Document:

Exhibit 10.3

 

WARRANT

NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR QUALIFICATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THIS WARRANT IS SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH HEREIN AND IN A SECURITIES PURCHASE AGREEMENT, DATED AS OF AUGUST 29, 2016, AND AS AMENDED FROM TIME TO TIME, COPIES OF WHICH ARE AVAILABLE WITH THE SECRETARY OF THE COMPANY.

ONCOCYTE CORPORATION

COMMON STOCK WARRANT

 

	
Warrant No.  [·]

	
Date of Original Issuance: August 29, 2016

 

OncoCyte Corporation, a California corporation (the “Company”), hereby certifies that, for value received, [·], or its registered assign (the “Holder”), is entitled to purchase from the Company [·] shares (as adjusted from time to time as provided in Section 11) of common stock, par value $0.001 per share, of the Company (the “Common Stock”) (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”), at the Exercise Price determined pursuant to Section 3 hereof, at any time after the earlier of (i) the date that Shareholder Approval is first obtained, or (ii) November 28, 2016 (the “Initial Exercisability Date”) through and including the fifth anniversary of the Initial Exercisability Date (the “Expiration Date”), and subject to the following terms and conditions:

1.         Purchase Agreement. This Common Stock Warrant (this “Warrant”) is one of the Warrants issued by the Company in connection with that certain Securities Purchase Agreement, entered into on August 29, 2016 (as amended from time to time, the “Purchase Agreement”), by and among the Company and Holder and certain other Purchasers, and is subject to, and the Company and the Holder shall be bound by, all the applicable terms, conditions and provisions of the Purchase Agreement.

2.         Definitions. In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein shall have the meanings assigned to such terms in the Purchase Agreement. As used herein, the following terms shall have the following respective meanings:

“Black Scholes Value” means the value of a Warrant based on the Black Scholes Option Pricing Model obtained from the “OV” function on the Bloomberg determined as of the day of closing of the Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the closing of the Fundamental Transaction and the Expiration Date, (B) an expected volatility equal to the lesser of 60% and the 180-day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the public announcement of the Fundamental Transaction, (C) the price per Warrant Share shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in the Fundamental Transaction and (D) a remaining option time equal to the time between the date of the closing of the Fundamental Transaction and the Expiration Date. For purposes of the foregoing, the value of any non-cash consideration in any Fundamental Transaction will be determined in good faith by the Board of Directors of the Company or the Acquirer.

 

“Bloomberg” means Bloomberg, L.P.

“Closing Sale Price” means, for the Common Stock the last closing trade price for such security on the Principal Trading Market, as reported by Bloomberg, or, if the Principal Trading Market begins to operate on an extended hours basis and does not designate the closing trade price, then the last trade price, respectively, of such security prior to 4:00 p.m., New York time, as reported by Bloomberg.

“Eligible Market” means any of the NYSE MKT, The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).

“Fair Market Value” of one share of Common Stock on the Date of Exercise (as hereinafter defined) means (i) the VWAP for the Trading Day immediately prior to the Date of Exercise, or (ii) if an Eligible Market is not then the Principal Trading Market, the average of the reported sales prices reported by Bloomberg on the Trading Market for the Common Stock on the Trading Day immediately prior to the Date of Exercise, or, if there is no sales price on such Trading Day, the last sales price reported by Bloomberg for such Trading Day, or (iii) if neither of the foregoing applies, the last sales price of the Common Stock in the over-the-counter market as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) (or any similar organization or agency succeeding to its functions of reporting prices) for the Common Stock as reported by Bloomberg, or if no sales price is so reported for the Common Stock, the last bid price of such Common Stock as reported by Bloomberg or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith business judgment.

“NYSE MKT” means NYSE MKT LLC, formerly known as the American Stock Exchange.

“Principal Trading Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading.

“Shares” means the Company’s currently authorized common stock, no par value per share, and stock of any other class or other consideration into which such currently authorized capital stock may hereafter have been changed.

“Trading Day” means (a) a day on which the Common Stock is listed or quoted and traded on the Principal Trading Market (other than the OTC Bulletin Board), or (b) if the Common Stock is not then listed or quoted and traded on any Eligible Market, then a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means the OTC Bulletin Board or any Eligible Market, or any national securities exchange, market or trading or quotation facility on which the Common Stock is then listed or quoted.

“VWAP” shall mean the daily volume weighted average price (based on a Trading Day from 9:30 a.m. to 4:00 p.m. (New York time)) of the Common Stock on the Principal Trading Market as reported by Bloomberg Financial L.P. using the AQR function.

3.         Exercise Price. This Warrant may be exercised for a price per Warrant Share equal $3.25, subject to adjustment from time to time pursuant to Section 11 (the “Exercise Price”).

4.         Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

5.         Transfer of Warrant.

(a)            No Holder may, directly or indirectly, sell, exchange, assign or otherwise transfer all or any portion of this Warrant without the prior written consent of the Company; provided that, subject in each case to Section 5(b) hereof, (i) a Holder that is a natural person may transfer all or a portion of this Warrant to one or more trusts for the benefit of such Holder, such Holder’s spouse, a lineal descendant of such Holder or such Holder’s parents, the spouse of any such descendant or a lineal descendant of any such spouse and (ii) a Holder that is a Person other than a natural person may transfer all or a portion of the Warrant to an Affiliate of such Holder.

(b)           Subject to the Holder’s appropriate compliance with the restrictive legend on this Warrant and the transfer restrictions set forth herein and in the Purchase Agreement, the Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon (i) surrender of this Warrant, with the Form of Assignment substantially in the form attached hereto as Attachment B duly completed and signed, to the Company at its address specified herein and (ii) delivery to the Company at its address specified herein an investment letter, in form and substance reasonably satisfactory to the Company, signed by the transferee. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

6.         Duration and Exercise of Warrants; Mandatory Cash Settlement.

(a)           Duration. This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the Initial Exercisability Date and through and including the Expiration Date. At 6:30 p.m., New York City time, on the Expiration Date (the “Exercise Period”), the portion of this Warrant not exercised prior thereto shall be and become void and of no value.

 

(b)           Mandatory Cash Settlement.  Notwithstanding anything in this Warrant or in the Purchase Agreement to the contrary, if (i) Shareholder Approval has not been obtained on or before November 28, 2016, or (ii) at any time during the Exercise Period, there are then an insufficient number of authorized and reserved shares of Common Stock to provide for the exercise of the rights represented by this Warrant, then this Warrant may not be exercised for Warrant Shares and the Company shall instead settle any exercises of this Warrant by making a cash payment to the Holder, in the amount as determined below (and in lieu of delivery of the number of Warrant Shares so indicated by the Holder to be purchased upon any such exercise) (such cash settlement, a “Mandatory Cash Settlement”). In the event of a Mandatory Cash Settlement pursuant to this Section 6(b), in lieu of delivery of any Warrant Shares upon such exercise, the Company shall pay to the Holder an amount in cash equal to the result obtained by multiplying (a) the number of Warrant Shares so indicated by the Holder to be purchased upon such exercise as set forth in the Holder’s Exercise Notice (as defined below) by (b) the excess of (i) the Fair Market Value of one share Common Stock on the Date of Exercise, over (ii) the Exercise Price (such amount, the “Cash Settlement Payment”). In the event of a Mandatory Cash Settlement pursuant to this Section 6(b), the Company shall pay the Holder the Cash Settlement Payment as soon as reasonably practical after the Date of Exercise, and in any event within three (3) Trading Days thereafter. For the avoidance of doubt, if the Fair Market Value of one share Common Stock on the Date of Exercise is less than the Exercise Price, then no Cash Settlement Payment shall be payable to the Holder.

(c)            Not later than three (3) Trading Days after each Date of Exercise (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate representing the Warrant Shares which, to the extent provided in the Purchase Agreement, shall be free of restrictive legends and trading restrictions representing the number of Warrant Shares being acquired upon the exercise of the Warrant. If, on any applicable Share Delivery Date, such certificate(s) (or the Cash Settlement Payment in lieu thereof in the event Mandatory Cash Settlement is then required pursuant to Section 6(b)) are not timely delivered to or as directed by the Holder, then the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate(s), to rescind such exercise, in which event the Company shall promptly return to the Holder the original Warrants (if any) delivered to the Company and if applicable, the Holder shall promptly return to the Company the Common Stock book-entry statements issued to such Holder pursuant to the rescinded Exercise Notice.

(d)           In connection with any exercise of this Warrant (other than any exercise that is subject to Mandatory Cash Settlement as provided in Section 6(b)), if the Company shall fail for any reason to deliver the Warrant Shares by the Share Delivery Date, and if on or after the Share Delivery Date the Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by the Holder of any portion of such Warrant Shares that the Holder anticipated receiving by the Share Delivery Date, then the Company shall, within three (3) Trading Days after the Holder’s request and in the Holder’s discretion, either: (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the number of Warrant Shares so purchased, at which point the Company’s obligation to deliver such Warrant Shares shall terminate, or (ii)  pay cash to the Holder on each Trading Day an amount equal to 1% of the product of (A) the aggregate number of shares of Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled and (B) the Closing Sale Price of Common Stock on the Trading Day immediately preceding the last possible date on which the Company could have issued such shares of Common Stock to the Holder.

7.         Delivery of Warrant Shares on Exercise; Net Exercise.

(a)           To effect exercises hereunder, the Holder shall not be required to physically surrender this Warrant, and unless this Warrant is surrendered upon such exercise, the execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares (if any). Upon delivery of an Exercise Notice substantially in the form attached hereto as Attachment A (an “Exercise Notice”) to the Company at its address for notice determined as set forth herein, and, unless Mandatory Cash Settlement is then required pursuant to Section 6(b), upon payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased (which may take the form a “net exercise” as permitted pursuant to Section 7(b) and so indicated in the Exercise Notice), the Company shall promptly (but in no event later than three (3) Trading Days after the Date of Exercise) either (x) pay the Holder the Cash Settlement Payment in the event Mandatory Cash Settlement is then required pursuant to Section 6(b) or (y) in the event Mandatory Cash Settlement is not then required pursuant to Section 6(b), issue and deliver, or cause its transfer agent to issue and deliver, to the Holder a certificate for the Warrant Shares issuable upon such exercise registered in the name of the Holder or its designee. A “Date of Exercise” means the date on which the Holder shall have delivered to the Company: (i) an Exercise Notice, appropriately completed and duly signed, and (ii) unless either (x) Mandatory Cash Settlement is then required pursuant to Section 6(b) or (y) the exercise of this Warrant is being effected as a “net exercise” pursuant to Section 7(b), as applicable, payment of the Exercise Price (by certified or official bank check, intra-bank account transfer or wire transfer) for the number of Warrant Shares so indicated by the Holder to be purchased.

 

(b)           Provided that (i) the Fair Market Value of one share of Common Stock (as of the Date of Exercise) is greater than the Exercise Price (as of the Date of Exercise), and (ii) a Registration Statement (as defined in the Purchase Agreement) with respect to the underlying shares of Common Stock is not effective on the Exercise Date, then the Holder may, at its election, effect a “net exercise” of this Warrant as indicated in the Holder’s Exercise Notice, in which event, if so effected, the Holder shall be entitled to receive Warrant Shares equal to the value (as determined below) of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company, if applicable, together with the appropriately completed and duly signed Exercise Notice, in which event the Company shall issue to the Holder a number of Warrant Shares computed using the following formula:

 

	
X =

	
Y*(A-B)

		
A

 

Where:

X = the number of Warrant Shares to be issued to the Holder

Y = the number of Warrant Shares with respect to which this Warrant is being exercised

A = the Fair Market Value of one share of Common Stock (as of the Date of Exercise)

B = Exercise Price (as of the Date of Exercise)

For the avoidance of doubt, if the foregoing calculation results in zero or a negative number, then no Warrant Shares shall be issued upon exercise pursuant to this Section 7(b).

(c)           The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver the certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof; provided, however, that, unless Mandatory Cash Settlement is then strictly required pursuant to Section 6(b), under no circumstances shall the Company be required to settle any exercises of this Warrant by cash payment or to otherwise “net cash settle” this Warrant.

 

8.         Charges, Taxes and Expenses. Issuance and delivery of certificated or uncertificated shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee, or other incidental tax or expense in respect of the issuance of such shares, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

9.         Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a new Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a new Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a new Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver this mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the new Warrant.

10.       Reservation of Warrant Shares. The Company covenants that, from and after the Shareholder Approval date, the Company shall at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from liens, encumbrances or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 11). The Company covenants and warrants that, from and after the Shareholder Approval date, all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and non-assessable.

11.       Certain Adjustments. The Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant is subject to adjustment from time to time as set forth in this Section 11.

(a)           Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company; then in each such case (A) the Exercise Price shall be adjusted by multiplying the Exercise Price then in effect by a fraction, the numerator of which equals the number of shares of Common Stock outstanding immediately prior to such event (excluding treasury shares, if any), and the denominator of which equals the number of shares of Common Stock outstanding immediately after such event (excluding treasury shares, if any), and (B) the number of Warrant Shares issuable hereunder shall be concurrently adjusted by multiplying such number by the reciprocal of such fraction. Such adjustments shall take effect (i) if a record date shall have been fixed for determining the shareholders or security holders, as applicable, of the Company entitled to receive such dividend, distribution or issuance by reclassification, as the case may be, immediately after such record date, or (ii) otherwise, immediately after the effective date of such dividend, distribution, subdivision, combination, or issuance by reclassification, as the case may be.

 

(b)           Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or a series of related transactions, (A) effects any merger, consolidation or reorganization or other similar transaction or a series of related transactions which results in the voting securities of the Company outstanding immediately prior thereto representing immediately thereafter (either by remaining outstanding or by being converted into voting securities of the surviving or acquiring entity) less than 50% of the combined voting power of the voting securities of or economic interests in the Company or such surviving or acquiring entity outstanding immediately after such merger, consolidation or reorganization, (B) effects any sale, lease, license, assignment, transfer, conveyance, distribution or other disposition of all or substantially all of its assets, (C) effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (except for issuances by reclassification contemplated by Section 11(a)(iv) or transactions for the purpose of changing the domicile of the Company), or (D) consummates a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) whereby such other Person or “group” acquires more than 50% of the voting power of or economic interests in the then outstanding shares of capital stock of the Company (after giving effect to such transaction), or (ii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person or group of Persons) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property (each transaction or series of transactions referred to in clause (i) or (ii) above, a “Fundamental Transaction”); then, the Company shall (x) unless such Fundamental Transaction is an unsolicited third-party tender offer, use its best efforts to ensure that lawful and adequate provision shall be made whereby the Holder shall thereafter continue to have the right to purchase and receive, upon the basis and upon the terms and conditions herein specified (or as nearly equivalent as practicable), and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of this Warrant, shares in the surviving or acquiring entity in the Fundamental Transaction (such entity, or the parent thereof in a consolidated group, the “Acquirer”) with an aggregate value equal to the Black Scholes Value of the Holder’s Warrants (an “Acquirer Assumption”); and (y) if an Acquirer Assumption does not occur, the Acquirer shall pay to the Holder an amount equal to the aggregate value equal to the Black Scholes Value of the Holder’s Warrants, which amount shall be paid in cash in the event that the Company’s shareholders receive cash consideration from the Acquirer at the closing of the Fundamental Transaction, or shall be such stock, securities or other non-cash consideration of the Acquirer as it pays to the Company’s shareholders as consideration for the Fundamental Transaction.

(c)           Adjustment Rules.

(i)          Any adjustments pursuant to this Section 11 shall be made successively whenever any event referred to herein shall occur, except that, notwithstanding any other provision of this Section 11, no adjustment shall be made to the number of Warrant Shares to be delivered to the Holder (or to the Exercise Price) if such adjustment represents less than 1% of the number of Warrant Shares previously required to be so delivered, but any lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent adjustment which together with any adjustments so carried forward shall amount to 1% or more of the number of Warrant Shares to be so delivered.

(ii)          No adjustments shall be made pursuant to this Section 11 in respect of the issuance of Warrant Shares upon exercise of the Warrant.

(iii)          If the Company shall take a record of the holders of its shares for any purpose referred to in this Section 11, then (x) such record date shall be deemed to be the date of the issuance, sale, distribution or grant in question and (y) if the Company shall legally abandon such action prior to effecting such action, no adjustment shall be made pursuant to this Section 11 in respect of such action.

(iv)          In computing adjustments under this Section 11, (A) fractional interests in Shares shall be taken into account to the nearest one-thousandth of a Share, and (B) calculations of the Exercise Price shall be carried to the nearest one-thousandth of one cent.

(d)           Proceedings Prior to Any Action Requiring Adjustment. Subject to the below proviso, as a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 11, the Company shall take any action which may be necessary, including obtaining regulatory approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all Warrant Shares which the Holder is entitled to receive upon exercise of the Warrant; provided, however, that, notwithstanding the foregoing, effecting the Shareholder Approval shall not be a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 11.

(e)           Notice of Adjustment. Not less than 20 days prior to the record date or effective date, as the case may be, of any action which requires or might require an adjustment or readjustment pursuant to this Section 11, the Company shall give notice to the Holder of such event, describing such event in reasonable detail and specifying the record date or effective date, as the case may be, and, if determinable, the required adjustment and computation thereof. If the required adjustment is not determinable as the time of such notice, the Company shall give notice to the Holder of such adjustment and computation as soon as reasonably practicable after such adjustment becomes determinable. In connection with any such adjustment or readjustment, the Company shall prepare a report setting forth such adjustment or readjustment and showing in reasonable detail the method of calculation thereof and the facts upon which such adjustment or readjustment is based, including a statement of (i) the number of Shares outstanding or deemed to be outstanding, and (ii) the Exercise Price in effect immediately prior to such issue or sale and as adjusted and readjusted (if required by this Section 11) on account thereof. The Company shall forthwith mail a copy of each such report to the Holder and shall, upon the written request at any time of the Holder, furnish to such Holder a like report setting forth the Exercise Price at the time in effect and showing in reasonable detail how it was calculated. The Company shall also keep copies of all such reports at its office and shall cause the same to be available for inspection at such office during normal business hours by the Holder.

(f)            Disputes. Any dispute which arises between the Holder and the Company with respect to the calculation of the adjusted Exercise Price or Warrant Shares issuable upon exercise shall be determined by the independent auditors of the Company in accordance with the terms of this Warrant, and such determination shall be binding upon the Company and the holders of the Warrants and the Warrant Shares if made in good faith and without manifest error. 

12.       [RESERVED]

13.       No Fractional Shares. No fractional shares of Common Stock shall be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay the Holder an amount of cash equal to the product of such fraction multiplied by the Fair Market Value of one share of Common Stock on the Date of Exercise.

 

14.       No Impairment. The Company shall not by any action including, without limitation, amending its Certificate of Incorporation, any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such action, as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company shall take all such action as may be necessary or appropriate, including by taking the actions set forth in Section 6.12 of the Purchase Agreement, in order that the Company may, from and after the Shareholder Approval date, validly issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant at the then Exercise Price therefor.

15.       No Rights as a Shareholder; Notice to Holder. Nothing contained in this Warrant shall be construed as conferring upon the Holder the right to vote or to consent or to receive notice as a shareholder in respect of any meeting of shareholders for the election of directors of the Company or any other matter, or any rights whatsoever as a shareholder of the Company.

16.       Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

17.       Miscellaneous.

(a)           Notices. Any and all notices or other communications or deliveries hereunder (including any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number pursuant to this Section 17(a) prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified pursuant to this Section 17(a) on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by nationally recognized overnight courier service to the street address specified pursuant to this Section 17(a), or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be as follows:

(i)         if to the Company, to:

OncoCyte Corporation

1010 Atlantic Avenue, Suite 102

Alameda, California 94501

	 	
Attn:

	
Chief Executive Officer

	 	
Email:

	
wannett@oncocyte.com

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

 

DLA Piper LLP (US)

2000 University Avenue

East Palo Alto, CA 94303

	 	
Attn:

	
Bruce Jenett

Andrew D. Ledbetter

	 	
Email:

	
bruce.jenett@dlapiper.com

	 	
Email:

	
andrew.ledbetter@dlapiper.com

(ii)        if to the Holder, to the address, facsimile number or street address appearing on the Warrant Register (which shall initially be the facsimile number and street address set forth for the initial Holder in the Purchase Agreement);

or to such other address, facsimile number or email address as the Company or the Holder may provide to the other in accordance with this Section 17(a).

(b)           Assignment. Subject to the restrictions on transfer described herein and in the Purchase Agreement, the rights and obligations of the Company and the Holder shall be binding upon, and inure to the benefit of, the successors, assigns, heirs, administrators and transferees of the parties. Without the prior written consent of the Holder, which may be withheld in the Holder’s sole discretion, this Warrant may not be assigned by the Company except to a successor in the event of a Fundamental Transaction.

(c)           No Third Party Beneficiaries. Nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.

(d)           Amendments; Waiver. Any term of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the Holder. No waiver of any default with respect to any provision, condition or requirement of this Warrant shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

(e)           Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws.

(f)            Severability. If one or more provisions of this Warrant are held to be unenforceable under applicable law in any respect, such provision shall be excluded from this Warrant and the balance of this Warrant shall be construed and interpreted as if such provision were so excluded and shall be enforceable in accordance with its remaining terms.

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

 

	 	
ONCOCYTE CORPORATION

	 	 	 
	 	
By:

	 
	 	
Name:

	
William Annett

	 	
Title:

	
President and Chief Executive Officer

 

[Signature Page to Warrant]

 

ATTACHMENT A

EXERCISE NOTICE

To OncoCyte Corporation:

The undersigned hereby irrevocably elects to purchase shares (the “Shares”) of common stock, no par value per share (“Common Stock”), of OncoCyte Corporation, a California corporation, pursuant to Warrant No. [·] originally issued on August 29, 2016 (the “Warrant”). The undersigned elects to utilize the following manner of exercise:

Shares:

		☐	Full Exercise of Warrant

		☐	Partial Exercise of Warrant (in the amount of Shares)

Exercise Price: $

The Holder intends that payment of the Exercise Price shall be made as (check one): *

		☐	“Net Exercise” under Section 7(b) of the Warrant (if available)

		☐	Certified or Official Bank Check

		☐	Intra-Bank Account Transfer

		☐	Wire Transfer

[Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the [undersigned]/[the undersigned’s nominee as is specified below].]

 

	
Date:

		
	 	 	 
	
Full Name of Holder†:

		
	 	 	  
	
Signature of Holder or Authorized Representative:

		
	 	 	 
	
Name and Title of Authorized Representative††:

		
	 	 	 
	
Additional Signature of Holder (if jointly held):

		
	 	 	 
	
Social Security or Tax Identification Number:

		
	 	 	 
	
Address of Holder:

		
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
Full Name of Nominee of Holder††:

		
	 	 	 

 

	
Address of Nominee of Holder††:

		
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

	*	Payable unless Mandatory Cash Settlement is required pursuant to Section 6(b) of the Warrant at the time this Warrant is being exercised.

 

	†	Must conform in all respects to name of holder as specified on the face of the Warrant.

 

	††	If applicable.

 

ATTACHMENT B

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto [·] the right represented by the attached Common Stock Warrant to purchase [·] shares of Common Stock of OncoCyte Corporation, a Delaware corporation (the “Company”), to which the Warrant relates and appoints [·] as attorney to transfer said right on the books of the Company with full power of substitution in the premises.

 

	
Date:

		
	 		 
	
Full Name of Holder*:

		
	 		 
	
Signature of Holder or Authorized Representative:

		
	 		 
	
Name and Title of Authorized Representative†:

		
	 		 
	
Additional Signature of Holder (if jointly held):

		
	 		 
	
Address of Holder:

		
	 		
 

	 	 	 
	 	 	  
	 	 	 
	 	 	  
	  		
	
Full Name of Transferee:

		 
	  		
	
Address of Transferee:

	
 

	
 

	  		
	  	 	  
	   	 	 
	 	 	  
	 	 	 
	 	 	  
	
In the presence of:

	 	 
	 	 	  

 

	*	Must conform in all respects to name of holder as specified on the face of the Warrant.

 

	†	If applicable.Exhibit

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

ZEBRA® PARTNERCONNECT PROGRAM

AMENDMENT TO PARTNEREMPOWERTM DISTRIBUTION AGREEMENT

THIS AMENDMENT ("Amendment ") is made on this 7th day of April, 2016 between: 
Symbol Technologies, LLC. (formerly known as Symbol Technologies, Inc.), a corporation formed under Delaware law with an office at One Zebra Plaza Holtsville, NY 11742 ("Symbol”); and
Zebra Technologies do Brasil – Comércio de Produtos de Informática Ltda., a company incorporated and organized under the laws of Brazil, with offices at Av. Magalhães de Castro, 4800, sala 72-A, Cidade Jardim, CEP 05676-120, São Paulo, SP (“Zebra Brazil”) 
(collectively “Zebra” or “Zebra Technologies”)
And 
ScanSource, Inc., a company incorporated in South Carolina, with its registered office at 6 Logue Court, Greenville, South Carolina 29615 (“ScanSource"). 
ScanSource Latin America, Inc. a ScanSource Affiliate incorporated in Florida, whose registered business address is 1935 NW 87 Avenue, Miami, Florida 33172 (“ScanSource Latin America”)
CDC Brazil Distribuidora de Technologias Especiais Ltda.,  a ScanSource Affiliate incorporated and organized under the laws of Brazil, with offices in the City of São José dos Pinhais, State of Paraná, at Avenida Rui Barbosa, 2529, Módulos 11 and 12, Bairro Jardim Ipê, CEP: 83055-320, enrolled with the Taxpayer Register (CNPJ/MF) under No. 05.607.657/0001-35 (“ScanSource Brazil”)

SCANSOURCE DE MEXICO S. DE R.L. DE C.V., a ScanSource Affiliate incorporated in Mexico, whose registered business address is Calle 4 No. 298, Colonia Franccionamiento Industrial Alce Blanco, Naucalpan de Juarez, Estado de México 53370 (“ScanSource Mexico”)

(Collectively “Distributor”)

 Zebra Technologies and the Distributor are referred to collectively as “Parties” and individually as a “Party”. 

WHEREAS:
		
	(A)
	Symbol and ScanSource have entered on February 12, 2014 into a distribution agreement (as amended) which relates to Zebra Technologies Enterprise Visibility and Mobility (“EVM”) products and services, and which as acknowledged by the Parties by entering into this Amendment, is in full force and effect and valid as when this Amendment is executed (the "Distribution Agreement");  

		
	(B)
	Motorola Solutions Ltda. was a party to Schedule 4A (Participation Agreement) of the Distribution Agreement, which covers the sale of Products and Services in  Brazil (the “Participation Agreement”); 

		
	(C) 
	The Participation Agreement was assigned from Motorola Solutions Ltda. to Zebra Brazil with an effective date of October 27, 2014 following the acquisition of Motorola Solutions’ Enterprise business by a Zebra Technologies Affiliate; 

		
	(D) 
	Following the integration of Zebra’s existing channel programs, the PartnerEmpowerTM channel program is being discontinued and replaced by a new integrated channel program Zebra® PartnerConnect, which Zebra is going to launch on April 11, 2016 or at a later date to be solely determined and publicly announced by Zebra as the Program go-live date (the “Effective Date”); 

		
	(E) 
	Distributor desires to be transitioned to the Program (as defined in section 1.1 below) with effect from the Effective Date, and Zebra has agreed to include Distributor in the Program. 

		
	(F) 
	The Parties wish to adapt the terms of the Distribution Agreement to create a suitable contractual framework within which to continue trading under the Program as related to Zebra EVM products and services only. 

(G)  Zebra Technologies Asset  Identification and Tracking (“AIT”) products and services, shall not be within the scope of the Distribution Agreement and this Amendment.   
THEREFORE, in consideration of the mutual covenants and promises, and subject to the terms and conditions of the Distribution Agreement and this Amendment, Distributor and Zebra have agreed with the following amendments to the Distribution Agreement, which is renamed to PartnerConnect EVM Distribution Agreement (and herein the “Agreement”) as of the Effective Date.  

		
	1.1
	Definitions. 

    
“Program” when used in the Agreement, shall mean the Zebra® PartnerConnect program including without limitation its requirements, benefits, terms and criteria, as amended from time to time by Zebra Technologies. Any reference to the PartnerEmpowerTM program is deemed to be changed to the Zebra PartnerConnect program.  All “Motorola Solutions” references in the Agreement (including its Schedules and amendments) will be replaced with “Zebra” and all “Motorola Solutions, Ltda.” references in the Agreement (including its Schedules and amendments) will be replaced with “Zebra Brazil”.  

‘‘Web Site(s)’’ or “Site” when used in the Agreement, shall mean the Zebra business-to-business e-commerce web sites and other web portals including without limitations www.zebra.com, www.zebra.com/partnerconnect-tc or any equivalent website thereof. The www.motorolasolutions.com/partnerempoweradditionaltermsandconditions website and any documents posted thereon will not be valid for transactions conducted under the Agreement following the Effective Date.       
		
	1.2
	Warranty. In Section 13 (“Warranty”) the reference to the Standard Warranty Statement posted at:  www.motorolasolutions.com/partnerempoweradditionaltermsandconditions (the “Site”), will be replaced with the new Zebra Consolidated Global Limited warranty posted at www.zebra.com/partnerconnect-tc or any equivalent website thereof.  

		
	1.3
	End User License Agreement. Since Zebra Technologies has revised its End User Software License Agreements, any reference to Motorola Solutions’ End-User Software License Agreement is replaced with the reference to the End User License Agreements posted at www.zebra.com/partnerconnect-tc or any equivalent website thereof.  

		
	1.4
	Purchase and Sale of Services. The “Motorola Services Contract” governing the purchase and sale of services by Distributor shall be referred to as the “Zebra Services Contract” and will consist of  the documents posted at www.zebra.com/partnerconnect-tc (or any equivalent website thereof) under Sale of Services (break/fix services and Other services/Professional  Services Terms)  

  
		
	1.5
	Trademarks. The provision entitled MOTOROLA SOLUTIONS TRADEMARKS AND SERVICE MARKS will be deleted in its entirety and replaced with the following: 

                                                                                                          
1.5.1      Distributor acknowledges that ZEBRA, the stylized ZEBRA head, the Products and Services names, and the Zebra channel partner identifiers (collectively, the “Trademarks”) are trademarks or registered trademarks of Zebra and/or its Affiliates.  As long as Distributor complies with the Program and this Agreement, Zebra and/or its Affiliates hereby authorizes and grants to Distributor a non-exclusive, non-transferrable, non-assignable, revocable license to use and display the Trademarks in promotional and advertising materials used by Distributor solely to promote the sale of Products and Services in the Territory. Distributor may only use those Trademarks that identify the Products and Services Distributor is authorized to sell.  
1.5.2     Distributor shall comply with all guidelines regarding the use of the Trademarks published by Zebra on Zebra’s website, or made available to Distributor upon written request. Zebra may revise such guidelines from time to time in its 

sole and absolute discretion by posting on the Program website. From time to time, Zebra may reasonably request, and Distributor shall provide, copies of materials bearing Trademarks for purposes of verifying their quality and compliance with Zebra’s guidelines and the terms of this provision.
1.5.3     Distributor acknowledges and agrees that it has no right, title or interest in or to any of the Trademarks, and understands, accepts and agrees that its usage of the Trademarks, including all goodwill and any additional value created by such usage of the Trademarks, shall inure solely to the benefit of Zebra and/or its Affiliates.  Without limiting the foregoing, Distributor hereby assigns to Zebra and/or its Affiliates all right, title and interest in the Trademarks, together with the goodwill attaching thereto, which may inure to Distributor in connection with the Program and this Agreement or from Distributor’s use of the Trademarks hereunder. Nothing in this Agreement shall be construed as granting to Distributor any right, title or interest in or to the Trademarks other than the rights expressly granted hereby to use and display the Trademarks.
1.5.4     Distributor shall not (i) remove, alter or modify the Trademarks, or other trademarks, proprietary notices, labels, or other identifying marks placed by, or on behalf of, Zebra and/or its Affiliates on the Products or associated packaging, manuals or other associated materials; (ii) add its brand name, trademark or any other mark, label or proprietary notice to any Product without Zebra’s express written authorization; (iii) use or incorporate any of the Trademarks or similar names or marks, or names or marks likely to cause confusion, or any limitation or variant of the foregoing, as part of any 
product or service name, any trade name under which Distributor conducts business, or any business name, or any domain name; (iv) create sub-brands under any of the Trademarks, or otherwise combine any of the Trademarks with any other text, trademark, trade name, domain name or other designation or origin; (v) attempt to register or cooperate in any effort by any third party to register anywhere in the world in connection with any products or services any Trademarks or any trademarks, service marks, domain names or trade names containing the Trademarks or that are similar to the Trademarks or likely to cause confusion with the Trademark; (vi) challenge or participate in any challenge of Zebra’s and/or its Affiliates’ rights in the Trademarks or the registration thereof; or (vii) do anything else inconsistent with Zebra’s and/or its Affiliates’ ownership of the Trademarks.  

1.5.5     Distributor shall: (i) immediately discontinue any advertising, practice or use deemed by Zebra to have misleading, deceptive or detrimental effect; (ii) convey to Zebra and/or its Affiliates any domain names which Distributor owns or controls that incorporate any of the Trademarks; and (iii) provide any assistance and cooperation as may be reasonably requested by Zebra and/or its Affiliates, including without limitation, execution of documents to protect Zebra’s and/or its Affiliates’ trademark rights. 

1.5.6     Distributor hereby authorizes and grants to Zebra and/or its Affiliates a non-exclusive, revocable license to use and display Distributor’s trade names, trademarks and logos in presentations and on the Website for the sole purpose of identifying Zebra’s relationship with Distributor.

1.5.7.     Distributor’s rights to use any Trademark under this Section shall cease upon termination of Distributor’s participation in the Program or as Zebra otherwise notifies Distributor. Since unauthorized use of intellectual property would greatly diminish the value of this property and cause Zebra and/or its Affiliates irreparable harm, Distributor acknowledges that Zebra and/or its Affiliates will be entitled – in addition to any other remedies they may have – to seek equitable relief to protect their respective intellectual property rights, including, without limitation, temporary and permanent injunctive relief without proof of damage.   

1.6    Distributor Upfront Discounts Off List Price and Payment Terms.  

1.6.1 Distributor’s Upfront discounts off list price will no longer be contained in Annex 2 to Schedule 2 and in Annex 1 to Schedule 4A of the Agreement and these Annexes are hereby deleted in their entirety. [*****] 
      1.6.2 Payment Terms for Latin America
Notwithstanding anything to the contrary contained in the Agreement and the Participation Agreement of even date hereof between the parties to this Amendment and SCANSOURCE DE MEXICO S. DE R.L. DE C.V.,  unless otherwise agreed to in writing by Zebra, all payments (including for services) are strictly net and shall be due in full, in a Zebra bank account on or before: [*****]

		
	1.7       
	Term and Termination. This Amendment may be terminated at any time by either Party in accordance with the termination provisions contained in the Agreement. The Amendment shall not have an Initial Period. 

		
	1.8      
	Governing Law and Dispute Resolutions. The terms of the Governing Law and Dispute Resolution provisions of the Agreement will apply to this Amendment.   

		
	1.9
	Flow Down Provisions.  The Flow Down Requirements posted on Distributor website in accordance 

with Section 6 of the Agreement will be replaced with the requirements included in Attachment 1 to this Amendment. 

		
	2.0
	Notices. The paragraphs included in section 8.1 of the Participation Agreement to indicate Zebra Brazil’s addresses to receive notices under the Participation Agreement are hereby replaced with the following paragraphs:

If to Zebra Technologies:

Zebra Technologies International, LLC
3 Overlook Point, Lincolnshire, Illinois   60069
Attention:  Vice President, NA Channel Sales
Telephone: (847) 793-2765
Facsimile:   (847) 353 2966 

With a copy to:

Zebra Technologies Corporation
 3 Overlook Point, Lincolnshire Illinois  60069
Attention: Law Department

If to Zebra Brazil:

Zebra Technologies do Brasil – Comércio de Produtos de Informática Ltda 
Attention: Departamento Legal
Av. Magalhães de Castro, 4800, sala 72-A
Cidade Jardim, São Paulo, SP
CEP 05676-120

With copy to:
Zebra Technologies do Brasil – Comércio de Produtos de Informática Ltda 
Attention: Legal Department
3100 SW 145th Avenue Suite 340
Miramar, FL 33027
United States    

2.1        General.  

2.1.1 Except as specifically stated in the Amendment, the terms of the Agreement are in all other aspects ratified, confirmed, and shall continue in full force and effect under the new agreement name ‘PartnerConnect EVM Distribution Agreement’. 

2.1.2 The definitions used herein shall have the meaning assign thereto in the Agreement, unless otherwise expressly stated herein. 
2.1.3 In the event that there is a conflict in the interpretation of any provision in the Agreement with anything in this Amendment, the terms of this Amendment shall prevail. 
		
	2.2 ​
	Signature Counterparts.  This Amendment and any further amendments or addenda to the Agreement, may be executed in two or more of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. A facsimile copy or computer image, such as a PDF or tiff image, of a signature shall be treated as and shall have the same effect as an original signature.  In addition, a true and correct facsimile copy or computer image of this Amendment 

and any further amendment or addenda to the Agreement shall be treated as and shall have the same effect as an original signed copy of such document.  
		
	2.3
	The Named End-User Accounts Excluded from Distributor in Latin America and the Caribbean

As listed in Section 4 of Schedule 1 of the Agreement are hereby removed entirely. Effective on the Effective Date,  Distributor will no longer have the obligation of refraining from selling Products to resellers attempting to resell them to the end users listed in such section.

		
	2.4
	PartnerConnect Channel Program Changes.  Nothing contained in Zebra’s PartnerConnect Channel Program shall modify, without Distributor’s prior written consent, the following terms of the Agreement as may have been amended in relevant part:  Section 8 – Terms and Conditions of Sale.

IN WITNESS HEREOF, the parties have executed this Amendment under hand on the date first above written.
SYMBOL TECHNOLOGIES, LLC.                           SCANSOURCE, INC. 
 
By:       /s/ Thomas E. Sheahen        By:      /s/ Buck Baker    
Name:      Thomas E. Sheahen        Name:      Buck Baker    
Title:      VP NA Channel Sales        Title:      WW President, Barcode/Security    
Date:      4/25/16        Date:      7 Apr. 2016    

		
	ZEBRA TECHNOLOGIES DO BRASIL
	CDC BRASIL DISTRIBUIDORA DE

		
	– COMÉRCIO DE PRODUTOS DE
	TECNOLOGIAS ESPECIAIS LTDA.

INFORMÁTICA LTDA.      

By:       /s/ [illegible]        By:       /s/ Gerald Lyons    
Name:      [illegible]        Name:      Gerald Lyons    
Title:      Director        Title:      Board of Advisors    
Date:      12/4/15        Date:      12/4/16     
SCANSOURCE LATIN AMERICA, INC                   SCANSOURCE DE MEXICO S. DE R.L. DE C.V.

By:       /s/ Gerald Lyons        By:       /s/ Gerald Lyons    
Name:      Gerald Lyons        Name:      Gerald Lyons    
Title:      Director        Title:      Board of Managers    
Date:      12/4/16        Date:      12/4/16    

ATTACHMENT 1 – FLOW DOWN REQUIREMENTS
(TO BE POSTED ON DISTRIBUTOR WEBSITE PER SECTION 6 OF THE AGREEMENT)
ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO ALL SALES OF ZEBRA TECHNOLOGIES CORPORATION OR ANY OF ITS SUBSIDIAIRWES’ PRODUCTS AND SERVICES
Below are the Zebra Technologies Corporation and its subsidiaries’ (“Zebra”) standard terms and conditions (“T&Cs”) which are required to be flowed-down by ScanSource, Inc. and its affiliates (“SCSC”) to resellers (“Resellers or “you”) who buy Zebra products and services that are part of Zebra’s Enterprise Visibility and Mobility ( “EVM”) business (“Products”) from SCSC for further resale ( directly or indirectly) to end user customers purchasing the Products for their own use and not for resale (“End Users”).   You shall ensure the T&Cs are part of your (or of any authorized reseller to whom you sell for further resale to End Users) binding contracts with End Users covering the supply of Products.  
1. Warranty (Hyperlink)
		
	•
	Warranty Flow-Down Requirements and Zebra Standard Product Warranty  

2.   Services Terms and Conditions (Hyperlink)
		
	•
	Zebra Sell-Through Terms and Conditions  including Break/Fix and Professional Services Terms  

3. Zebra Software Redistribution Provisions (Hyperlink)
		
	•
	Software Redistribution Requirements  

		
	•
	Zebra End User Software License Agreements (EULAs)  

4.  Sales where the End User is a US Federal Government Entity (Hyperlink)
   1.    WARRANTIES
WARRANTY FLOW-DOWN REQUIREMENTS AND ZEBRA STANDARD PRODUCT WARRANTY 
1.1    Each Product warranty is extended by Zebra to the customer of such Product who acquires the Product for its own use and not for resale (“End User”) and not to any reseller of the Product.  Any such warranty is not assignable or transferable from the original End User to any later purchaser. You will provide the original End User with the appropriate product warranty and, if applicable, a software license and software warranty before the sale of the Products. 
1.2    Products are warranted against defects in workmanship and material under the terms and for a period as defined by the Product specification data sheet furnished with each Product at shipment, and in the absence of such data sheet in accordance with the then current Zebra Consolidated Global Limited Warranty posted on www.zebra.com/partnerconnect-tc, (or any equivalent website thereof) for the applicable Product(s), provided the Product remains unmodified and is operated under normal and proper conditions.  The current version of the Zebra Consolidated Global Limited Warranty is provided herein.   

1.3    You may not issue any warranties, guarantees, or licenses that purport to obligate Zebra to any person or entity other than the applicable warranties or license specified herein and furnished for the Products by Zebra. To the extent that you make any warranty or representation to your customers or any other third party in respect of the Products which is not consistent with Zebra’s warranty, including without limitation the warranty duration, it is understood that such representation or warranty shall be made solely for your account and shall not bind Zebra. You shall indemnify and hold Zebra harmless from and against any claims, liabilities and expenses (including, but not limited to, attorney’s fees) asserted against, or incurred by, Zebra resulting from the making by you of any such representation or warranty and/or any other express or implied warranty you make.  
1.4    THE ZEBRA CONSOLIDATED GLOBAL WARRANTY ATTACHED HEREIN IS THE ONLY WARRANTY PROVIDED BY ZEBRA, AND ZEBRA AND ITS LICENSORS EXPRESSLY DISCLAIM ALL OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. ZEBRA DOES NOT WARRANT THAT THE OPERATION OF THE PRODUCTS WILL BE UNINTERRUPTED OR ERROR-FREE, OR THAT DEFECTS IN THE PRODUCTS WILL BE CORRECTED. NO ORAL OR WRITTEN REPRESENTATIONS MADE BY ZEBRA OR AN AGENT THEREOF SHALL CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THIS WARRANTY. ZEBRA DOES NOT WARRANT ANY PRODUCTS THAT HAVE BEEN OPERATED IN EXCESS OF SPECIFICATIONS, DAMAGED, MISUSED, NEGLECTED, OR IMPROPERLY INSTALLED. 
IN NO EVENT SHALL ZEBRA OR ANY OF THE LICENSORS, DIRECTORS, OFFICERS, EMPLOYEES OR AFFILIATES OF THE FOREGOING BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR SIMILAR DAMAGES WHATSOEVER, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION AND THE LIKE, WHETHER FORESEEABLE OR UNFORESEEABLE, ARISING OUT OF THE USE OR INABILITY TO USE THE PRODUCTS OR ACCOMPANYING WRITTEN MATERIALS, REGARDLESS OF THE BASIS OF THE CLAIM AND EVEN IF ZEBRA OR A ZEBRA REPRESENTATIVE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THIS LIMITATION WILL NOT APPLY IN CASE OF PERSONAL INJURY ONLY WHERE AND TO THE EXTENT THAT APPLICABLE LAW REQUIRES SUCH LIABILITY. 
2.  SERVICES TERMS AND CONDITIONS
ZEBRA ‘SELL-THROUGH’ TERMS AND CONDITIONS INCLUDING BREAK/FIX AND PROFESSIONAL SERVICES TERMS  
2.1. Terms:
For purposes hereof the following terms will have the meaning assigned thereto herein:
“Break/Fix Services” means services that:
i.    Are performed or delivered on a device that has failed or been damaged to restore it to the defined specifications, either at a Zebra authorized repair center or at the End User location.
ii.    Provide preventive maintenance on a device before component or other failure, and/or
iii.    Provide full access to technical support resources and the right to use and copy entitled software releases, if any, for the products covered by a service agreement or warranty. Examples include, without limitation: Service from the Start, Service Center Bronze, Advance Exchange, Software Support, Flat Rate Repair and Time & Material (as described in the applicable SDDs). 

“Indirect Model” shall mean when you procure the Sell Through Services from Authorized Distributor(s) for further resale to End Users, only on the Zebra Services Contract terms.
 “Other Services” means any Services other than Break/Fix Services.
“Sell Through Services” shall mean the provision of Services by Zebra (or its outsourced resources) to End Users.
“Services” shall mean the services delivered by Zebra or its designee.  

“Subcontracted Services” shall mean when you are subcontracting Zebra to perform the Services while maintaining the sole point of contact with the End Users.
“Zebra Services Contract” means: 
		
	a.
	Those Zebra’s terms and conditions posted at www.zebra.com/partnerconnect-tc, or any equivalnet website thereof, under the title Break/Fix Services, and when Other Services are purchased under the title Professional Services Terms ( the urrent versions provided herein) ; and

b.    Zebra’s standard service description documents (“SDDs”) which define the scope of the Sell Through Services and the Subcontracted Services. Zebra may at its option amend the terms posted on this website and the SDDs at any time without notice.

2.2.    Sell Through Services
2.2.1    Your agreement with SCSC establishes the terms under which you may procure Services from  SCSC for further resale to End Users.

		
	2.2.2
	(a)    You agree that you will procure and offer the Sell Through Services only on the basis of the Indirect Model.

		
	 
	(b)    You acknowledge and agree that:

		
	(i)
	the Zebra Services Contract shall be the operative contract between you and End Users for the procurement and the supply (as applicable) of the Sell Through Services;

		
	(ii)
	any agreement(s) it enters into with End User(s) for the provision of Sell Through Services will be on the basis of the Zebra Services Contract and Zebra will be an intended third party beneficiary to such agreement(s); and

in any order acknowledgment issued by you to indicate its acceptance of an End User’s purchase order for Sell Through Services, you will state: “All purchases of these services are subject to Zebra terms and conditions posted at www.zebra.com/partnerconnect-tc, or any equivalent website thereof, or attached.”
(c)    In the event you do not comply with the terms of sub section 2.2.2(b) above, and a claim is asserted or brought by an End User against Zebra which arises out of or is in any way connected to:

		
	(i)
	End User’s assertion that the Zebra Services Contract does not regulate the supply of the Sell Through Services from Zebra to End User; or

		
	(ii)
	End User’s exertion of its contractual rights against Zebra where End User has not entered into the Zebra Services Contract with you and instead is relying upon different contractual terms (the “Services Claim”), 

you agree  to defend Zebra in the Services Claim (at Zebra’s request) and to indemnify and hold Zebra harmless from and against: any costs, settlement, service credits or similar losses due and/or payable as a result of the Services Claim; and/or any judgment awarding damages or other remedy against Zebra in the Services Claim. 

		
	2.2.3
	Subcontracted Services. You agree that in the event Zebra provides Subcontracted  Services the terms of the Zebra Services Contract will apply.

3.        ZEBRA SOFTWARE REDISTRIBUTION PROVISIONS
SOFTWARE REDISTRIBUTION REQUIREMENTS INCLUDING END USER LICENSE AGREEMENTS (EULAs).
3.1.      Zebra Software. 
3.1.1.    The Products contain embedded, pre-loaded, or installed Software. “Software” means: (i) Zebra proprietary software in object code format, and adaptations, translations, decompilations, disassemblies, emulations, or derivative works of such software; 

and (ii) any corrections, fixes, modifications, enhancements, new versions and new releases of the software provided by Zebra; “Documentation” means product and software documentation that specifies technical and performance features and capabilities, together with all materials, knowledge and source code related thereto and the user, operation and training manuals for the Software (including all physical or electronic media upon which such information is provided or derivative works of the foregoing).
3.1 .2    You acknowledge and agree that the Software and Documentation constitute valuable trade secrets and the confidential and proprietary property of Zebra. You shall not disclose to any third party (including End Users), or permit access to any third party to the Software or the Documentation, or to any portion thereof, except to the extent such access is permitted under an applicable valid, enforceable and written End User License Agreement as specified in Section 3.1.3 below  (“EULA”) and either entitlement under a valid Zebra warranty or a Zebra support agreement. When you are advised that a specific software license, a specific warranty or a specific support terms apply, you will follow the procedures in connection with the distribution and/or licensing of the applicable Products and will obtain End User agreement to the applicable Zebra software license and support agreement(s) prior to delivery thereof to such End User. You shall not, nor will you permit a third party to, reverse engineer, translate, decompile, disassemble, decode or use any Software or Documentation except as may be permitted under the above agreements or as permitted under applicable law. Title to all Software and Documentation and all rights in patents, copyrights, trade secrets, and other intellectual property rights therein, are and shall remain vested in, Zebra, its licensors and suppliers. There is no grant to any rights in source code. You shall not: (i) modify, merge, or incorporate any form or portion of the Software or the Documentation with other program material or create a derivative work therefrom; or (ii) keep any copies of Software or Documentation after they have been provided to the End User. You agree to maintain Zebra’s copyright notice on the Software and Documentation, and to include the same on any authorized copies you make, in whole or in part. Should any government customer indicate to you, formally or informally, that said customer believes it has greater rights in Software or Documentation than Zebra grants under an applicable EULA, you will notify Zebra immediately. Except as provided herein, these T&Cs shall not be deemed to grant to you or to End Users either directly or by implication, estoppel, or otherwise, any license or right under any patents, copyrights, trademarks or trade secrets of Zebra or any third party.

3.1.3  End User Software License Agreements ( EULAs):  You will include the Zebra’s End-User Software License Agreements available on www.zebra.com/partnerconnect-tc or any equivalent website thereof, with the current version provided herein,  in all your transactions with End Users involving Software and Documentation.   
4. Transactions with Government
All transactions with any government, governmental or regulatory entity or body, department, commission, board, agency or instrumentality of the United States of America and of any state, local or regional division thereof (hereinafter a “US Governmental Authority”) or any transaction in which a US Governmental Authority is the End User or is directly or indirectly providing funds for the transaction, whether through a prime contract or a subcontract thereunder or a grant or other transaction, shall be subject to the additional terms and conditions contained in the Transaction with Government, Sales to Government Attachment, posted at www.zebra.com/partnerconnect-tc or any equivalent website thereof,  with the current version provided herein.

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