Document:

Exhibit 10.21

 

THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM REGISTRATION UNDER
THE FOREGOING LAWS. ACCORDINGLY, THIS NOTE AND ANY SECURITIES INTO WHICH IT MAY BE CONVERTED MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF WITHOUT (1) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH SALE, TRANSFER OR OTHER DISPOSITION MAY LAWFULLY
BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR (2) SUCH REGISTRATION. 

 

CONVERTIBLE
PROMISSORY NOTE

 

MODULAR
MEDICAL, INC.

 

	Note
    Number:	Series
    0221-
	 	 
	Date
    of Note:	February
    ___, 2021
	 	 
	Principal
    Amount of Note:	$

 

For
value received, Modular Medical, Inc., a Nevada corporation (the “Company”),
promises to pay to the undersigned holder or such party’s assigns (the “Holder”) the principal
amount set forth above with interest on the outstanding principal amount at the rate of 12% per annum. Interest shall commence
with the date hereof and shall continue on the outstanding principal amount until paid in full or converted. Interest shall be
computed on the basis of a year of 365 days for the actual number of days elapsed. All unpaid interest and principal shall be
due and payable September 30, 2021 (the “Maturity Date”) unless converted prior to such date as set
forth below.

1.             Basic Terms.

(a)              
Payments. All payments of interest and principal shall be in lawful money of the United States of America. All payments
shall be applied first to accrued interest, and thereafter to principal.

(b)              
Prepayment. The Company may not prepay this Convertible Promissory Note (“Note”) prior to the Maturity
Date.

2.             Conversion and Repayment.

(a)              
Conversion upon a Qualified Financing. In the event that the Company issues and sells shares of its equity securities
(“Equity Securities”) to investors (the “Investors”) while this Note remains
outstanding in an equity financing with total proceeds to the Company of not less than $5,000,000.00 (excluding the conversion
of the Note or other convertible securities issued for capital raising purposes ) (a “Qualified Equity Financing”),
then the outstanding principal amount of this Note and any unpaid accrued interest shall automatically convert in whole without
any further action by the Holder into Equity Securities sold in the Qualified Equity Financing at a conversion price equal to
the lowest cash price paid per share for Equity Securities by the Investors in the Qualified Equity Financing multiplied by 0.80.
The issuance of Equity Securities pursuant to the conversion of this Note shall be upon and subject to the same terms and conditions
applicable to Equity Securities sold in the Qualified Financing.

    	 

    	 

    

(b)              
Optional Conversion at non-Qualified Financing. In the event the Company consummates, while this Note remains outstanding,
an equity financing pursuant to which it sells shares of its Equity Securities in a transaction that does not constitute a Qualified
Equity Financing, then each Holder shall have the option to treat such equity financing as a Qualified Equity Financing on the
same terms set forth herein. This option shall be available for 5 business days after the completion of any such financing is
noticed to the Holder.

(c)               
Maturity Date Payment or Conversion. In the event that this Note remains outstanding on the Maturity Date, then the
outstanding principal balance of this Note and any unpaid accrued interest shall, upon the election at least five (5) days prior
to the Maturity Date of a majority of holders of the same series as this Note (with each such holder receiving one vote for each
$1.00 of outstanding principal held by such holder) become due and payable as of the Maturity Date; provided, that the Holder
of this Note shall have the right for thirty (30) following the Maturity Date to convert all or part of the outstanding principal
balance and accrued interest into shares of the Company’s common stock, at the conversion price of $2.87 per share or at
a 20% discount to any financing consummated during the 30 day period following the Maturity Date.

(d)              
Change of Control. If the Company consummates a Change of Control (as defined below) while this Note remains outstanding,
the Company shall convert the outstanding principal balance of this Note and any unpaid accrued interest, or any portion thereof
as determined by the Holder, into shares of the Company’s Common Stock at a conversion price equal to $2.87 per share. For
purposes of this Note, a “Change of Control” means (i) a consolidation or merger of the Company with
or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation,
merger or reorganization in which the shares of capital stock of the Company immediately prior to such consolidation, merger or
reorganization continue to represent a majority of the voting power of the surviving entity immediately after such consolidation,
merger or reorganization; (ii) any transaction or series of related transactions to which the Company is a party in which in excess
of 50% of the Company’s voting power is transferred; (iii) the sale or transfer of all or substantially all of the Company’s
assets, or the exclusive license of all or substantially all of the Company’s material intellectual property; or (iv) the
dissolution and winding up of the Company. The Company shall give the Holder notice of a Change of Control not less than 10 days
prior to the anticipated date of consummation of the Change of Control. Any repayment pursuant to this paragraph in connection
with a Change of Control shall be subject to any required tax withholdings, and may be made by the Company (or any party to such
Change of Control or its agent) following the Change of Control in connection with payment procedures established in connection
with such Change of Control.

(e)               
Procedure for Conversion. In connection with any conversion of this Note into Equity Securities, the Holder shall surrender
this Note to the Company and deliver to the Company any documentation reasonably required by the Company (including, in the case
of a Qualified Equity Financing, all financing documents executed by the Investors in connection with such Qualified Equity Financing). 
The Company shall not be required to issue or deliver the Equity Securities into which this Note may convert until the Holder
has surrendered this Note to the Company and delivered to the Company any such documentation.  Upon the conversion of this
Note into Equity Securities pursuant to the terms hereof, as to any fraction of a share the Holder would otherwise be entitled
to purchase upon conversion, the Company will round up to the next whole share.

(f)                
Interest Accrual. If a Change of Control or Qualified Equity Financing is consummated, all interest on this Note shall
be deemed to have stopped accruing as of a date selected by the Company that is up to 10 days prior to the signing of the definitive
agreement for the Change of Control or Qualified Equity Financing.

    	2

    	 

    

3.             Representations and Warranties.

(a)              Representations and Warranties of the Company. The Company hereby represents and warrants to the Holder as of the date
the first Note was issued as follows:

(i)               Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada. The Company has the requisite corporate power to own and operate its properties
and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities
and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure
to do so would not have a material adverse effect on the Company or its business (a “Material Adverse Effect”).

(ii)              Corporate Power. The Company has all requisite corporate power to issue this Note and to carry out and perform
its obligations under this Note. The Company’s Board of Directors (the “Board”) has approved the
issuance of this Note based upon a reasonable belief that the issuance of this Note is appropriate for the Company after reasonable
inquiry concerning the Company’s financing objectives and financial situation.

(iii)             Authorization. All corporate action on the part of the Company and the Board necessary for the issuance and delivery
of this Note has been taken. This Note constitutes a valid and binding obligation of the Company enforceable in accordance with
its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect
to rights to indemnity, subject to federal and state securities laws. Any securities issued upon conversion of this Note (the
“Conversion Securities”), when issued in compliance with the provisions of this Note, will be validly
issued, fully paid, nonassessable, free of any liens or encumbrances and issued in compliance with all applicable federal and
securities laws.

(iv)            
Governmental Consents. All consents, approvals, orders or authorizations of, or registrations, qualifications, designations,
declarations or filings with, any governmental authority required on the part of the Company in connection with issuance of this
Note has been obtained.

(v)               Compliance with Laws. To its knowledge, the Company is not in violation of any applicable statute, rule, regulation,
order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct
of its business or the ownership of its properties, which violation of which would have a Material Adverse Effect.

(vi)            
Compliance with Other Instruments. The Company is not in violation or default of any term of its certificate of incorporation
or bylaws, or of any provision of any mortgage, indenture or contract to which it is a party and by which it is bound or of any
judgment, decree, order or writ, other than such violation(s) that would not have a Material Adverse Effect. The execution, delivery
and performance of this Note will not result in any such violation or be in conflict with, or constitute, with or without the
passage of time and giving of notice, either a default under any such provision, instrument, judgment, decree, order or writ or
an event that results in the creation of any lien, charge or encumbrance upon any assets of the Company or the suspension, revocation,
impairment, forfeiture, or nonrenewal of any material permit, license, authorization or approval applicable to the Company, its
business or operations or any of its assets or properties. Without limiting the foregoing, the Company has obtained all waivers
reasonably necessary with respect to any preemptive rights, rights of first refusal or similar rights, including any notice or
offering periods provided for as part of any such rights, in order for the Company to consummate the transactions contemplated
hereunder without any third party obtaining any rights to cause the Company to offer or issue any securities of the Company as
a result of the consummation of the transactions contemplated hereunder.

    	3

    	 

    

(vii)          
No “Bad Actor” Disqualification. The Company has exercised reasonable care to determine whether any Company
Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i)
through (viii), as modified by Rules 506(d)(2) and (d)(3), under the Act (“Disqualification Events”).
To the Company’s knowledge, no Company Covered Person is subject to a Disqualification Event. The Company has complied,
to the extent required, with any disclosure obligations under Rule 506(e) under the Act. For purposes of this Note, “Company
Covered Persons” are those persons specified in Rule 506(d)(1) under the Act; provided, however, that Company Covered
Persons do not include (a) any Holder, or (b) any person or entity that is deemed to be an affiliated issuer of the Company solely
as a result of the relationship between the Company and any Holder.

(viii)         
Offering. Assuming the accuracy of the representations and warranties of the Holder contained in subsection (b)
below, the offer, issue, and sale of this Note and the Conversion Securities (collectively, the “Securities”)
are and will be exempt from the registration and prospectus delivery requirements of the Act, and have been registered or qualified
(or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable
state securities laws.

(ix)            
Use of Proceeds. The Company shall use the proceeds of this Note solely for the operations of its business,
and not for any personal, family or household purpose. 

(b)              
Representations and Warranties of the Holder. The Holder hereby represents and warrants to the Company as of
the date hereof as follows:

(i)               Purchase for Own Account. The Holder is acquiring the Securities solely for the Holder’s own account and beneficial
interest for investment and not for sale or with a view to distribution of the Securities or any part thereof, has no present
intention of selling (in connection with a distribution or otherwise), granting any participation in, or otherwise distributing
the same, and does not presently have reason to anticipate a change in such intention.

(ii)              Information and Sophistication. Without lessening or obviating the representations and warranties of the Company set
forth in subsection (a) above, the Holder hereby: (A) acknowledges that the Holder has received all the information the Holder
has requested from the Company and the Holder considers necessary or appropriate for deciding whether to acquire the Securities,
(B) represents that the Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms
and conditions of the offering of the Securities and to obtain any additional information necessary to verify the accuracy of
the information given the Holder and (C) further represents that the Holder has such knowledge and experience in financial and
business matters that the Holder is capable of evaluating the merits and risk of this investment.

(iii)            Ability to Bear Economic Risk. The Holder acknowledges that investment in the Securities involves a high degree of
risk, and represents that the Holder is able, without materially impairing the Holder’s financial condition, to hold the
Securities for an indefinite period of time and to suffer a complete loss of the Holder’s investment.

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(iv)              Further Limitations on Disposition. Without in any way limiting the representations set forth above, the Holder further
agrees not to make any disposition of all or any portion of the Securities unless and until:

(1)              
There is then in effect a registration statement under the Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or

(2)              
The Holder shall have notified the Company of the proposed disposition and furnished the Company with a detailed statement
of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, the Holder shall have furnished
the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration
under the Act or any applicable state securities laws; provided that no such opinion shall be required for dispositions in compliance
with Rule 144 under the Act, except in unusual circumstances.

(3)              
Notwithstanding the provisions of paragraphs (1) and (2) above, no such registration statement or opinion of counsel
shall be necessary for a transfer by the Holder to a partner (or retired partner) or member (or retired member) of the Holder
in accordance with partnership or limited liability company interests, or transfers by gift, will or intestate succession to any
spouse or lineal descendants or ancestors, if all transferees agree in writing to be subject to the terms hereof to the same extent
as if they were the Holders hereunder.

(v)              
Accredited Investor Status. The Holder is an “accredited investor” as such term is defined in Rule 501
under the Act.

(vi)            
No “Bad Actor” Disqualification. The Holder represents and warrants that neither (A) the Holder nor (B)
any entity that controls the Holder or is under the control of, or under common control with, the Holder, is subject to any Disqualification
Event, except for Disqualification Events covered by Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Act and disclosed in writing
in reasonable detail to the Company. The Holder represents that the Holder has exercised reasonable care to determine the accuracy
of the representation made by the Holder in this paragraph, and agrees to notify the Company if the Holder becomes aware of any
fact that makes the representation given by the Holder hereunder inaccurate.

(vii)            Foreign Investors. If the Holder is not a United States person (as defined by Section 7701(a)(30) of the Internal Revenue
Code of 1986, as amended (the “Code”)), the Holder hereby represents that he, she or it has satisfied
itself as to the full observance of the laws of the Holder’s jurisdiction in connection with any invitation to subscribe
for the Securities or any use of this Note, including (A) the legal requirements within the Holder’s jurisdiction for the
purchase of the Securities, (B) any foreign exchange restrictions applicable to such purchase, (C) any governmental or other consents
that may need to be obtained, and (D) the income tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the Securities. The Holder’s subscription, payment for and continued beneficial
ownership of the Securities will not violate any applicable securities or other laws of the Holder’s jurisdiction.

(viii)           Forward-Looking Statements. With respect to any forecasts, projections of results and other forward-looking statements
and information provided to the Holder, the Holder acknowledges that such statements were prepared based upon assumptions deemed
reasonable by the Company at the time of preparation. There is no assurance that such statements will prove accurate, and the
Company has no obligation to update such statements.

    	5

    	 

    

4.             Events of Default.

(a)              
If there shall be any Event of Default (as defined below) hereunder, at the option and upon the declaration of the
Holder and upon written notice to the Company (which election and notice shall not be required in the case of an Event of Default
under subsection (ii) or (iii) below), this Note shall accelerate and all principal and unpaid accrued interest shall become due
and payable. The occurrence of any one or more of the following shall constitute an “Event of Default”:

(i)               The Company fails to pay timely any of the principal amount due under this Note on the date the same becomes due and
payable or any unpaid accrued interest or other amounts due under this Note on the date the same becomes due and payable;

(ii)              The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium
law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit
of creditors or takes any corporate action in furtherance of any of the foregoing; or

(iii)             An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within 60 days
under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee or assignee for the benefit of creditors
(or other similar official) is appointed to take possession, custody or control of any property of the Company).

(b)              
In the event of any Event of Default hereunder, the Company shall pay all reasonable attorneys’ fees and court
costs incurred by the Holder in enforcing and collecting this Note.

5.             Miscellaneous Provisions.

(a)              
Waivers. The Company hereby waives demand, notice, presentment, protest and notice of dishonor.

(b)              
Further Assurances. The Holder agrees and covenants that at any time and from time to time the Holder will promptly
execute and deliver to the Company such further instruments and documents and take such further action as the Company may reasonably
require in order to carry out the full intent and purpose of this Note and to comply with state or federal securities laws or
other regulatory approvals.

(c)              
Transfers of Notes. This Note may be transferred only upon its surrender to the Company for registration of transfer,
duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Company. Thereupon,
this Note shall be reissued to, and registered in the name of, the transferee, or a new Note for like principal amount and interest
shall be issued to, and registered in the name of, the transferee. Interest and principal shall be paid solely to the registered
holder of this Note. Such payment shall constitute full discharge of the Company’s obligation to pay such interest and principal.

(d)              
Amendment and Waiver. Any term of this Note may be amended or waived with the written consent of the Company and the
Holder. In addition, any term of this Note may be amended or waived with the written consent of the Company and the Holder.

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(e)              
Governing Law. This Note shall be governed by and construed under the laws of the State of Nevada, as applied to agreements
among Nevada residents, made and to be performed entirely within the State of Nevada, without giving effect to conflicts of laws
principles.

(f)              
Binding Agreement. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Note, expressed or implied, is intended to confer upon any third party
any rights, remedies, obligations or liabilities under or by reason of this Note, except as expressly provided in this Note.

(g)               
Counterparts; Manner of Delivery. This Note may be executed in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile,
electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic
Transactions Act or other applicable law) or other transmission method and any counterpart so delivered shall be deemed to have
been duly and validly delivered and be valid and effective for all purposes.

(h)              
Titles and Subtitles. The titles and subtitles used in this Note are used for convenience only and are not to be considered
in construing or interpreting this Note.

(i)              
Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed electronic mail or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (iii) five days after having been sent by registered
or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of receipt. All communications to a party shall be
sent to the party’s address set forth on the signature page hereto or at such other address(es) as such party may designate
by 10 days’ advance written notice to the other party hereto.

(j)              
Expenses. The Company and the Holder shall each bear its respective expenses and legal fees incurred with respect to
the negotiation, execution and delivery of this Note and the transactions contemplated herein.

(k)              
Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to the
Holder, upon any breach or default of the Company under this Note shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach or default, or any acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by the Holder
of any breach or default under this Note, or any waiver by the Holder of any provisions or conditions of this Note, must be in
writing and shall be effective only to the extent specifically set forth in writing and that all remedies, either under this Note,
or by law or otherwise afforded to the Holder, shall be cumulative and not alternative. This Note shall be void and of no force
or effect in the event that the Holder fails to remit the full principal amount to the Company within five calendar days of the
date of this Note.

(l)              
Entire Agreement. This Note constitutes the full and entire understanding and agreement between the parties with regard
to the subjects hereof, and no party shall be liable or bound to any other party in any manner by any representations, warranties,
covenants and agreements except as specifically set forth herein.

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(m)              
Exculpation among Holders. The Holder acknowledges that the Holder is not relying on any person, firm or corporation,
other than the Company and its officers and Board members, in making its investment or decision to invest in the Company.

(n)              
Senior Indebtedness. The indebtedness evidenced by this Note is subordinated in right of payment to the prior payment
in full of any Senior Indebtedness in existence on the date of this Note or hereafter incurred. “Senior Indebtedness”
shall mean, unless expressly subordinated to or made on a parity with the amounts due under this Note, all amounts due in connection
with (i) indebtedness of the Company to banks or other lending institutions regularly engaged in the business of lending money
(excluding venture capital, investment banking or similar institutions and their affiliates, which sometimes engage in lending
activities but which are primarily engaged in investments in equity securities), and (ii) any such indebtedness or any debentures,
notes or other evidence of indebtedness issued in exchange for such Senior Indebtedness, or any indebtedness arising from the
satisfaction of such Senior Indebtedness by a guarantor.

(o)              
Broker’s Fees. Each party hereto represents and warrants that no agent, broker, investment banker, person or
firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker’s or finder’s
fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto
further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the
representation in this subsection being untrue.

 

[Signature
pages follow]

    	8

    	 

    

The
parties have executed this Convertible Promissory Note as of the date first
noted above.

	 	COMPANY:
	 	 
	

         

         
	MODULAR
                                         MEDICAL, INC.,

        a
        Nevada corporation

	 	 
	 	By:	 
	 	         	Paul M.
    DiPerna, Chief Executive Officer
	 	 	 	 
	 

         

         
	 	 

        16772
West Bernardo Drive

        San
        Diego, CA 92127

 

SIGNATURE PAGE TO

MODULAR
MEDICAL, INC.

CONVERTIBLE
PROMISSORY NOTE

    	 

    	 

    

The
parties have executed this Convertible Promissory Note as of the date first
noted above.

	 	HOLDER:
	 	 
	Name of Holder:  	 
	 	 
	 	By:	 
	 	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 
	 	E-mail:	 
	 	 
	 	Address:	 
	 	 	 
	 	 	 

 

SIGNATURE PAGE TO

MODULAR
MEDICAL, INC.

CONVERTIBLE
PROMISSORY NOTEDocument

Exhibit 4.1

DESCRIPTION OF REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
The following is a summary of the material terms of the securities of Hanesbrands Inc., a Maryland corporation (the “Company”), registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of January 2, 2021, and provisions of the Company’s charter and bylaws. The summary is subject to and qualified in its entirely by reference to the charter and bylaws, each of which is filed as an exhibit to the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021. The following also summarizes certain provisions of the Maryland General Corporation Law (the “MGCL”) and is subject to and qualified in its entirely by reference to the MGCL.
General
Our charter provides that we may issue up to 2,000,000,000 shares of common stock, par value $0.01 per share, and up to 50,000,000 shares of preferred stock, par value $0.01 per share, and permits our board of directors, without stockholder approval, to amend the charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we have authority to issue. The MGCL provides that our stockholders are generally not obligated to us or our creditors with respect to our stock, except to the extent that the subscription price or other agreed upon consideration has not been paid.
Common Stock
General.    Holders of our common stock have no preference, conversion, exchange, sinking fund or redemption rights and generally have no appraisal rights. Holders of our common stock are entitled to receive dividends when, as and if authorized by our board of directors and declared by us out of our assets legally available for the payment of dividends. Holders of our common stock are also entitled to share ratably in our assets legally available for distribution to our stockholders in the event of our liquidation, dissolution or winding up, after payment of or adequate provision for all of our known debts and liabilities. These rights are subject to, and may be adversely affected by, the preferential rights granted to any other class or series of our stock, including our preferred stock.
Each outstanding share of our common stock entitles the holder to one vote on all matters submitted to a vote of our stockholders, including the election of directors. Except as provided with respect to any other classes or series of stock, the holders of our common stock will possess exclusive voting power. Pursuant to our bylaws, directors in uncontested elections are elected upon the affirmative vote of a majority of the total votes cast for and against such nominee at a duly called meeting of stockholders. However, under our corporate governance guidelines, if in an uncontested election for director a nominee (whether or not an incumbent) does not receive the affirmative vote of a majority of the total votes cast for and against such nominee, the nominee must offer, following certification of the election results, to submit his or her resignation to our board of directors for consideration. Our governance and nominating committee will make a recommendation to our board of directors as to whether to accept or reject the resignation, taking into account any factors or other information that it considers appropriate and relevant. Directors in contested elections are elected by the affirmative vote of a plurality of the votes cast. In both uncontested and contested elections, holders of shares of our common stock have no right to cumulative voting in the election of 
NAI-1515971678v2 

directors. Consequently, at each annual meeting of stockholders, the holders of a majority of the shares of our common stock will be able to elect all of our directors.
Under the MGCL, a Maryland corporation generally cannot dissolve, amend its charter, merge or consolidate with, or convert into, another entity, sell all or substantially all of its assets or engage in a statutory share exchange unless advised by its board of directors and approved by the affirmative vote of stockholders entitled to cast at least two-thirds of the votes entitled to be cast on the matter. However, a Maryland corporation may provide in its charter for the approval of these matters by a lesser percentage, as long as such percentage is not less than a majority of all the votes entitled to be cast on the matter. Our charter provides for approval by a majority of all the votes entitled to be cast in these situations, except for certain amendments to our charter relating to the removal of directors.
Holders of our common stock, solely by virtue of their holdings, do not have preemptive rights to subscribe for or purchase any shares of our capital stock which we may issue in the future.
Our common stock is and is expected to remain uncertificated. Therefore, our stockholders will not be able to obtain stock certificates.
Preferred Stock
General.    Our charter authorizes our board of directors to authorize “blank check” preferred stock. Our board of directors can classify and issue from time to time any unissued shares of preferred stock and reclassify any previously classified but unissued shares of any class or series of preferred stock. The applicable terms of a particular class or series of preferred stock will be set forth in the articles supplementary or amendment to our charter establishing such class or series of preferred stock. These terms must include, but are not limited to, some or all of the following:
•title of the class or series;
•the number of shares of the class or series, which number our board of directors may thereafter increase or decrease
•whether and in what circumstances the holder is entitled to receive dividends and other distributions;
•whether (and if so, when and on what terms) the class or series can be redeemed by us or the holder or converted or exchanged by the holder;
•whether the class or series will rank senior or junior to or on parity with any other class or series of preferred stock; and
•voting and other rights of the class or series, if any.
Unless otherwise described in the articles supplementary or amendment, in the event we liquidate, dissolve or wind up our affairs, the holders of any class or series of preferred stock will have preference over the holders of common stock and any other capital stock ranking junior to such class or series for payment out of our assets of the amount specified in the applicable articles supplementary.
Holders of our preferred stock, solely by virtue of their holdings, do not have preemptive rights to subscribe for or purchase any shares of our capital stock which we may issue in the future.
Certain Provisions of Maryland Law and of Our Charter and Bylaws That Could Have the Effect of Delaying, Deferring or Preventing a Change in Control
Provisions of the MGCL, our charter and bylaws could make the following more difficult:
•acquisition of us by means of a tender offer or merger;
•acquisition of us by means of a proxy contest or otherwise; or
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•removal of our incumbent officers and directors.
These provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids. These provisions also are designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of the potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company outweigh the disadvantages of discouraging those proposals because negotiation with such proponent could result in an improvement of their terms.
Board of Directors.    Our charter and bylaws provide that the number of our directors may be established by the board of directors but may not be fewer than the minimum number required by the MGCL (which is currently one) nor more than 25. Pursuant to our charter, we have elected to be subject to the provision of Subtitle 8 of Title 3 of the MGCL regarding the filling of vacancies on our board of directors. Accordingly, except as may be provided by our board of directors in setting the terms of any class or series of stock, including any class or series of preferred stock, any vacancy on our board of directors may be filled only by a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which such vacancy occurred.
Our board of directors is not currently classified. However, it would be permissible under the MGCL for our board of directors to classify or declassify itself without stockholder approval.
Our charter provides that, subject to the rights of one or more classes or series of preferred stock, a director may be removed from office only for cause (as defined in our charter), and then only by the affirmative vote of at least two-thirds of the votes entitled to be cast generally in the election of directors. For the purpose of the charter, cause means, with respect to any director, the conviction of a felony or a final judgment of a court of competent jurisdiction holding that such director caused demonstrable, material harm to the corporation through bad faith or active and deliberate dishonesty.
Authority to Issue “Blank Check” Preferred Stock.    The rights of holders of our common stock or preferred stock offered may be adversely affected by the rights of holders of any shares of preferred stock that may be issued in the future. Our board of directors may cause shares of preferred stock to be issued in public or private transactions for any proper corporate purpose. Prior to issuance of shares of each class or series, our board of directors is required under the MGCL and by our charter to set the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Shares of preferred stock we issue may have the effect of rendering more difficult or discouraging an acquisition of us deemed undesirable by our board of directors.
Power to Reclassify Shares of Our Common and Preferred Stock.    Our charter also authorizes our board of directors to classify and reclassify any unissued shares of our common stock and preferred stock into other classes or series of capital stock, and permits a majority of our entire board of directors, without stockholder approval, to amend the charter to increase or decrease the aggregate number of shares of capital stock or the number of shares of capital stock of any class or series that we have authority to issue.
We believe that the power to issue additional shares of common stock or preferred stock and to classify or reclassify unissued shares of common stock or preferred stock and thereafter to issue the classified or reclassified shares provides us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs which might arise. These actions can be taken without stockholder approval, unless stockholder approval is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. The New York Stock Exchange currently requires stockholder approval as a prerequisite to listing shares in several instances, including where the present or potential issuance of shares could result in an increase in the number of shares of common stock or in the amount of voting securities outstanding by at least 20%. If the approval of our stockholders is not required for the issuance of our common stock or preferred stock, our board of directors may determine not to seek stockholder approval. Although we have no present intention of doing so, we could issue a class or series of stock that could, depending on the terms of such class or series, have 
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the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of common stock or otherwise be believed to be in the best interest of our stockholders.
Business Combinations.    Under the MGCL, “business combinations” between a Maryland corporation and an interested stockholder or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include certain mergers, consolidations, statutory share exchanges, asset transfers or issuances or reclassifications of equity securities. An interested stockholder is defined as:
•any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or
•an affiliate or associate of the corporation who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.
A person is not an interested stockholder under the statute if the board of directors approved in advance the transaction by which the stockholder otherwise would have become an interested stockholder. However, in approving a transaction, the board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms or conditions determined by the board.
After the five-year prohibition, any business combination between the corporation and an interested stockholder generally must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:
•80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and
•two-thirds of the votes entitled to be cast by the holders of voting stock of the corporation other than voting shares held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.
These super-majority vote requirements do not apply to business combinations in which, among other conditions, the common stockholders receive a minimum price, as defined under Maryland law, for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares.
The statute provides for various exemptions from its provisions, including business combinations that are exempted by the board of directors prior to the time that the interested stockholder becomes an interested stockholder.
The business combination statute could have the effect of delaying, deferring or preventing a transaction or a change in control that might involve a premium price for holders of our common stock or otherwise believed to be in the best interest of our stockholders.
Control Share Acquisitions.    Maryland’s control share acquisition act provides that a holder of “control shares” of a Maryland corporation acquired in a “control share acquisition” has no voting rights with respect to such shares except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquiror, by officers or by directors who are employees of the corporation are excluded from shares entitled to vote on the matter. Control shares are voting shares of stock, which, if aggregated with all other shares of stock owned by the acquiror or in respect of which the acquiror is able to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiror to exercise voting power in electing directors within one of the following ranges:
•one-tenth or more but less than one-third;
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•one-third or more but less than a majority; or
•a majority or more of all voting power.
Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A control share acquisition means the acquisition, directly or indirectly, of ownership of, or the power to direct the exercise of voting power with respect to, outstanding control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders, to be held within 50 days after a request and written undertaking, to consider the voting rights of the control shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions, including delivery of an acquiring person statement and a written undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person does not deliver an “acquiring person statement” as required by the statute, then the corporation may redeem for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the corporation to redeem control shares is subject to certain conditions and limitations. Fair value of the control shares is determined, without regard to the absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquiror or, if a meeting of stockholders is held at which the voting rights of the shares are considered and not approved, as of the date of such meeting. If voting rights for control shares are approved at a stockholders meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may elect to exercise appraisal rights.
The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply to shares acquired in a merger, consolidation or statutory share exchange if the corporation is a party to the transaction, or to acquisitions approved or exempted by the charter or bylaws of the corporation.
Our bylaws contain a provision exempting any and all acquisitions by any person of shares of our stock from Maryland’s control share acquisition act. Our board of directors may, however, amend or eliminate this provision in the future without stockholder approval.
Subtitle 8
Subtitle 8 of Title 3 of the MGCL permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in the charter or bylaws, to be subject to any or all of the following five provisions:
•a classified board;
•a two-thirds vote requirement for removing a director;
•a requirement that the number of directors be fixed only by vote of the directors;
•a requirement that a vacancy on the board be filled only by a vote of the remaining directors (whether or not they constitute a quorum) and for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is duly elected and qualifies; or
•a majority requirement for the calling of a special meeting of stockholders.
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We have elected to be subject to the provision of Subtitle 8 that provides that vacancies on our board of directors may be filled only by the remaining directors (whether or not they constitute a quorum) and that a director elected by the board of directors to fill a vacancy will serve for the remainder of the full term of the directorship. We have not elected to be subject to any of the other provisions of Subtitle 8, including the provisions that would permit us to classify our board of directors without stockholder approval. Through provisions in our charter and bylaws unrelated to Subtitle 8, we (1) vest in our board of directors the exclusive power to fix the number of directors and (2) provide that a director may be removed only for cause (as defined in our charter), and then only by the affirmative vote of two-thirds of the votes entitled to be cast generally in the election of directors.
Amendments to the Charter.    Subject to certain exceptions, our charter may be amended only if declared advisable by the board of directors and approved by the affirmative vote of the holders of not less than a majority of all of the votes entitled to be cast on the matter. Among the exceptions provided for in the charter, the board of directors may, without action by our stockholders, amend our charter to increase or decrease the aggregate number of shares of capital stock or the number of shares of capital stock of any class or series that we have authority to issue, or change the name or designation or par value of any class or series of our capital stock or the aggregate par value. In addition, certain amendments to provisions of our charter relating to removal of directors require the affirmative vote of the holders of not less than two-thirds of all the votes entitled to be cast on the matter.
Advance Notice of Director Nominations and New Business.    Our bylaws provide that with respect to an annual meeting of stockholders, nominations of persons for election to the board of directors and the proposal of other business to be considered by stockholders may be made only:
•pursuant to our notice of the meeting;
•by or at the direction of the board of directors; or
•by a stockholder who is a holder of record both at the time of giving of notice and at the time of the meeting, who is entitled to vote at the meeting in the election of each individual so nominated and who has complied with the advance notice procedures provided for in our bylaws.
In order to comply with the advance notice procedures of our bylaws, stockholders generally must provide notice to our secretary not earlier than the 150th day or later than 5:00 p.m., Eastern Time, on the 120th day before the first anniversary of the date our proxy statement was released for the preceding year’s annual meeting.
With respect to special meetings of stockholders, only the business specified in our notice of the special meeting may be brought before the meeting. Nominations of persons for election to the board of directors at a special meeting may be made only:
•by or at the direction of the board of directors; or
•provided that the special meeting has been called in accordance with the procedures in our bylaws for stockholder-requested special meetings for the purpose of electing directors, by a stockholder who is a holder of record both at the time of giving of notice and at the time of the meeting, who is entitled to vote at the meeting and who has complied with the advance notice procedures provided for in our bylaws.
Stockholders generally must provide notice to our secretary not earlier than the 120th day before such special meeting or later than 5:00 p.m., Eastern Time, on the later of the 90th day before the special meeting or the tenth day after the first public announcement of the date of the special meeting and the nominees of our board of directors to be elected at the meeting.
A stockholder’s notice must contain certain information specified by our bylaws about the stockholder, its affiliates and any proposed business or nominee for election as a director, including information about the economic interest of the stockholder, its affiliates and any proposed nominee in us.
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Special Meetings of Stockholders Pursuant to our bylaws, our chairman, our president, our chief executive officer or our board of directors may call a special meeting of our stockholders. Subject to the provisions of our bylaws, a special meeting of our stockholders to act on any matter that may properly be considered by our stockholders will also be called by our secretary upon the written request of stockholders entitled to cast not less than a twenty percent (20%) of all the votes entitled to be cast at the meeting on such matter, accompanied by the information required by our bylaws. Our secretary will inform the requesting stockholders of the reasonably estimated cost of preparing and delivering the notice of meeting (including our proxy materials), and the requesting stockholder must pay such estimated cost before our secretary may prepare and deliver the notice of the special meeting.
Stockholder Action by Written Consent.    Our bylaws provide that any action required or permitted to be taken at any meeting of our stockholders may be taken without a meeting only by a unanimous consent given in writing or by electronic transmission by each stockholder entitled to vote on the matter or, if the action is advised and submitted to the stockholders for approval by the board of directors, by a written consent of stockholders entitled to cast not less than the minimum number of votes that would be necessary to take such action at a meeting of stockholders.
Exclusive Forum. Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland, or, if that court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division, or the “designated courts,” will be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of any duty owed by any of our current or former directors, officers, employees, stockholders or agents to us or to our stockholders, (c) any action asserting a claim against us or any of our current or former directors, officers, employees, stockholders or agents arising pursuant to any provision of the MGCL or our charter or bylaws or (d) any action asserting a claim against us or any of our current or former directors, officers, employees, stockholders or agents that is governed by the internal affairs doctrine.
If any action containing a cause of action or claim whose subject matter is within the scope of the preceding paragraph is filed in a court other than one of the designated courts in the name of any stockholder (including a beneficial owner) or derivatively on behalf of our company, such stockholder shall be deemed to have consented to: (i) the personal jurisdiction of the designated courts in connection with such action to enforce the preceding sentence; (ii) transfer of such action to the United States District Court for the District of Maryland, Northern Division, if such action was filed in a United States District Court; (iii) dismissal of such action in favor of refiling in the designated courts if such action was filed in a court other than a United States District Court; and (iv) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in such action as agent for such stockholder.
The exclusive forum selection provided by our bylaws does not limit the scope of exclusive federal or concurrent jurisdiction for actions brought under federal securities laws. For example, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and as such, the exclusive forum selection discussed above would not apply to such suits. Furthermore, Section 22 of the Securities Act of 1933, as amended (the “Securities Act”) provides for concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, and as such, the exclusive forum selection discussed above would not apply to such suits.
Limitation of Liability and Indemnification of Directors and Officers. Maryland law permits a Maryland corporation to include in its charter a provision eliminating the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty that is established by a final judgment and is material to the cause of action. Our charter contains such a provision that eliminates such liability to the maximum extent permitted by Maryland law.
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The MGCL requires a Maryland corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity. The MGCL permits a Maryland corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to or in which they may be made or are threatened to be made a party or witness by reason of their service in those or other capacities unless it is established that:
•the act or omission of the director or officer was material to the matter giving rise to the proceeding and the action was committed in bad faith or was the result of active and deliberate dishonesty;
•the director or officer actually received an improper personal benefit in money, property or services; or
•in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful.
In addition, under the MGCL, a Maryland corporation may not indemnify a director or officer for an adverse judgment in a suit by or on behalf of the corporation or if the director or officer was adjudged liable on the basis that personal benefit was improperly received, unless, in either case, a court orders indemnification, and then only for expenses. A court may order indemnification for expenses if it determines that the director or officer is fairly and reasonably entitled to indemnification, even though the director or officer did not meet the prescribed standard of conduct or was adjudged liable on the basis that personal benefit was improperly received.
In addition, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon the corporation’s receipt of:
•a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification by the corporation; and
•a written undertaking, which may be unsecured, by the director or officer or on his or her behalf to repay the amount paid if it shall ultimately be determined that the standard of conduct was not met.
Our charter authorizes us, and our bylaws obligate us, to the maximum extent permitted by Maryland law in effect from time to time, to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding without requiring a preliminary determination of the director’s or officer’s ultimate entitlement to indemnification to:
•any present or former director or officer who is made or threatened to be made a party to a proceeding by reason of his or her service in that capacity; or
•any individual who, while a director or officer of our company and at our request, serves or has served as a director, officer, partner or trustee of another corporation, partnership, joint venture, trust, employee benefit plan or any other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in that capacity.
Our charter and bylaws also permit us, with the approval of our board of directors, to indemnify and advance expenses to any person who served a predecessor of ours in any of the capacities described above and to any employee or agent of our company or a predecessor of our company.
The Company also maintains indemnity insurance as permitted by Section 2-418 of the MGCL, pursuant to which its officers and directors are indemnified or insured against liability or loss under certain circumstances, which may include liability or related losses under the Securities Act or the Exchange Act.

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