities issued pursuant to any purchase money equipment loan or
capital leasing arrangement, real property leasing arrangement or
debt financing from a commercial bank or similar financial
institution, (d) securities in full or partial consideration in
connection with a bona fide strategic merger, acquisition,
consolidation or purchase of all or substantially all of the
securities or assets of a corporation or other entity approved by a
majority of the non-employee members of the Board of Directors, so
long as such issuance is not for the primary purpose of raising
capital by the Company, and (e) securities upon a stock split,
stock dividend or subdivision of the Common Stock.

 

“Funding Conditions” means the receipt
by the Company of gross proceeds which, in the aggregate, (i) equal
or exceed $400,000 from the
Company’s private placement offering of debt securities that
will close simultaneously with this offering, be subordinate to the
Note and be upon terms acceptable to Purchaser and (ii) $375,000
its private placement offering of equity securities (the
“Private Placement”) in which it is offering to sell up
to $4,250,000 shares of its common stock at a per share price of
$0.50 pursuant to the terms of the Securities Purchase Agreement
filed as Exhibit 10.2 to the Company’s Annual Report on Form
10-K filed with the SEC on April 14, 2017, as amended by the First
Amendment to Amended and Restated Securities Purchase Agreement
filed as Exhibit 10.1 to the Company Quarterly Reports on Form 10-Q
filed with the SEC on May 15, 2017 and August 14,
2017.

 

“GAAP”
shall have the meaning ascribed to such term in Section
3.1(h).

 

“Guaranty
Agreements” means the Guaranty Agreements in the in the form
of Exhibit E
attached hereto.

 

“Hazardous
Materials” shall have the meaning ascribed to such term in
Section 3.1(l).

 

“Indebtedness”
means, with respect to any Person, without duplication,(i) all
indebtedness or liabilities for borrowed money or amounts owed in
excess of $10,000 (other than trade payables in the normal course
of business) (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not
the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business; and (z) the present value of any lease payments in excess
of $5,000 due under leases required to be capitalized in accordance
with GAAP..

 

“Independent
Third Party” means any Person who, immediately prior to the
contemplated transaction: (a) is not an officer or director of the
Company or an Affiliate of an officer or director of the Company,
(b) a Purchaser or an Affiliate of a Purchaser, (c) does not,
collectively with its Affiliates, own in excess of 10% of the
Common Stock on a fully-diluted basis (a “10% Owner”)
and is not an Affiliate of a 10% Owner, (d) is not the spouse or
descendent (by birth or adoption) of the Purchaser or 10% Owner or
a trust for the benefit of any 10% Owner (or their respective
spouses or descendants), and (e) is not a Person who through
contract or other arrangements (other than arrangements entered
into in connection with the contemplated transaction) would be an
Affiliate of any officer or director of the Company, the Purchaser,
any 10% Owner or the Company immediately after the contemplated
transaction.

 

“Intellectual
Property” means all of the following in any jurisdiction
throughout the world: (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all
improvements thereto, and all U.S. and foreign patents, patent
applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all trademarks, service
marks, brand names, certification marks, trade dress, logos, trade
names, domain names, assumed names and corporate names, together
with all colorable imitations thereof, and including all goodwill
associated therewith, and all applications, registrations, and
renewals in connection therewith, (c) all copyrights, and all
applications, registrations, and renewals in connection therewith,
(d) all trade secrets under applicable state Laws and the common
Law and know-how (including formulas, techniques, technical data,
designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and
proposals), (e) all computer software (including source code,
object code, diagrams, data and related documentation), and (f) all
copies and tangible embodiments of the foregoing (in whatever form
or medium).

 

 

 

-2-

 

 

 

“Intellectual
Property Agreement(s)” has the meaning set forth in Section
3.1(o)(iii) and in the form of Exhibit D attached
hereto.

 

“Irrevocable
Transfer Agent Instructions” has the meaning ascribed to such
term in Section 2.2(a)(xii).

 

“Issuer
Covered Person(s)” shall have the meaning ascribed to such
term in Section 3.1(z).

 

“Licensed
Intellectual Property Agreement” shall have the meaning
ascribed to such term in Section 3.1(o)(iv).

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right
of first refusal, preemptive right or other
restriction.

 

“Material
Adverse Effect” means: (a) a material adverse effect on the
legality, validity or enforceability of any Transaction Document,
(b) a material adverse effect on the results of operations, assets,
business, prospects or condition financial or otherwise of the
Company and the Subsidiaries, taken as a whole, in the long term or
(c) a material adverse effect on the Company’s ability to
perform in any material respect on a timely basis its obligations
under any Transaction Document; provided, however, that none of the
following shall be taken into account in determining whether there
has been, or could be, a Material Adverse Effect: (i) any adverse
change, event, development, or effect (whether short-term or
long-term) arising from or relating to (1) general business or
economic conditions, including such conditions related to the
business of the Company and its Subsidiaries, (2) any national or
international political or social conditions, (3) financial,
banking, or securities markets (including any disruption thereof
and any decline in the price of any security or any market index),
(4) changes in GAAP, (5) changes in laws, rules, regulations,
orders, or other binding directives issued by any governmental
entity, or (6) the taking of any action contemplated by any
Transaction Document, (ii) any failure to meet a forecast (whether
internal or published) of revenue, earnings, cash flow, or other
data for any period or any change in such a forecast, and (iii) any
existing event, occurrence, or circumstance with respect to which a
Purchaser has knowledge as of the date hereof.

 

“Material
Agreements” shall have the meaning ascribed to such term in
Section 3.1(aa).

 

“Material
Permits” shall have the meaning ascribed to such term in
Section 3.1(m).

 

“Maturity
Date” shall have the meaning ascribed to such term in the
Note.

 

“Note”
means the $5,356,400 face value original issue discount 13.25%
Senior Secured Convertible Note issued to the Purchaser, in the
form of Exhibit A
attached hereto, which shall be secured pursuant to a Security
Agreement and guaranteed pursuant to the Guaranty
Agreements.

 

“Permitted
Liens” shall have the meaning set forth in the
Note.

 

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

 

“Pre-Notice”
shall have the meaning ascribed to such term in Section
4.7(a).

 

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

 

“Purchaser
Party” shall have the meaning ascribed to such term in
Section 4.5.

 

“Registrable
Securities” shall have the meaning ascribed to such term in
the Registration Rights Agreement and means, collectively (i) the
Note Shares; (ii) the Warrant Shares; and (iii) any securities
issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the
foregoing; provided, that the holder of
such Registrable Securities has completed and delivered to the
Company a Selling Stockholder Questionnaire provided therein; and
provided,
further, that the
Note Shares and Warrant Shares shall cease to be Registrable
Securities upon the sale pursuant to a Registration Statement or
Rule 144 under the Securities Act (in which case, only such
security sold shall cease to be a Registrable
Security).

 

 

 

-3-

 

 

 

“Registration
Rights Agreement” means the Registration Rights Agreement in
the in the form of Exhibit
H attached hereto.

 

“Registration
Statement” shall have the meaning ascribed to such term in
the Registration Rights Agreement.

 

“Required
Approvals” shall have the meaning ascribed to such term in
Section 3.1(e).

 

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

 

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

 

“SEC
Documents” shall have the meaning ascribed to such term in
Section 3.1(h)

 

“Securities”
means the Note, the Shares, the Warrant and the Warrant
Shares.

 

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

 

“Security
Agreement” means the security agreement, in the form of
Exhibit C attached
hereto, providing the Purchaser with a first lien on all of the
assets of the Company other than as provided in this
Agreement.

 

“Shares”
means the Common Stock issuable upon conversion of the
Note.

 

“Subscription
Amount” means $4,875,000 payable in United States dollars and
in immediately available funds.

 

“Subsequent
Financing” shall have the meaning ascribed to such term in
Section 4.7(a).

 

“Subsequent
Financing Notice” shall have the meaning ascribed to such
term in Section 4.7(a).

 

“Subsidiary”
means with respect to any entity at
any date, any direct or indirect corporation, limited or general
partnership, limited liability company, trust, estate, association,
joint venture or other business entity of which (a) more than
50% of (i) the outstanding capital stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the
board of directors or other managing body of such entity, (ii) in
the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited
liability company or (iii) in the case of a trust, estate,
association, joint venture or other entity, the beneficial interest
in such trust, estate, association or other entity business is, at
the time of determination, owned or controlled directly or
indirectly through one or more intermediaries, by such entity, or
(b) is under the actual control of the Company.

 

“Transaction
Documents” means this Agreement, the Note, the Warrant, the
Security Agreement, the Intellectual Property Security Agreement,
the Guaranty Agreement, the Registration Rights Agreement and any
other documents or agreements executed in connection with the
transactions contemplated hereunder.

 

“Transfer
Agent” means Computershare, the current transfer agent of the
Company, with a mailing address of 33 N. LaSalle Street,
11th
Floor, Chicago, Illinois 60602 and any successor
transfer agent of the Company.

 

“Variable
Rate Transaction” shall have the meaning ascribed in Section
4.8(a).

 

“Warrant”
means the purchase warrant to initially purchase 4,120,308 shares
of Common Stock (a number of shares of Common Stock equal to 50% of
the Shares), subject to adjustment as described therein delivered
to the Purchaser in accordance with Section 2.2(a) hereof, in the
form of Exhibit B
attached hereto.

 

“Warrant
Exercise Price” shall equal the Conversion
Price.

 

“Warrant
Shares” means the shares of Common Stock issuable upon
exercise of the Warrant at the Warrant Exercise Price.

 

 

 

-4-

 

 

 

ARTICLE II.

 

PURCHASE AND SALE

 

2.1           Purchase
and Closing.
Closing.
On the Closing Date, upon the terms and subject to the conditions
set forth herein, the Company agrees to sell, and the Purchaser
agrees to purchase, the Note and the Warrant. Purchaser shall
deliver to the Company, via wire transfer immediately available
funds equal to the Subscription Amount, and the Company shall
deliver to the Purchaser the Note and Warrant on the Closing Date,
and the Company and the Purchaser shall deliver the other items set
forth in Section 2.2 deliverable at the Closing. Upon satisfaction
of the covenants and conditions set forth in Sections 2.2 and 2.3,
the Closing shall occur at the offices of Company Counsel or such
other location as the parties shall mutually
agree.

 

2.2         Deliveries.

 

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

 

(i)           this
Agreement duly executed by the Company;

 

(ii)           the
Guaranty Agreements duly executed by each of MEDITE Enterprise,
Inc., MEDITE GmbH, MEDITE GmbH, MEDITE Lab Solutions Inc., MEDITE
sp.zo.o, and CytoGlobe, GmbH;

 

(iii)           (A)
a Security Agreement providing the Purchaser with a first priority
lien on all of the assets of the Company and its Subsidiaries; (B)
a Deposit Account Control Agreement, duly executed by MEDITE GmbH
and CytoGlobe, GmbH within 15 days after the Closing; and (C) a
Deposit Account Control Agreement, duly executed by the Company
within 15 days after the Closing;

 

(iv)           
the Note registered in the name of the Purchaser;

 

(v)           
the Warrant, exercisable at the applicable Warrant Exercise Price,
registered in the name of the Purchaser to purchase up to a number
of shares of Common Stock equal to 50% of the Shares, subject to
adjustment as described therein;

 

(vi)           an
Affidavit of Confession of Judgment in the form of Exhibit F hereto with respect
to the Note, duly executed by the Company and each Subsidiary
notarized;

 

(vii)           Security
Purpose Agreement to Land Charge; immediately upon receipt of
payoff amount, Mortgage and Assignment of Mortgages from
Hannaversche Volksbank and Land Charge Assignment Agreement with
respect to all real property owned by the Company and its
Subsidiaries with proof of filing with
the appropriate governmental entity and such other documents
necessary and/or reasonably requested by the Purchaser to satisfy
itself it has a senior secured interest in and a perfected first
priority Lien on the real property securing all
Indebtedness;

 

(viii)           an
Intellectual Property Security Agreement providing the Purchaser
with a perfected first priority Lien on all of the intellectual
property of the Company;

 

(ix)           evidence
of achievement of the Funding Conditions;

 

(x)           in
accordance with the terms of the Transaction Documents, the Company
shall have delivered to the Collateral Agent (A) original
certificates (I) representing 100% of outstanding capital stock of
each Subsidiary to the extent such Subsidiary is a corporation or
otherwise has certificated equity and (II) representing all other
equity interests to be pledged thereunder, in each case,
accompanied by undated stock powers executed in blank and other
proper instruments of transfer and (B) appropriate financing
statements on Form UCC-1 and such other financing or similar
statement to be filed with the United States Patent and Trademark
Office and/or any other governmental body or agency to be duly
filed in such office or offices as may be necessary or, in the
opinion of the Collateral Agent, desirable to perfect the security
interests purported to be created by each Security
Document;

 

 

 

 

 

-5-

 

 

 

(xi)           within
two (2) Business Days prior to the Closing, the Company and each
Subsidiary shall have delivered or caused to be delivered to the
Purchaser and the Collateral Agent a perfection certificate, duly
completed and executed by the each, in form and substance
satisfactory to the Purchaser;

 

(xii)           five
executed copies of irrevocable instructions from the Company
to the Transfer Agent and any subsequent transfer agent in the form
satisfactory to the Purchaser (the “Irrevocable Transfer Agent
Instructions”) to issue certificates or credit shares
to the applicable balance accounts at The Depository Trust Company
registered in the name of the Purchaser or its respective
nominee(s), for the shares of Common Stock issuable upon conversion
of the Note and exercise of the Warrant;

 

(xiii)           a
legal opinion of U.S Company Counsel and German Company counsel, in
form and substance satisfactory to the Purchaser;

 

(xiv)           
an Officer’s Certificate of the Company and each Subsidiary
certifying as to the conditions set forth in Section
2.3(a);

 

(xv)           
a Secretary’s Certificate of the Company and each Subsidiary
in form and substance reasonably satisfactory to the
Purchaser;

 

(xvi)          
good standing certificates as of a recent date evidencing the good
standing of the Company and each Subsidiary in its jurisdiction of
organization, if applicable or such concept has
meaning;

 

(xvii)         
a Solvency Certificate in form and
substance satisfactory to the Purchaser;

 

(xviii)        
Payoff letter from Hannoversche
Volksbank;

 

(xix)          
the Registration Rights
Agreement;

 

(xx)           
German Share Pledge
Agreement;

 

(xxi)           German
Account Pledge Agreement;

 

(xxii)         
German Security Transfer
Agreement;

 

``           (xxiii)         
German Security Assignment
Agreement;

 

(xxiv)         
Registration Rights Agreement
in the form of Exhibit H hereto;

 

(xxv)          
Subordination and Intercreditor Agreement by and among Holder, the
Company and the subordinated lenders set forth on Schedule 1 hereto;

 

(xxvi)
amendment to Registration Rights Agreement entered into with
investors in the Private Placement; and

 

(xxvii)
Transfer Participation and Bond executed VR Equitypartner
GmbH.

 

(b)           On
or prior to each Closing, the Purchaser shall deliver or cause to
be delivered to the Company, the Subscription Amount subject to the
closing by wire transfer.

 

2.3         Closing
Conditions.

 

(a)           The
obligations of the Company hereunder in connection with the Closing
are subject to the following conditions being
met:

 

(i)           the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing of the representations and warranties of the
Purchaser contained herein (unless as of a specific date therein in
which case they shall be accurate as of such date);

 

(ii)           all
obligations, covenants and agreements of Purchaser required to be
performed at or prior to the date of the Closing shall have been
performed; and

 

 

 

-6-

 

 

 

(iii)           the
delivery by Purchaser of the items set forth in Section 2.2(b) of
this Agreement.

 

(b)           The
obligations of the Purchaser hereunder in connection with each
Closing are subject to the following conditions being
met:

 

(i)           the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing of the representations and warranties of the Company
contained herein (unless as of a specific date therein in which
case they shall be accurate as of such date);

 

(ii)           all
obligations, covenants and agreements of the Company required to be
performed at or prior to the Closing shall have been
performed;

 

(iii)           the
delivery by the Company of the items set forth in Section 2.2(a) of
this Agreement; and

 

(iv)           there
shall have been no Material Adverse Effect with respect to the
Company since the date hereof.

 

ARTICLE III.

 

REPRESENTATIONS
AND WARRANTIES

 

3.1         Representations
and Warranties of the Company. Except as set forth in
the Disclosure Schedules, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation or
otherwise made herein to the extent of the disclosure contained in
the corresponding section of the Disclosure Schedules, the Company
hereby makes the following representations and warranties to
Purchaser as of the date hereof:

 

(a)           Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set
forth in Schedule
3.1(a). The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all of the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities.

 

(b)           Organization
and Qualification. The Company and each of the Subsidiaries
is an entity duly incorporated or otherwise organized, validly
existing and in good standing, if applicable, under the laws of the
jurisdiction of its incorporation or organization, with the
requisite power and authority to own and use its properties and
assets and to carry on its business as currently conducted. Neither
the Company nor any Subsidiary is in violation nor default of any
of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing, if applicable, as a
foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes
such qualification necessary, except where the failure to be so
qualified or in good standing, as the case may be, could not have
or reasonably be expected to result in a Material Adverse Effect
and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

 

(c)           Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction
Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement and each
of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will
have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

 

 

-7-

 

 

 

(d)           No
Conflicts. The execution, delivery and performance by the
Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and
the consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any
Subsidiary (other than as provided in the Transaction Documents),
or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time
or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset
of the Company or a Subsidiary is bound or affected.

 

(e)           Filings,
Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.13 of this
Agreement, (ii) filings necessary to perfect the Liens in
favor of the Purchaser under the Security Agreement, and (iii) such
filings as are required to be made under applicable state
securities laws (collectively, the “Required
Approvals”).

 

(f)           Issuance
of the Securities. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid
and nonassessable, free and clear of all Liens imposed by the
Company. The Shares, when issued upon conversion of the Note, and
the Warrant Shares, when issued in accordance with the terms of the
Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has
reserved from its duly authorized capital stock a number of shares
of Common Stock issuable pursuant to the Note and the Warrant equal
to the amount set forth in Section 4.6.

 

(g)           Capitalization.
The capitalization of the Company as of June 30, 2017 is as set
forth in Schedule
3.1(g). No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents.
Except as a result of the purchase and sale of the Securities or as
set forth on Schedule
3.1(g), there are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common
Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to issue additional shares of
Common Stock or Common Stock Equivalents or capital stock of any
Subsidiary. The issuance and sale of the Securities will not
obligate the Company or any Subsidiary to issue shares of Common
Stock or other securities to any Person (other than the Purchaser)
and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under
any of such securities. There are no outstanding securities or
instruments of the Company or any Subsidiary that contain any
redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or
any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. Schedule 3.1(g) lists all stock
appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement and all securities
issued thereunder. All of the outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
state securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. No further approval or
authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. Except as
set forth on Schedule
3.1(g), there are no stockholders agreements, voting
agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or,
to the knowledge of the Company, between or among any of the
Company’s stockholders.

 

 

 

-8-

 

 

 

(h)           SEC
Documents; Financial Statements. During the two (2) years prior to the date hereof,
the Company has filed all reports, schedules, forms, proxy
statements, information statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements
of the Exchange Act, excluding due dates (all of the foregoing
filed prior to the date hereof including, without limitation,
Current Reports on Form 8-K by the Company with the SEC whether
required to be filed or not (but excluding Item 7.01 thereunder)
and all exhibits and appendices included therein other than
Exhibits 99.1 to Form 8-K) 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 the Purchaser or
their respective representatives true, correct and complete copies
of each of the SEC Documents not available on the EDGAR system (if
any). As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading. The financial statements of the Company provided
to the Purchaser have been prepared in accordance with United
States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present
in accordance with GAAP in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows
for the periods then ended, subject, in the case of unaudited
statements, to normal year-end audit adjustments and
footnotes. Schedule 3.1(h)
lists all material year-end
audit adjustments made to the financial statements of the Company
provided to the Purchaser.

 

(i)           Material
Changes; Undisclosed Events, Liabilities or Developments.
Since

 

June
30, 2017, (i) there has been no event, occurrence or development
that has had or that would reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to
be reflected in the Company’s financial statements pursuant
to Material Permit or disclosed in the financial statements, (iii)
the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of
cash or other property to its stockholders (other than as required
pursuant to the terms of any of its securities outstanding as of
the date hereof) or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) other
than as described on Schedule 3.1(i), the Company
has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing stock or option plans duly
adopted for such purpose or upon approval by a majority of the
non-employee members of the Board of Directors or a majority of the
members of a committee of non-employee directors established for
such purpose for services rendered to the Company.

 

(j)           Litigation.
There is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction
Documents or the issuance of the Securities or (ii) could, if
there were an unfavorable decision, have or reasonably be expected
to result in a Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof (in such capacity),
is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. Except as set forth on
Schedule 3(j),
there has not been, and to the knowledge of the Company, there is
not pending or contemplated, any investigation by the SEC or other
governmental or regulatory authority involving the Company or any
current or former director or officer of the Company.

 

 

 

-9-

 

 

 

(k)           Compliance.
Except as set forth on Schedule 3(k), neither the
Company nor any Subsidiary: (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by the
Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in
violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is in violation of any
statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state
and local laws relating to taxes, occupational health and safety,
product quality and safety and employment and labor matters, except
as could not have reasonably been expected to and does not result
in a Material Adverse Effect.

 

(l)           Environmental
Laws. The Company and its Subsidiaries (i) are in compliance
with all federal, state, local and 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, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or
regulations, issued, entered, promulgated or approved thereunder
(“Environmental Laws”); (ii) have received all permits
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and
(iii) are in compliance with all terms and conditions of any such
permit, license or approval.

 

(m)           Regulatory
Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary
to conduct their respective businesses, except where the failure to
possess such permits could not reasonably be expected to and does
not result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any Material Permit.

 

(n)           Title
to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by
them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for
Permitted Liens. Any real property and facilities held under lease
by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

 

(o)           Intellectual
Property.

 

(i)           The
Company and each Subsidiary owns or possesses or has the right to
use pursuant to a valid and enforceable written license,
sublicense, agreement, or permission all Intellectual Property
necessary for the operation of the business of the Company and each
Subsidiary as presently conducted. The Company and each Subsidiary
has made available to the Purchaser a true and complete copy of
each such written license, sublicense, agreement or
permission.

 

(ii)           To
the knowledge of the Company, the Intellectual Property does not
interfere with, infringe upon, misappropriate, or otherwise come
into conflict with, any Intellectual Property rights of third
parties, and the Company has no Knowledge that facts exist which
indicate a likelihood of the foregoing. Neither the Company nor any
Subsidiary has received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement,
misappropriation, or conflict (including any claim that the Company
must license or refrain from using any Intellectual Property rights
of any third party). To the Knowledge of the Company, no third
party has interfered with, infringed upon, misappropriated, or
otherwise come into conflict with, any Intellectual Property rights
of the Company or any Subsidiary.

 

 

 

-10-

 

 

 

(iii)           Neither
the Company nor any Subsidiary has any pending patent applications
or applications for registration that either entity has made with
respect to any Intellectual Property. Schedule
3.1(o) identifies each license,
sublicense, agreement, or other permission that the Company or a
Subsidiary has granted to any third party with respect to any of
such Intellectual Property (together with any exceptions). The
Company has made available to the Purchaser correct and complete
copies of all such licenses, sublicenses, agreements, and
permissions (as amended to date) (“Intellectual Property
Agreements”). Schedule 3.1(o)
also identifies each registered and
unregistered trademark, service mark, trade name, corporate name,
URLs or Internet domain name used by the Company and each
Subsidiary in connection with its business and which is not
licensed from a third party. With respect to each item of
Intellectual Property required to be identified in
Schedule
3.1(o):

 

(A) 

The
Company and each Subsidiary owns and possesses all right, title,
and interest in and to the item, free and clear of any Lien,
license, or other restriction or limitation regarding use or
disclosure;

 

(B) 

The
item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;

 

(C) 

No
Action, claim, or demand is pending or, to the knowledge of the
Company, is threatened that challenges the legality, validity,
enforceability, use, or ownership by the Company or any Subsidiary;
and

 

(D) 

Neither
the Company nor any Subsidiary has agreed to indemnify any Person
for or against any interference, infringement, misappropriation, or
other conflict with respect to the item.

 

(iv)           Schedule
3.1(o)(iv) identifies each item
of Intellectual Property that any third party owns and that the
Company or a Subsidiary uses pursuant to license, sublicense,
agreement, or permission, excluding off-the-shelf software
purchased or licensed by the Company or a Subsidiary. The Company
has made available to the Purchaser correct and complete copies of
all such licenses, sublicenses, agreements, and permissions (each
as amended to date) (each, a “Licensed Intellectual Property
Agreement”). With respect to each Licensed Intellectual
Property Agreement:

 

(A) 

The
Licensed Intellectual Property Agreement is legal, valid, binding,
enforceable, and in full force and effect;

 

(B) 

Neither
the Company nor any Subsidiary is in breach or default, and no
event has occurred that with notice or lapse of time would
constitute the Company’s or a Subsidiary’s breach or
default or permit the counterparty rights to termination,
modification, or acceleration thereunder, which as to any such
breach, default or event could have a Material Adverse Effect on
the Company or a Subsidiary;

 

(C) 

No
party to such Licensed Intellectual Property Agreement has
repudiated any provision thereof;

 

(D) 

Except
as set forth in such Licensed Intellectual Property Agreement,
neither the Company nor a Subsidiary has received written or verbal
notice or otherwise has Knowledge that the underlying item of
Intellectual Property is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge; and

 

(E) 

Except as set forth on Schedule
3.1(o)(iv), neither the Company
nor any Subsidiary has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or
permission.

 

(v)           Each
Person who participated in the creation, conception, invention or
development of the Intellectual Property currently used in the
business of the Company and each Subsidiary (each, a
“Developer”) which is not licensed from third parties
has executed one or more agreements containing industry standard
confidentiality, work for hire and assignment provisions, whereby
the Developer has assigned to the Company and each Subsidiary, as
applicable, all copyrights, patent rights, Intellectual Property
rights and other rights in the Intellectual Property, including all
rights in the Intellectual Property that existed prior to the
assignment of rights by such Person to the Company and the
applicable Subsidiary. The Company has made available to the
Purchaser copies of any such agreements and assignments from each
such Developer (collectively, the “Developer
Agreements”).

 

 

 

-11-

 

 

 

(vi)           Each
Developer has signed a non-disclosure agreement with the Company
and each Subsidiary. The Company has made available to the
Purchaser copies any such non-disclosure agreements from each such
Person, if any.

 

(p)           Insurance.
The Company and the Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary for entities with
financial positions similar to the Company in the businesses in
which the Company and the Subsidiaries are engaged. Neither the
Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business without a
significant increase in cost.

 

(q)           Transactions
With Affiliates and Employees. Except as set forth on
Schedule 3.1(q),
none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction
with the Company or any Subsidiary (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, providing for the borrowing of money from or
lending of money to or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the
Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner.

 

(r)           Certain
Fees. Except for compensation payable to TriPoint Global
Equities LLC, no brokerage or finder’s fees or commissions
are or will be payable by the Company or any Subsidiary to any
broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction
Documents.

 

(s)           Investment
Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not
be or be an Affiliate of, an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended.

 

(t)           Registration
Rights. No Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary other than pursuant
to the Registration Rights Agreement or pursuant to Schedule 3.1(t). The
Registration Rights Agreement referenced on Schedule 3.1(t) has been
amended to allow for the registration under the registration
statement referred to in such agreement of the shares of common
stock issuable upon conversion of the Note and exercisable upon
exercise of the Warrant and there is no prohibition to the
registration of any of the shares of common stock issuable upon
conversion of the Note and exercise of the Warrant in the same
registration statement as any other securities that the Company
registers on a registration statement.

 

(u)           Application
of Takeover Protections. The Company and the Board of
Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the
Company’s certificate of incorporation (or similar charter
documents) or the laws of its state of incorporation that is or
could become applicable to the Purchaser as a result of the
Purchaser and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of
the Securities and the Purchaser’s ownership of the
Securities.

 

(v)           Disclosure.
All of the disclosure furnished by or on behalf of the Company to
the Purchaser regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby,
including the schedules to this Agreement, is true and correct and
does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they were
made, not misleading. The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2 hereof.

 

 

 

-12-

 

 

 

(w)           No
Integrated Offering. 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 the Securities Act
that would require the registration of any such securities under
the Securities Act.

 

(x)           Solvency.
Based on the consolidated financial condition of the Company as of
each Closing, after giving effect to the receipt by the Company of
the proceeds from the sale of the Securities hereunder, (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. As of the date hereof, the Company has no
intention to file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within the
two years from the Closing Date. Schedule 3.1(x) set forth as of
the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments or guarantees. .

 

(y)           Tax
Status. The Company and its Subsidiaries each (i) has made
or filed all United States federal, state and local income and all
foreign income and franchise tax returns, reports and declarations
required by any jurisdiction to which it is subject including
filing extension periods, (ii) has paid all taxes and other
governmental assessments and charges that are material in amount,
shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision
reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or
declarations apply, except in each case those which are being
contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in
accordance with GAAP. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary
know of no basis for any such claim.

 

(z)           No
Disqualification Events. With respect to the Securities to
be offered and sold hereunder in reliance on Rule 506(b) under the
Securities Act, neither the Company nor, to the knowledge of the
Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of
20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, or 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 made available to the
Purchaser a copy of any disclosures provided
thereunder.

 

(aa)
Material
Agreements. The agreements set forth on Schedule 3.1(aa) (the
“Material Agreements”) are valid, binding and
enforceable in accordance with their terms against the Company, and
are in full force and effect, except as the enforcement thereof may
be limited by bankruptcy laws, other similar laws affecting
creditors’ rights and general principles of equity affecting
the availability of specific performance and other equitable
remedies. Except as set forth on Schedule 3.1(aa), neither the
Company nor any other party thereto is in material default
thereunder, nor has there occurred any event that with notice or
lapse of time, or both, would constitute a material default by the
Company or any other party thereunder. Accurate and complete copies
of each written Material Agreement have been delivered or otherwise
made available to the Purchaser. Except as set forth on
Schedule 3.1(aa),
as of the date of this Agreement, the Company nor any of its
Affiliates has received any notification that any party to a
Material Agreement intends to terminate such Material
Agreement.

 

 

 

-13-

 

 

 

(bb)
Customers and
Suppliers. Neither the Company nor any Subsidiary has
received any written or oral notice, and neither the Company nor
any Subsidiary knows or has any reason to believe, that any
customer of its with annual gross sales of in excess of $100,000 or
supplier or products to the Company or a Subsidiary in excess of
$100,000 (i) has ceased, or in the reasonably foreseeable future
may cease, to use the services of the Company or a Subsidiary, (ii)
has substantially reduced, or in the reasonably foreseeable future
may substantially reduce, the use of the services of the Company or
a Subsidiary or (iii) has terminated or materially altered, or in
the reasonably foreseeable future would reasonably be expected to
terminate or materially alter its business relations with the
Company or a Subsidiary.

 

3.2         Representations
and Warranties of the Purchaser. Each Purchaser, for itself and for no other
Purchaser, hereby represents and warrants as of the date hereof and
as of each Closing to the Company as follows (unless as of a
specific date therein):

 

(a)           Organization;
Authority. Such Purchaser is
either an individual or an entity duly incorporated or formed,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation with full right,
corporate, partnership, limited liability company or similar power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of
this Agreement and performance by the Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all
necessary corporate, partnership, limited liability company or
similar action, as applicable, on the part of the Purchaser. Each
Transaction Document to which it is a party has been duly executed
by the Purchaser, and when delivered by the Purchaser in accordance
with the terms hereof, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

(b)           Understandings
or Arrangements. Such Purchaser
is acquiring the Securities as principal for its own account and
has no direct or indirect arrangement or understandings with any
other Persons to distribute or regarding the distribution of such
Securities (this representation and warranty not limiting the
Purchaser’s right to sell the Securities in compliance with
applicable federal and state securities laws). Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its
business. Such Purchaser understands that the Securities are
“restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and
is acquiring such Securities as principal for its own account and
not with a view to or for distributing or reselling such Securities
or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of
distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other Persons to
distribute or regarding the distribution of such Securities in
violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting the
Purchaser’s right to sell such Securities in compliance with
applicable federal and state securities laws).

 

(c)           Purchaser
Status. At the time the
Purchaser was offered the Securities, it was, and as of the date
hereof it is, an “accredited investor” within the
meaning of Rule 501 under the Securities Act.

 

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

 

 

 

-14-

 

 

 

(e)           Access
to Information. Such Purchaser
acknowledges that (i) it has had the opportunity to review the
Transaction Documents (including all exhibits and schedules
thereto), (ii) the opportunity to ask such questions as it has
deemed necessary of, and to receive answers from, representatives
of the Company concerning the terms and conditions of the offering
of the Securities and the merits and risks of investing in the
Securities; (iii) access to information about the Company and its
financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its
investment; and (iv) the opportunity to obtain such additional
information that the Company possesses or can acquire without
unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Such
Purchaser acknowledges and agrees that neither the Company nor
anyone else has provided the Purchaser with any information or
advice with respect to the Securities nor is such information or
advice necessary or desired.

 

(f)           Confidentiality.
Other than to other Persons party to this Agreement or to the
Purchaser’s representatives, including, without limitation,
its officers, directors, partners, legal and other advisors,
employees, agents and Affiliates, the Purchaser has maintained the
confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this
transaction).

 

(g)           Legends.
The Purchaser understands that the Securities and any securities
issued in respect of or exchange for the Securities, may be notated
with one or all of the following legends:

 

(i)

[THESE
SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THESE SHARES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 

[NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 

[NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.]

 

 

 

-15-

 

 

 

(ii) Any
legend set forth in, or required by, the other Transaction
Documents.

 

(iii) Any
legend required by the securities laws of any state to the extent
such laws are applicable to the Securities represented by the
certificate, instrument, or book entry so legended.

 

ARTICLE IV.

 

OTHER AGREEMENTS OF THE PARTIES

 

4.1           Information
Rights. So long as the Note
remains outstanding and until such time as the Purchaser no longer
is the beneficial owner of at least ten percent (10%) of the
outstanding Common Stock, on a fully diluted basis, the Company
shall provide the Purchaser with (i) monthly financial reports
including A/R and A/P statements within 30 days of each month end,
with such reports to also include comparisons of budgeted to actual
operations (ii) quarterly financial reports within 30 days of each
quarter end, with such reports to include comparisons of budgeted
to actual operations, (iii) yearly financial reports within 60 days
of each year end, with such reports to include comparisons of
budgeted to actual operations and (iv) audited financials within
120 days of each year end. Upon the request of the Purchaser, the
Company shall share with the Purchaser status updates on
manufacturing and capex, shipment of
products, sales pipeline, board decisions and relevant regulatory
and licensing developments. The Company shall use best efforts to
provide accurate quarterly and yearly reports, subject to
adjustments recommended by the Company’s
auditors.

 

4.2                   Publicity.
The Company and the Purchaser shall consult with each other in
issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor the Purchaser
shall issue any such press release nor otherwise make any such
public statement without the prior consent of the Company, with
respect to any press release of the Purchaser, or without the prior
consent of the Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or
delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party
with prior notice of such public statement or
communication.

 

4.3                   Shareholder
Rights Plan. No claim will be
made or enforced by the Company or, with the consent of the
Company, any other Person, that the Purchaser is an
“Acquiring Person” under any control share acquisition,
business combination, poison pill (including any distribution under
a rights agreement) or similar anti-takeover plan or arrangement in
effect or hereafter adopted by the Company, or that the Purchaser
could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the
Company and the Purchaser.

 

4.4                   Use
of Proceeds.
Schedule
4.4 sets forth a detailed list
of the use of proceeds, which shall include, among other things,
the purchase of the bearer bond held by VR Equitypartner GmbH and
the payment in full of all amounts owed by the Company to
Hannoversche Volksbank. It is anticipated that a portion of the
proceeds of the Note will be not be paid to the Company but will
instead be paid by the Purchaser directly to VR Equitypartner GmbH
to acquire the bearer bond held by VR Equitypartner GmbH.
Immediately after acquisition of the bearer bond, the Purchaser
shall assign the bearer bond to the Company. The Company shall use
the net proceeds from the sale of the Securities hereunder for
working capital and capital expenditures related to sales and
marketing and application expansion and shall not use such
proceeds: (a) for the satisfaction of any portion of the
Company’s Indebtedness (other than as set forth on
Schedule
4.4 hereto, the payment of
trade payables in the ordinary course of the Company’s
business and prior practices and other than ordinary course payments of
principal and interest on the Company’s outstanding secured
promissory notes), or (b) for separation payments other than an
aggregate of $150,929.72 in connection with a termination or
separation of from the Company of Michaela Ott and Michael Ott. The
only Indebtedness of the Company outstanding after the Closing
shall be Permitted Indebtedness.

 

 

 

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4.5                   Indemnification
of Purchaser. Subject to the
provisions of this Section 4.5, the Company will indemnify and hold
the Purchaser and its directors, officers, shareholders, members,
partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each
Person who controls the Purchaser (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or
employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling Persons (each, a
“Purchaser Party”) harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as
a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or in the other Transaction Documents,
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is
based upon a breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party that constitutes fraud, gross negligence,
willful misconduct or malfeasance) or (c) any untrue or alleged
untrue statement of a material fact contained in any registration
statement, any prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any prospectus or
supplement thereto, in light of the circumstances under which they
were made) not misleading. If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense
and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for
the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party
under any Transaction Document (x) for any settlement by a
Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or
(y) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or
in the other Transaction
Documents; or (z) to the extent
caused solely by a Purchaser Party’s gross negligence or
willful misconduct. The indemnification required by this Section
4.5 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are
received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.

 

4.6                   Reservation
of Common Stock. As of the date
hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights,
shares of Common Stock, subject to adjustment for stock splits and
dividends, combinations and similar events, equal to the amounts
required by the Transaction Documents. The Company shall not enter
into any agreement or file any amendment to its Certificate of
Incorporation (including the filing of a Certificate of
Designation) which conflicts with this Section 4.6 while the Note
and Warrant remain outstanding. On or prior to the date that is six
months from the Closing, the Company shall amend its Certificate of
Incorporation to increase its authorized number of shares of Common
Stock to the amounts required by the Transaction Documents but no
less than a minimum of 100,000,000 shares.

 

 

 

-17-

 

 

 

4.7                              Participation
in Future Financing.

 

(a)           Until
the 36 month anniversary of the Closing, upon any issuance by the
Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents for cash consideration, Indebtedness or a combination
of units hereof (a “Subsequent Financing”), such
Purchaser shall have the right to participate in the Subsequent
Financing on the same terms, conditions and price provided for in
the Subsequent Financing. At least 7 Business Days prior to the
closing of the Subsequent Financing, the Company shall deliver to
such Purchaser a written notice of its intention to effect a
Subsequent Financing (“Pre-Notice”), which Pre-Notice
shall ask such Purchaser if it wants to review the details of such
financing (such additional notice, a “Subsequent Financing
Notice”). Upon the request of such Purchaser, and only upon a
request by such Purchaser, for a Subsequent Financing Notice, the
Company shall promptly, but no later than 1 Business Day after such
request, deliver a Subsequent Financing Notice to such Purchaser.
The Subsequent Financing Notice shall describe in reasonable detail
the proposed terms of such Subsequent Financing, the amount of
proceeds intended to be raised thereunder and (subject to any
confidentiality obligations) the Person or Persons through or with
whom such Subsequent Financing is proposed to be effected and shall
include a term sheet or similar document relating thereto as an
attachment.

 

(b)           Any
Purchaser desiring to participate in such Subsequent Financing must
provide written notice to the Company by not later than 5:30 p.m.
(New York City time) on the 10th Business Day after it received the
Pre-Notice that such Purchaser is willing to participate in the
Subsequent Financing, the amount of such Purchaser’s
participation, and representing and warranting that such Purchaser
has such funds ready, willing, and available for investment on the
terms set forth in the Subsequent Financing Notice. If the Company
receives no such notice from a Purchaser as of such 10th Business
Day, such Purchaser shall be deemed to have notified the Company
that it does not elect to participate.

 

(c)           If
by 5:30 p.m. (New York City time) on the 10th Business Day after
the Purchaser has received the Pre-Notice, notification by the
Purchaser of its willingness to participate in the Subsequent
Financing (or to cause their designees to participate) is, in the
aggregate, less than the total amount of the Subsequent Financing,
then the Company may effect the remaining portion of such
Subsequent Financing on the terms and with the Persons set forth in
the Subsequent Financing Notice.

 

(d)           The
Company must provide the Purchaser with a second Subsequent
Financing Notice, and the Purchaser will again have the right of
participation set forth above in this Section 4.7, if the
Subsequent Financing subject to the initial Subsequent Financing
Notice is not consummated for any reason on the terms set forth in
such Subsequent Financing Notice within 30 Business Days after the
date of the initial Subsequent Financing Notice.

 

(e)           The
Company and each Purchaser agree that if any Purchaser elects to
participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or
provision whereby such Purchaser shall be required to agree to any
restrictions on trading as to any of the Securities purchased
hereunder or be required to consent to any amendment to or
termination of, or grant any waiver, release or the like under or
in connection with, this Agreement, without the prior written
consent of such Purchaser.

 

(f)           Notwithstanding
anything to the contrary in this Section 4.7 and unless
otherwise agreed to by such Purchaser, the Company shall either
confirm in writing to such Purchaser that the transaction with
respect to the Subsequent Financing has been abandoned or shall
publicly disclose its intention to issue the securities in the
Subsequent Financing, in either case in such a manner such that
such Purchaser will not be in possession of any material,
non-public information, by the 10th Business Day
following delivery of the Subsequent Financing Notice. If by such
tenth 10th
Business Day, no public disclosure regarding a transaction with
respect to the Subsequent Financing has been made, and no notice
regarding the abandonment of such transaction has been received by
such Purchaser, such transaction shall be deemed to have been
abandoned and such Purchaser shall not be deemed to be in
possession of any material, non-public information with respect to
the Company or any of its Subsidiaries.

 

 

 

-18-

 

 

 

4.8                 Subsequent
Equity Sales.

 

(a)          From
the date hereof until such time as the Purchaser no longer holds
the Note, the Company will not, without the consent of the
Purchaser, enter into any Equity Line of Credit or similar
agreement, nor issue nor agree to issue any Variable Priced Equity
Linked Instruments (collectively, the “Variable Rate
Transactions”). For purposes hereof, “Equity Line of
Credit” means any transaction involving a written agreement
between the Company and an investor or underwriter whereby the
Company has the right to “put” its securities to the
investor or underwriter over an agreed period of time and at future
determined price or price formula (other than customary
“preemptive” or “participation” rights or
“weighted average” or “full-ratchet”
antidilution provisions or in connection with fixed-price rights
offerings and similar transactions that are not Variable Priced
Equity Linked Instruments), and “Variable Priced Equity
Linked Instruments” means: (A) any debt or equity securities
which are convertible into, exercisable or exchangeable for, or
carry the right to receive additional shares of Common Stock either
(1) at any conversion, exercise or exchange rate or other price
that is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance
of such debt or equity security, or (2) with a conversion, exercise
or exchange price that is subject to being reset on more than one
occasion at some future date at any time after the initial issuance
of such debt or equity security due to a change in the market price
of the Company’s Common Stock since date of initial issuance
(other than customary “preemptive” or
“participation” rights or “weighted
average” or “full-ratchet” antidilution
provisions or in connection with fixed-price rights offerings and
similar transactions), and (B) any amortizing convertible security
which amortizes prior to its maturity date, where the Company is
required or has the option to (or any investor in such transaction
has the option to require the Company to) make such amortization
payments in shares of Common Stock which are valued at a price that
is based upon and/or varies with the trading prices of or
quotations for Common Stock at any time after the initial issuance
of such debt or equity security (whether or not such payments in
stock are subject to certain equity conditions). For purposes of
determining the total consideration for a convertible instrument
(including a right to purchase equity of the Company) issued,
subject to an original issue or similar discount or which principal
amount is directly or indirectly increased after issuance, the
consideration will be deemed to be the actual cash amount received
by the Company in consideration of the original issuance of such
convertible instrument.

 

(b)           Notwithstanding
the foregoing, this Section 4.8
shall not apply in respect of an
Exempt Issuance (except that no Variable Rate Transaction shall be
an Exempt Issuance). The Company shall provide the Purchaser with
notice of any such issuance or sale in the manner for disclosure of
Subsequent Financings set forth in Section
4.7.

 

4.9                   Rule
144 Opinion and Registration Rights.

 

 (a)           Provided
that the provisions of Rule 144 so permit, the Company shall
deliver to the Purchaser an opinion of counsel (which opinion the
Company will be responsible for obtaining at its own cost) that the
Shares may be resold pursuant to Rule 144 free of restrictive
legends.

 

(b)           Whether
or not Rule 144 is not available for the resale of the Registrable
Securities, the Company shall register for resale all Registrable
Securities promptly in accordance with the terms of the
Registration Rights Agreement, if the Registration Statement
registering the Registrable Securities for resale is not filed as
required by this Section 4.9(b)
or not declared effective when or
maintained as provided in the Registration Rights Agreement, then
the Company shall pay to the Purchaser for liquidated damages an
amount of cash equal to 2% of the product of (i) the number of
Registrable Securities and (ii) the Closing Sale Price or Closing
Bid Price as of the trading day immediately prior to the Event Date
(as defined in the Registration Rights Agreement), such payments to
be made on the Event Date and every thirty (30) day anniversary
thereafter with a maximum penalty of 12%, until such time when the
Registration Statement is declared effective.

 

 

 

-19-

 

 

 

(c)           Purchaser
acknowledges its primary responsibilities under the Securities Act
and accordingly will not sell or otherwise transfer the Securities
or any interest therein without complying with the requirements of
the Securities Act and applicable law. While the Registration
Statement remains effective, Purchaser may sell its Registrable
Securities in accordance with the plan of distribution contained in
the Registration Statement and if it does so it will comply
therewith and with the related prospectus delivery requirements
unless an exemption therefrom is available. Purchaser shall, if
notified by the Company in writing at any time that the
Registration Statement is not effective or that the prospectus
included in such Registration Statement no longer complies with the
requirements of Section 10 of the Securities Act, refrain from
selling such Registrable Securities until such time as the Company
notifies the Purchaser in writing that the Registration Statement
is effective or the prospectus is compliant with Section 10 of the
Securities Act, unless Purchaser is able to, and does, sell such
Registrable Securities pursuant to an available exemption from the
registration requirements of Section 5 of the Securities Act.
Purchaser agrees to promptly furnish to the Company such
information that the Company reasonably requires from that
Purchaser for use in the Registration Statement and consents to the
inclusion of such information in the Registration
Statement.

 

 (d)           Both
the Company and the Transfer Agent, and their respective directors,
executive officers, employees and agents, may rely on this
Section
4.9.

 

(e)
Until such time as the Purchaser or any of its assignees no longer
owns any Registrable Securities, the Company shall timely file all reports required to be filed
with the SEC pursuant to the Exchange Act, and the Company shall
not terminate the registration of the Common Stock under Section 12
of the Exchange Act and/or the Company’s status as an issuer
required to file reports under the 1934 Act even if the Exchange
Act or the rules and regulations thereunder would no longer require
or otherwise permit such termination. The Company shall maintain
its eligibility to register the Registrable Securities on Form S-3
or Form S-1 (or another appropriate form in accordance
therewith).

   

4.10           
Conversion and Exercise
Procedures. The forms of Conversion Notice and Notice of
Exercise included in the Note and Warrant set forth the totality of
the procedures required of the Purchaser in order to convert the
Note or to exercise the Warrant. No additional legal opinion, other
information or instructions shall be required of the Purchaser to
convert their Note or exercise their Warrant. Without limiting the
preceding sentences, no ink-original Conversion Notice or Notice of
Exercise shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Conversion Notice
or Notice of Exercise form be required in order to convert the Note
or exercise the Warrant. The Company shall honor conversions of the
Note and exercise of the Warrant and shall deliver Shares and
Warrant Shares in accordance with the terms, conditions and time
periods set forth in the Transaction Documents.

 

4.11            
Maintenance of
Property. The Company shall use
its commercially reasonable efforts to keep all of its property,
which is necessary or useful to the conduct of its business, in
good working order and condition, ordinary wear and tear
excepted.

 

4.12          
Preservation of
Corporate Existence. The
Company shall preserve and maintain its corporate existence,
rights, privileges and franchises in the jurisdiction of its
incorporation, and qualify and remain qualified, as a foreign
corporation in each jurisdiction in which such qualification is
necessary in view of its business or operations and where the
failure to qualify or remain qualified might reasonably have a
Material Adverse Effect.

 

4.13           Blue
Sky. 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
applicable Closing 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 the
Purchaser.

 

4.14           Minimum
Balance. Company shall at all times maintain in the deposit
account with respect to which the Purchaser has a perfected first
priority security interest in, and control over, or such other
arrangement as agreed by the Purchaser in its sole discretion,
unrestricted cash greater than or equal to six months of interest
payments on the then-outstanding Note.

 

 

 

-20-

 

 

 

4.15
Ranking of
Note. Other than Permitted
Indebtedness subject to Permitted Liens, no Indebtedness of the
Company and/or any Subsidiaries, at the Closing will be in any
manner and/or for any reason (i) senior to the Note and/or any
other liabilities and/or obligations of the Company and/or any
Subsidiaries to the Purchaser in right of payment or otherwise,
and/or (ii) pari passu with the Note and/or any other liabilities and/or
obligations of the Company and/or any Subsidiaries to the Purchaser
in right of payment and/or in otherwise, whether with respect to
payment, redemptions, principal, interest, or upon liquidation,
dissolution or otherwise.

 

4.16 Subsidiary Guarantees,
Etc.  For so long as the Note remains outstanding, upon
any entity becoming a Subsidiary, the Company shall cause each such
Subsidiary to become party to all of the Security Documents, to the
extent required in the Security Documents and take all actions
required by the Security Documents in form and substance
satisfactory to the Collateral Agent and the
Purchaser.

 

4.17 Stock
Adjustments. Until the Note is
no longer outstanding, the Company shall not effect any stock
combination, reverse stock split or other similar transaction
submitted for stockholder approval at a meeting of the shareholders
of the Company or via written consent of stockholders (or make any
public announcement or disclosure with respect to any of the
foregoing) without the prior written consent of the Purchaser,
which consent shall not be unreasonably
withheld.

 

4.18 New
Subsidiaries. Neither the
Company nor the Subsidiaries shall form or acquire any Subsidiaries
without the express prior written consent of the Collateral Agent
and the Purchaser, which written consent shall, among other
conditions, be conditioned upon, among other items, compliance by
the Company and each Subsidiary.

 

4.19 Disclosure of
Confidential Information. The
Company shall not, and the Company shall cause each of the
Subsidiaries and each of its and their respective officers,
directors, employees and agents not to, provide the Purchaser with
any material, non-public information regarding the Company and/or
any of the Subsidiaries from and after the date hereof without the
express prior written consent of the Purchaser (which may be
granted or withheld in the Purchaser’s sole discretion). In
the event of a breach of any of the foregoing covenants, the
Purchaser shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of such
breach or such material, non-public information, as applicable,
without the prior approval by the Company, any of its respective
Subsidiaries, or any of its or their respective officers,
directors, employees or agents. The Purchaser shall not have any
liability to the Company, any of the Subsidiaries, or any of its or
their respective officers, directors, employees, affiliates,
stockholders or agents, for any such disclosure. To the extent that
the Company or any of the Subsidiaries delivers any material,
non-public information to the Purchaser without the
Purchaser’s prior written consent, the Company hereby
covenants and agrees that the Purchaser shall not have any duty of
confidentiality with respect to, or a duty not to trade on the
basis of, such material, non-public information;. If the Company,
any of its respective Subsidiaries, or any of their respective
officers, directors, employees or agents, provides the Purchaser
with material non-public information relating to the Company and/or
any of the Subsidiaries, and such disclosure is without the consent
of the Purchaser, the Company shall immediately publicly disclose
such confidential information on a Current Report on Form 8-K or
otherwise.

 

4.20. Dissolution
Medite GmbH (Austria) and
MEDITE sp.zo.o (Poland). On or prior to the date that is 120
days after the Closing, Medite GmbH (Austria) and MEDITE sp.zo.o
(Poland) shall be dissolved or wound up.

 

4.21
Revenue and Operating
Expenses Review. Annexed hereto as Schedule 4.21 is a schedule of
the Company’s projected revenue and operating expenses. If at
the end of any month commencing with the month ended October 31,
2017, the actual revenue together with any cash raised during such
month through the sale of equity securities decreases below the
projected revenue (the difference between (x) the sum of projected
revenue and proceeds of the equity financing and (y) actual revenue
for the month, being the “Shortfall”), then the
operating expenses shall be decreased by the amount of the
Shortfall.

 

 

 

 

-21-

 

 

 

ARTICLE V.

 

MISCELLANEOUS

 

5.1         Reserved.

 

5.2         Fees
and Expenses. Except as
expressly set forth below and in the Transaction Documents to the
contrary, each party shall pay the documented fees and expenses of
its advisers, counsel, accountants and other experts, if any, and
all other documented out-of-pocket expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for
same-day processing of any instruction letter delivered by the
Company and any exercise notice delivered by a Purchaser), stamp
taxes and other taxes and duties levied in connection with the
delivery of any Securities to the Purchaser. The Company agrees to
pay outside counsel for the Purchaser ($20,000 of which has been
paid in advance) its documented fees together with reasonable and
documented costs including those necessary to provide the Purchaser
with a lien on all the Collateral of the Company. The Company
agrees to pay the Purchaser for due diligence fees ($7,000 of which
has been paid in advance) such due diligence fee not to exceed
$20,000 in the aggregate. From the Purchaser’s Closing
Subscription Amount, the Purchaser may withhold fees in order to
pay its due diligence fees and the fees due its counsel as well as
any costs incurred by such counsel provided that written notice is
given to the Company.

 

5.3         Entire
Agreement. The Transaction
Documents, together with the exhibits and schedules thereto,
contain the entire understanding of the parties with respect to the
subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to
such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.

 

5.4         Notices.
Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile or email attachment at the facsimile number or email
address as set forth on the signature pages attached hereto at or
prior to 5:30 p.m. (New York City time) on a Business Day, (b) the
next Business Day after the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the
facsimile number or email address as set forth on the signature
pages attached hereto on a day that is not a Business Day or later
than 5:30 p.m. (New York City time) on any Business Day, (c) the
second (2nd)
Business Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth on the signature pages attached hereto.

 

5.5         Amendments;
Waivers. No provision of this
Agreement may be waived, modified, supplemented or amended except
in a written instrument signed, in the case of an amendment, by the
Company and the Purchaser who holds at least a majority in interest
of the then-outstanding Note or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is
sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of
any such right. Any amendment effected in accordance with
accordance with this Section 5.5 shall be binding upon the
Purchaser and holder of Securities and the
Company.

 

5.6         Successors
and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The Company may not assign
this Agreement or any rights or obligations hereunder without the
prior written consent of the Purchaser then holding the outstanding
Note (other than by merger). Purchaser may assign any or all of its
rights under this Agreement to any Person to whom Purchaser assigns
or transfers any Securities, provided that such transferee agrees
in writing to be bound, with respect to the transferred Securities,
by the provisions of the Transaction Documents that apply to the
“Purchaser”; provided, so long as no Event of Default
has occurred and is continuing, the Secured Party shall not assign
any of its rights hereunder to a competitor of any Company
..

 

5.7         No
Third-Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and
their respective successors and permitted assigns and is not for
the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Sections 4.5 and 4.9
and this Section 5.7.

 

 

 

-22-

 

 

 

5.8         Governing
Law; Exclusive Jurisdiction.
All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York, Borough of Manhattan. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees
not to assert in any Action or Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such
Action or Proceeding is improper or is an inconvenient venue for
such Proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such
Action or Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. If any party shall commence an Action or
Proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company elsewhere in
this Agreement, the prevailing party in such Action or Proceeding
shall be reimbursed by the non-prevailing party for its reasonable
attorneys’ fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Action or
Proceeding.

 

5.9         Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities.

 

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

 

5.11                   Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected,
impaired, or invalidated, as long as the essential terms and
conditions of this Note for each party remain valid, binding, and
enforceable. The parties shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term,
provision, covenant or restriction.

 

5.12                   Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of
the Purchaser and the Company will be entitled to specific
performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss
incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert
in any Action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

 

5.13                   Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the
expiration of any right required or granted herein shall not be a
Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

5.14                   Construction.
The parties agree that each of them and/or their respective counsel
have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the
Transaction Documents or any amendments thereto. In addition, each
and every reference to share prices and shares of Common Stock in
any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and
other similar transactions of the Common Stock that occur after the
date of this Agreement.

 

5.15                   WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE
PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY
JURY.

 

(Signature Pages Follow)

 

 

-23-

 

 

 

 

 

 

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

 

 

	

MEDITE CANCER DIAGNOSTICS, INC.

 

 

 

	

Address
for Notice:

 

	

By:/s/
David E. Patterson

Name:
David Patterson

Title:
Chief Executive Officer

 

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

	

4203 SW
34th Street

Orlando,
Florida 32811

 

Email:

	
 

	
 

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

 

-24-

 

[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

 

Name of
Purchaser: GPB Debt Holdings II, LLC

Signature of Authorized Signatory of
Purchaser: /s/
David Gentile

Name of
Authorized Signatory: David Gentile

Title
of Authorized Signatory: Manager

Email
Address of Authorized Signatory:
_________________________________________

Facsimile Number of
Authorized Signatory:
__________________________________________

Address
for Notice to Purchaser:

535
West 24th
Street, Floor 4

New
York, NY 10011

 

 

Address
for Delivery of Securities to Purchaser (if not same as address for
notice):

 

 

 

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

-25-

 

 

 

Exhibit A

 

13.25% Senior Secured Convertible Note

 

(attached)

 

 

 

 

-26-

 

 

 

Exhibit B

 

Warrant

 

(attached)

 

 

 

 

 

-27-

 

 

 

Exhibit C

 

Security Agreement

 

(attached)

 

 

 

 

-28-

 

 

 

Exhibit
D

 

Intellectual
Property Security Agreement

 

(attached)

 

 

 

 

-29-

 

Exhibit E

 

Guaranty
Agreements

 

(attached)

 

 

 

 

-30-

 

 

 

Exhibit F

 

Affidavit
of Confession of Judgment

 

(attached)

 

 

 

 

-31-

 

 

Exhibit G

 

Solvency Certificate

 

(attached)

 

 

 

 

 

 

-32-

 

 

 

Exhibit H

 

Registration Rights Agreement

 

(attached)

 

 

 

 

-33-

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