Document:

atec-ex102_7.htm

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 21, 2019, among Alphatec Holdings, Inc., a Delaware corporation (the “Company”), and Squadron Medical Finance Solutions LLC, a Delaware limited liability company (“Squadron”, and Tawani Holdings LLC, an Illinois limited liability company (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).

WHEREAS, this Agreement is entered into pursuant to the Credit, Security and Guaranty Agreement (as the same may be amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”) dated as of November 6, 2018, by and among the Company, Alphatec Spine, Inc., a California corporation, SafeOp Surgical, Inc., a Delaware corporation and each additional borrower that may hereafter be added to the Credit Agreement, the other credit parties listed on the signature pages thereof, and Squadron as lender thereunder.

WHEREAS, pursuant to Section 2.1(e) of the Credit Agreement, Squadron (including any designee of Squadron) agreed to purchase from the Company on the date hereof a Common Stock Purchase Warrant (the “Warrant”) exercisable for an aggregate of 4,838,710 shares of Common Stock.    

WHEREAS, the closing of additional financing under the Credit Agreement is conditioned upon, among other things, the Company executing and delivering this Agreement. 

The Company and each Purchaser hereby agrees as follows:

1.Definitions.

As used in this Agreement, the following terms shall have the following meanings:

“Advice” shall have the meaning set forth in Section 6(d).

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

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

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

“Credit Agreement” shall have the meaning set forth in the Recitals.

“Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 60th calendar day following the date hereof (or, in the event of a “full review” by the Commission, the 90th calendar day following the date hereof) and with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the 75th calendar day following the date on which an additional Registration Statement is 

 

 

required to be filed hereunder (or, in the event of a “full review” by the Commission, the 110th calendar day following the date such additional Registration Statement is required to be filed hereunder); provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Event” shall have the meaning set forth in Section 2(d).

“Event Date” shall have the meaning set forth in Section 2(d).

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

“Filing Date” means, with respect to the Initial Registration Statement required hereunder, the 30th calendar day following the date hereof and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities; provided, however, that if the Filing Date falls on a day that is not a Trading Day, then the Filing Date shall be extended to the next succeeding Trading Day.

“Financing Documents” shall have the meaning set forth in the Credit Agreement.

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities and any successors or assigns pursuant to Section 6(h).

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.

“Losses” shall have the meaning set forth in Section 5(a).

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

“Plan of Distribution” shall have the meaning set forth in Section 2(a).

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

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement or free writing prospectus, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities” means, as of any date of determination, (a) all shares of Common Stock, (b) all Warrant Shares then issued and issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), and (c) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Transfer Agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company, and all Warrants are exercised by “cashless exercise” as provided in Section 2(c) of each of the Warrants), as reasonably determined by the Company, upon the written advice of counsel to the Company, which advice shall be reasonably acceptable to counsel for Squadron.

“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, free writing prospectuses, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

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

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“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Selling Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).

“SEC Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.

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

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any successors to any of the foregoing).

“Transfer Agent” means Computershare, Inc., the current transfer agent of the Company, with a mailing address of 480 Washington Avenue, Jersey City, New Jersey 07310, and any successor transfer agent of the Company.

“Warrants” shall have the meaning set forth in the Recitals.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

2.Shelf Registration.

(a)On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise directed by at least 75% in interest of the Holders or if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) substantially the “Plan of Distribution” attached hereto as Annex A and substantially the “Selling Shareholders” section attached hereto as Annex B (which sections may be modified, if required to comply with 

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comments, if any, provided by the Commission), provided, however, that no Holder shall be required to be named as an “underwriter” without such Holder’s express prior written consent. Subject to the terms of this Agreement, the Company shall use its reasonable best efforts to cause a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as reasonably practicable after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its reasonable best efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424. Failure to so notify the Holders within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).

(b)Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e); with respect to filing on Form S-3 or other appropriate form, and subject to the provisions of Section 2(d) with respect to the payment of liquidated damages; provided, however, that prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.

(c)Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:

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(i)
	
First, the Company shall reduce or eliminate any securities to be included other than Registrable Securities; 

	
 
	
(ii)
	
Second, the Company shall reduce Registrable Securities represented by Warrant Shares (applied, in the case that some Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by such Holders); and

	
 
	
(iii)
	
Third, the Company shall reduce Registrable Securities represented by Shares (applied, in the case that some Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Shares held by such Holders).

In the event of a cutback hereunder, the Company shall give the Holders at least five (5) Trading Days prior written notice along with the calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its reasonable best efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.

(d)If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the Company shall be deemed to have not satisfied this clause (i)), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement within ten (10) Trading Days after the receipt of comments by or notice from the Commission that such amendment is required in order for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after the effective date of a Registration Statement, such Registration Statement ceases for any reason (other than due to the inaccuracy of any information regarding the Holders) to remain continuously effective as to all Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of twenty (20) calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such ten (10) calendar day period is exceeded, and for purpose of clause (v) the date on which such tenth (10th) or twentieth (20th) calendar day period, as applicable, is exceeded 

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being referred to as “Event Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to the product of 1.5% multiplied by the aggregate amount deemed paid by such Holder (the “Deemed Amount”) which shall be based on the product of $2.00 and the number of shares issuable upon exercise of the Warrant held by such Holder with respect to any securities then held by, or issuable to, such Holder that are Registrable Securities. The parties agree that the maximum aggregate liquidated damages payable to a Holder under this Agreement shall be 12% of the aggregate Deemed Amount paid by such Holder. If the Company fails to pay any partial liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 15% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of an Event.

(e)If Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the Commission.

(f)Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as any Underwriter without the prior written consent of such Holder.

3.Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company shall:

(a)Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference, but not including (i) any Exchange Act filing or (ii) any supplement or post-effective amendment to a registration statement that is not related to such Holder’s Registrable Securities), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide the Holders advance copies of any universal shelf registration statement registering securities in addition to those required hereunder, or any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the 

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Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto.  Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Annex C (a “Selling Stockholder Questionnaire”) on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which such Holder receives draft materials in accordance with this Section.

(b)(i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith (subject to any requirement that a post-effective amendment be declared effective by the Commission) as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities subject to any SEC Guidance that sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

(c)If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.

(d)Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed (but not including (i) any Exchange Act filing or (ii) any supplement or post-effective amendment to a registration statement that is not related to such Holder’s Registrable Securities), (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments 

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in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided, however, in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its subsidiaries.

(e)Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(f)Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

(g)Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

(h)Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such 

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jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(i)If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Warrant, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.

(j)Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.

(k)Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.

(l)The Company shall use its reasonable best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.

(m)The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if 

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required by the Commission, the natural persons thereof that have voting and dispositive control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.

4.Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Financing Documents, any legal fees or other costs of the Holders.

5.Indemnification.

(a)Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged 

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untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that each Holder has approved Annex A and Annex B hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders in accordance with Section 6(h).

(b)Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder’s information provided in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A and Annex B hereto for this purpose), such Prospectus or in any amendment or supplement thereto. In no event shall the liability of a selling Holder be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

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(c)Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, (3) the Indemnified Party has reasonably concluded (based upon the written advice of its counsel) that a conflict of interest exists that would prohibit a single counsel from representing it and the other Indemnified Parties or (4) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest may exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

(d)Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in 

- 13 -

 

such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

6.Miscellaneous.

(a)Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

(b)No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than the Registrable Securities. The Company shall not file any other registration statements, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their equivalents, until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall not prohibit the 

- 14 -

 

Company from filing supplements or amendments to registration statements filed prior to the date of this Agreement.

(c)[Reserved]

(d)Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges that any periods during which such Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be subject to the provisions of Section 2(d).

(e)Piggy-Back Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 or one universal shelf registration statement on Form S-3 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however, that the Company shall not be required to provide notice or otherwise register any Registrable Securities pursuant to this Section 6(e) that are immediately eligible for resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective Registration Statement that is available for resales or other dispositions by such Holder. Notwithstanding the foregoing, (i) if such registration involves an underwritten public offering, such Holder must sell such Registrable Securities that such Holder requests to be registered to, if applicable, the underwriter(s) at the same price and subject to the same underwriting discounts and commissions that apply to the other securities sold in such offering (it being acknowledged that the Company shall be responsible for other expenses as set forth in Section 4) and subject to such Holder entering into customary underwriting documentation for selling stockholders in an underwritten public offering, and (ii) if, at any time after giving written notice of its intention to register any Registrable Securities pursuant to this Section 6(e) and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to cause such registration statement to become effective under the Securities Act, the Company shall deliver written notice to such Holder and, thereupon, shall be relieved of its obligation to register any Registrable Securities in connection with such registration.

- 15 -

 

(f)Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and each Holder. If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

(g)Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Credit Agreement and the signature pages hereto.

(h)Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may assign any or all of its rights under this Agreement to any Person to whom such Holder assigns or transfers any Warrants or Warrant Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Warrants and Warrants Shares, by the provisions of this Agreement.

(i)No Inconsistent Agreements. Neither the Company nor any of its subsidiaries has entered, as of the date hereof, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Except pursuant to agreements filed as exhibits to its periodic reports filed with the Commission, neither the Company nor any of its subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.

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

(k)Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Credit Agreement.

- 16 -

 

(l)Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

(m)Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(n)Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.

Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.

********************

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

COMPANY:

ALPHATEC HOLDINGS, INC.

 

By: /s/ Jeffrey Black
Name: Jeffrey Black
Title: Chief Financial Officer

 

Signature Page to Registration Rights Agreement

 

HOLDERS:

SQUADRON MEDICAL FINANCE SOLUTIONS LLC

 

By: /s/ David R. Pelizzon
Name: David R. Pelizzon
Title: President

Address:

18 Hartford Avenue

Granby, CT 06035

Email:  dpelizzon@sqdncap.com

 

 

Signature Page to Registration Rights Agreement

 

HOLDERS:

TAWANI HOLDINGS LLC

 

By: /s/ Jennifer N. Pritzker
Name: Jennifer N. Pritzker
Title: Manager

Address:

104 S. Michigan Avenue

Suite 500

Chicago, IL 60603

Email:  jnp@tawani.net

 

 

 

Signature Page to Registration Rights Agreement

 

Annex A

Plan of Distribution

Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

	
 
	
•
	
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

	
 
	
•
	
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

	
 
	
•
	
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

	
 
	
•
	
an exchange distribution in accordance with the rules of the applicable exchange;

	
 
	
•
	
privately negotiated transactions;

	
 
	
•
	
settlement of short sales;

	
 
	
•
	
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;

	
 
	
•
	
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

	
 
	
•
	
a combination of any such methods of sale; or

	
 
	
•
	
any other method permitted pursuant to applicable law.

 

The Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-

 

- 21 -

 

dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

 

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Annex B

SELLING SHAREHOLDERS

The common stock being offered by the selling shareholders are those previously issued to the selling shareholders, and those issuable to the selling shareholders, upon exercise of the warrants. For additional information regarding the issuances of those warrants, see “Warrants” above. We are registering the shares of common stock issuable upon exercise of the Warrants in order to permit the selling shareholders to offer the shares for resale from time to time. Except as otherwise disclosed herein, and except for the ownership of the shares of common stock issuable upon exercise of the warrants and the warrants, the selling shareholders have not had any material relationship with us within the past three years.

The table below lists the selling shareholders and other information regarding the beneficial ownership of the shares of common stock by each of the selling shareholders. The second column lists the number of shares of common stock beneficially owned by each selling shareholder, based on its ownership of the shares of common stock and warrants, as of [                    , 2018], assuming exercise of the warrants held by the selling shareholders on that date, without regard to any limitations on exercises.

The third column lists the shares of common stock being offered by this prospectus by the selling shareholders.

In accordance with the terms of a registration rights agreement with the selling shareholders, this prospectus generally covers the resale of the sum the maximum number of shares of common stock issuable upon exercise of the warrants, determined as if the outstanding warrants were exercised in full as of the trading day immediately preceding the date this registration statement was initially filed with the SEC, each as of the trading day immediately preceding the applicable date of determination and all subject to adjustment as provided in the warrant, without regard to any limitations on the exercise of the warrants. The fourth column assumes the sale of all of the shares offered by the selling shareholders pursuant to this prospectus.

Under the terms of the warrants, a selling shareholder may not exercise the warrants to the extent such conversion or exercise would cause such selling shareholder, together with its affiliates and attribution parties, to beneficially own a number of shares of common stock which would exceed 4.99% of our then outstanding common stock following such exercise, excluding for purposes of such determination shares of common stock issuable upon exercise of the warrants which have not been exercised. The number of shares in the second column does not reflect this limitation. The selling shareholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

	
Name of Selling Shareholder
	
Number of shares of Common Stock Owned Prior to Offering
	
Maximum Number of shares of Common Stock to be Sold Pursuant to this Prospectus
	
Number of shares of Common Stock Owned After Offering

 

 

 

- 23 -

 

Annex C

ALPHATEC HOLDINGS, INC.

Selling Stockholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the “Registrable Securities”) of Alphatec Holdings, Inc., a Delaware corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

NOTICE

The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.

 

 

- 24 -

 

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

QUESTIONNAIRE

1.Name.

(a)Full Legal Name of Selling Stockholder

 

	
 
	
(b)
	
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:

	
 
	
(c)
	
Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):

 

2.Address for Notices to Selling Stockholder:

 

 

 

Telephone: 

Fax:

Contact Person: 

3.Broker-Dealer Status:

(a)Are you a broker-dealer?

Yes    ☐         No    ☐

	
 
	
(b)
	
If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

Yes    ☐         No    ☐

Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

(c)Are you an affiliate of a broker-dealer?

Yes    ☐         No    ☐

 

- 25 -

 

	
 
	
(d)
	
If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes    ☐         No    ☐

Note:If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

4.Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.

Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.

	
 
	
(a)
	
Type and Amount of other securities beneficially owned by the Selling Stockholder:

 

 

5.Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here:

 

 

The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.

 

- 26 -

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Date:Beneficial Owner: 

By:
Name:
Title:

PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:

 

 

- 27 -QUANTA,
INC.

 

2019
omnibus STOCK INCENTIVE PLAN

 

Approved
by the Board: June 27, 2019

Approved
by the Stockholders: [DATE]

 

1.
Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel; to provide additional
incentives to Employees, Directors and Consultants to contribute to the successful performance of the Company and any Subsidiary
of the Company; to promote the growth of the market value of the Company’s Common Stock; to align the interests of Grantees
with those of the Company’s stockholders; and to promote the success of the Company’s business.

 

2.
Definitions. The following definitions shall apply as used herein and in all individual Award Agreements except as a term
may be otherwise defined in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement,
such definition shall supersede the definition contained in this Section 2.

 

(a)
“Administrator” means the Plan Administrator as described in Section 4.

 

(b)
“Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable
provisions of federal and state securities laws, the corporate laws of Nevada, and, to the extent other than Nevada, the corporate
law of the state of the Company’s incorporation, the Code, the rules of any applicable stock exchange or national market
system, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein.

 

(c)
“Assumed” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed
by the Company or (ii) the contractual obligations represented by the Award are expressly assumed (and not simply by operation
of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the
number and type of securities of the successor entity or its Parent subject to the Award and the exercise or purchase price thereof
which at least preserves the compensation element of the Award existing at the time of the Corporate Transaction as determined
in accordance with the instruments evidencing the agreement to assume the Award.

 

(d)
“Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock
Unit, or other right or benefit under the Plan.

 

(e)
“Award Agreement” means the written agreement evidencing the grant of an Award executed by the Company
and the Grantee, including any amendments thereto.

 

(f)
“Board” means the Board of Directors of the Company.

 

(g)
“Cause” means, with respect to the termination by the Company or a Related Entity of a Grantee’s
Continuous Service:

 

(i)
that such termination is for “Cause” as such term (or word of like import) is expressly defined in a then-effective
written employment agreement, consulting agreement, service agreement or other similar agreement between the Grantee and the Company
or such Related Entity, provided, however, that with regard to any agreement that defines “Cause” on the occurrence
of or in connection with a Corporate Transaction, such definition of “Cause” shall not apply until a Corporate Transaction
actually occurs; or

 

    	 

    	 

    

 

(ii)
in the absence of such then-effective written agreement and definition, is based on, in the determination of the Administrator:
(A) the Grantee’s performance of any act, or failure to perform any act, in bad faith and to the detriment of the Company
or a Related Entity; (B) the Grantee’s dishonesty, intentional misconduct or material breach of any agreement with the Company
or a Related Entity; (C) the Grantee’s material breach of any noncompetition, confidentiality or similar agreement with
the Company or a Related Entity, as determined under such agreement; (D) the Grantee’s commission of a crime involving dishonesty,
breach of trust, or physical or emotional harm to any person; (E) if the Grantee is an Employee or Consultant, the Grantee’s
engaging in acts or omissions constituting gross negligence, misconduct or a willful violation of a Company or a Related Entity
policy which is or is reasonably expected to be materially injurious to the Company and/or a Related Entity; or (F) if the Grantee
is an Employee, the grantee’s failure to follow the reasonable instructions of the Board or such grantee’s direct
supervisor, which failure, if curable, is not cured within ten (10) days after notice to such grantee or, if cured, recurs within
one hundred eighty (180) days.

 

(h)
“Code” means the Internal Revenue Code of 1986, as amended, or any successor statute.

 

(i)
“Committee” means any committee composed of members of the Board appointed by the Board to administer
the Plan.

 

(j)
“Common Stock” means the Company’s voting common stock, par value $0.001 per share.

 

(k)
“Company” means Quanta, Inc., a Nevada corporation, or any successor entity that adopts the Plan in
connection with a Corporate Transaction.

 

(l)
“Consultant” means any person (other than an Employee or a Director, solely with respect to rendering
services in such person’s capacity as a Director) who is engaged by the Company or any Related Entity to render consulting
or advisory services to the Company or such Related Entity.

 

(m)
“Continuous Service” means that the provision of services to the Company or a Related Entity in any
capacity of Employee, Director or Consultant is not interrupted or terminated. In jurisdictions requiring notice in advance of
an effective termination as an Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual
cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled
before a termination as an Employee, Director or Consultant can be effective under Applicable Laws. A Grantee’s Continuous
Service shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which
the Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case
of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor in any capacity of
Employee, Director or Consultant, or (iii) any change in status as long as the individual remains in the service of the Company
or a Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in the Award Agreement).
An approved leave of absence for purposes of this Plan shall include sick leave, military leave, or any other authorized personal
leave, so long as the Company or Related Entity has a reasonable expectation that the individual will return to provide services
for the Company or Related Entity, and provided further that the leave does not exceed six (6) months, unless the individual has
a statutory or contractual right to re-employment following a longer leave. For purposes of each Incentive Stock Option granted
under the Plan, if such leave exceeds three (3) months, and reemployment upon expiration of such leave is not guaranteed by statute
or contract, then the Incentive Stock Option shall be treated as a Non-Qualified Stock Option beginning on the day three (3) months
and one (1) day following the expiration of such three (3) month period.

 

    	2

    	 

    

 

(n)
“Corporate Transaction” means any of the following transactions, provided, however, that the Administrator
shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding
and conclusive:

 

(i)
a merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;

 

(ii)
the sale, transfer or other disposition of all or substantially all of the assets of the Company;

 

(iii)
the complete liquidation or dissolution of the Company;

 

(iv)
any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender
offer followed by a reverse merger) in which the Company is the surviving entity but (A) the Shares outstanding immediately prior
to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash
or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding securities are transferred to a person or persons different from those who held such securities immediately prior
to such merger or the initial transaction culminating in such merger; or

 

(v)
acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or
by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities.

 

(o)
“Data” has the meaning set forth in Section 22 of this Plan.

 

(p)
“Director” means a member of the Board or the board of directors of any Related Entity.

 

    	3

    	 

    

 

(q)
“Disability” means a “disability” (or word of like import) as defined under the long-term
disability policy of the Company or the Related Entity to which the Grantee provides services regardless of whether the Grantee
is covered by such policy. If the Company or the Related Entity to which the Grantee provides service does not have a long-term
disability plan in place, “Disability” means that a Grantee is unable to carry out the responsibilities and functions
of the position held by the Grantee by reason of any medically determinable physical or mental impairment for a period of not
less than ninety (90) consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator.

 

(r)
“Disqualifying Disposition” means any disposition (including any sale) of Common Stock received upon
exercise of an Incentive Stock Option before either (i) two years after the date the Employee was granted the Incentive Stock
Option, or (ii) one year after the date the Employee acquired Common Stock by exercising the Incentive Stock Option. If the Employee
has died before such stock is sold, these holding period requirements do not apply and no Disqualifying Disposition can occur
thereafter.

 

(s)
“Dividend Equivalent Right” means a right entitling the Grantee to compensation measured by dividends
paid with respect to Common Stock.

 

(t)
“Employee” means any person, including an Officer or Director, who is in the employ of the Company or
any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed
and the manner and method of performance. The payment of a director’s fee by the Company or a Related Entity shall not be
sufficient to make such person an “Employee” of the Company or a Related Entity.

 

(u)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(v)
“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows.

 

(i)
If the Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation
The NASDAQ Global Select Market, The NASDAQ Global Market, or The NASDAQ Capital Market of The NASDAQ Stock Market LLC, its Fair
Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on the
principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination
(or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing
sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems
reliable;

 

(ii)
If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, its Fair Market Value shall be the closing sales price for such stock as quoted on such system or by such securities
dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a Share shall be the mean
between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported
on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

 

    	4

    	 

    

 

(iii)
In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market Value
thereof shall be determined by the Administrator in good faith by application of a reasonable valuation method consistently applied
and taking into consideration all available information material to the value of the Company in a manner in compliance with Section
409A of the Code, or in the case of an Incentive Stock Option, in a manner in compliance with Section 422 of the Code.

 

(w)
“Grantee” means an Employee, Director or Consultant who receives an Award under the Plan.

 

(x)
“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code.

 

(y)
“Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

 

(z)
“Officer” means a person who is an officer of the Company or a Related Entity within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

 

(aa)
“Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan.

 

(bb)
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

 

(cc)
“Performance-Based Compensation” means any Award that the Administrator grants pursuant to Section 6(d)
of the Plan.

 

(dd)
“Performance Period” means the time period during which specified performance criteria and/or continued
status as an Employee must be met as determined by the Administrator.

 

(ee)
“Plan” means this Quanta, Inc. 2019 Omnibus Stock Incentive Plan, as the same may be amended from time
to time.

 

(ff)
“Post-Termination Exercise Period” means the period specified in the Award Agreement of not less than
thirty (30) days commencing on the date of termination (other than termination by the Company or any Related Entity for Cause)
of the Grantee’s Continuous Service, or such longer period as may be applicable upon death or Disability.

 

(gg)
“Related Entity” means any Parent or Subsidiary of the Company.

 

(hh)
“Restricted Stock” means Shares issued under the Plan to the Grantee for such consideration, if any,
and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other
terms and conditions as established by the Administrator.

 

    	5

    	 

    

 

(ii)
“Restricted Stock Units” means an Award which may be earned in whole or in part upon the passage of
time or the attainment of performance criteria established by the Administrator and which may be settled for cash, Shares or other
securities or a combination of cash, Shares or other securities as established by the Administrator.

 

(jj)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor thereto.

 

(kk)
“SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established
by the Administrator, measured by appreciation in the value of Common Stock.

 

(ll)
“Share” means a share of the Common Stock.

 

(mm)
“Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined
in Section 424(f) of the Code.

 

(nn)
“Tax Obligations” means all income tax, social insurance, payroll tax, fringe benefits tax, or other
tax-related liabilities related to a Grantee’s participation in the Plan and the receipt of any benefits hereunder, as determined
under the Applicable Laws.

 

3.
Stock Subject to the Plan.

 

(a)
Subject to adjustment as described in Section 13 below, the maximum aggregate number of Shares which may be issued pursuant to
all Awards (including Incentive Stock Options) is twelve million (12,000,000) Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.

 

(b)
Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily)
shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued
under the Plan, except that the maximum aggregate number of Shares which may be issued pursuant to the exercise of Incentive Stock
Options shall not exceed the number specified in Section 3(a). Shares that actually have been issued under the Plan pursuant to
an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested
Shares are forfeited or repurchased by the Company, such Shares shall become available for future grant under the Plan. In the
event any Option or other Award granted under the Plan is exercised through the tendering of Shares (either actually or through
attestation), or in the event tax withholding obligations are satisfied by tendering or withholding Shares, any Shares so tendered
or withheld shall not again be available for awards under the Plan. To the extent that cash in lieu of Shares is delivered upon
the exercise of an SAR pursuant to Section 6(m), the Company shall be deemed, for purposes of applying the limitation on the number
of shares, to have issued the greater of the number of Shares which it was entitled to issue upon such exercise or on the exercise
of any related Option. Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise
of Options shall not be available for awards under the Plan.

 

    	6

    	 

    

 

4.
Administration of the Plan.

 

(a)
Plan Administrator.

 

(i)
Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are
also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by the
Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related
transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the Board.

 

(ii)
Administration With Respect to Consultants and Other Employees. With respect to grants of Awards to Employees or Consultants
who are neither Directors nor Officers of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated
by the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed, such Committee
shall continue to serve in its designated capacity until otherwise directed by the Board.

 

(b)
Multiple Administrative Bodies. The Plan may be administered by different bodies with respect to Directors, Officers, Consultants,
and Employees who are neither Directors nor Officers.

 

(c)
Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given
to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in
its discretion:

 

(i)
to select the Employees, Directors and Consultants to whom Awards may be granted from time to time hereunder;

 

(ii)
to determine whether and to what extent Awards are granted hereunder;

 

(iii)
to determine the number of Shares or the amount of other consideration to be covered by each Award granted hereunder;

 

(iv)
to approve forms of Award Agreements for use under the Plan;

 

(v)
to determine the type, terms and conditions of any Award granted hereunder;

 

(vi)
to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable non-U.S. jurisdictions
and to afford Grantees favorable treatment under such rules or laws; provided, however, that no Award shall be granted under any
such additional terms, conditions, rules or procedures with terms or conditions which are inconsistent with the provisions of
the Plan;

 

    	7

    	 

    

 

(vii)
to amend the terms of any outstanding Award granted under the Plan, provided that any amendment that would adversely affect the
Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent; provided, however,
that an amendment or modification that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee;

 

(viii)
to construe and interpret the terms of the Plan and Awards, including without limitation, any notice of award or Award Agreement,
granted pursuant to the Plan;

 

(ix)
to institute an option exchange program;

 

(x)
to make other determinations as provided in this Plan; and

 

(xi)
to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate.

 

The
express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority
of the Administrator; provided that the Administrator may not exercise any right or power reserved to the Board. Any decision
made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan.

 

(d)
Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or as Officers
or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related
Entity to whom authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified
by the Company to the extent permitted by law on an after-tax basis against all reasonable expenses, including attorneys’
fees, actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding,
or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure
to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim,
investigation, action, suit or proceeding, except in relation to such liabilities, costs, and expenses as may arise out of, or
result from, the bad faith, gross negligence, willful misconduct, or criminal acts of such persons; provided, however, that within
thirty (30) days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at the Company’s expense to defend the same.

 

5.
Eligibility. Awards other than Incentive Stock Options may be granted to Employees, Directors, and Consultants of the Company
and any Related Entity. Incentive Stock Options may be granted only to Employees of the Company or a Related Entity. An Employee,
Director, or Consultant who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be
granted to such Employees, Directors, or Consultants who are residing in non-U.S. jurisdictions as the Administrator may determine
from time to time.

 

    	8

    	 

    

 

6.
Terms and Conditions of Awards.

 

(a)
Types of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director
or Consultant that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance
of (i) Shares, (ii) cash or (iii) an Option, an SAR, or similar right with a fixed or variable price related to the Fair Market
Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more
events, or the satisfaction of performance criteria or other conditions. Such awards include, without limitation, Options, SARs,
sales or bonuses of Restricted Stock, Restricted Stock Units, and Dividend Equivalent Rights. An Award may consist of one such
security or benefit, or two (2) or more of them in any combination or alternative.

 

(b)
Designation of Award. Each Award shall be evidenced by an Award Agreement in form and substance satisfactory to the Administrator.
The type of each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as
either an Incentive Stock Option or a Non-Qualified Stock Option. However, notwithstanding such designation, an Option will qualify
as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is
not exceeded. The $100,000 limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of
the Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during
any calendar year (under all plans of the Company or any Related Entity). For purposes of this calculation, Incentive Stock Options
shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined
as of the grant date of the relevant Option. Any Option granted which fails to satisfy the requirements of the Applicable Laws
for treatment as an Incentive Stock Option shall be a Non-Qualified Stock Option.

 

(c)
Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions
of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture
provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction
of any performance criteria that may be established by the Administrator.

 

(d)
Performance-Based Awards. The Administrator may grant Performance-Based Compensation subject to the following provisions:

 

(i)
The Awards will be subject to the achievement of certain performance criteria as the Administrator may determine. The performance
criteria established by the Administrator may be based on any one of, or combination of, the following criteria:

 

	 	(A)	Net
    earnings or net income (before or after taxes);
	 	 	 
	 	(B)	Earnings
    per share;

 

    	9

    	 

    

 

	 	(C)	Net
    sales growth;
	 	 	 
	 	(D)	Net
    operating profit;
	 	 	 
	 	(E)	Return
    measures (including, but not limited to, return on assets, capital, equity, or sales);
	 	 	 
	 	(F)	Cash
    flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return on capital);
	 	 	 
	 	(G)	Cash
    flow per share;
	 	 	 
	 	(H)	Earnings
    before or after taxes, interest, depreciation, and/or amortization;
	 	 	 
	 	(I)	Gross
    or operating margins;
	 	 	 
	 	(J)	Productivity
    ratios;
	 	 	 
	 	(K)	Share
    price (including, but not limited to, growth measures and total stockholder return);
	 	 	 
	 	(L)	Expense
    targets or ratios;
	 	 	 
	 	(M)	Charge-off
    levels;
	 	 	 
	 	(N)	Improvement
    in or attainment of revenue levels;
	 	 	 
	 	(O)	Deposit
    growth;
	 	 	 
	 	(P)	Margins;
	 	 	 
	 	(Q)	Operating
    efficiency;
	 	 	 
	 	(R)	Operating
    expenses;
	 	 	 
	 	(S)	Economic
    value added;
	 	 	 
	 	(T)	Improvement
    in or attainment of expense levels;
	 	 	 
	 	(U)	Improvement
    in or attainment of working capital levels;
	 	 	 
	 	(V)	Debt
    reduction;
	 	 	 
	 	(W)	Capital
    targets; and
	 	 	 
	 	(X)	Consummation
    of acquisitions, dispositions, projects or other specific events or transactions.

 

    	10

    	 

    

 

The
Administrator may provide in any grant of an Award that any evaluation of performance may include or exclude any of the following
events that occurs during a Performance Period: (a) asset write-downs, (b) litigation or claim judgments or settlements, (c) the
effect of changes in tax laws, accounting principles or regulations, or other laws or provisions affecting reported results, (d)
any reorganization and restructuring programs, (e) Extraordinary Items for the applicable Performance Period, (f) mergers, acquisitions
or divestitures, and (g) foreign exchange gains and losses. For this purpose “Extraordinary Items” means extraordinary,
unusual, and/or nonrecurring items of gain or loss as defined under United States generally accepted accounting principles.

 

(ii)
Before the 90th day of the applicable Performance Period (or, if the Performance Period is less than one year, no later than the
number of days which is equal to 25% of such Performance Period), the Administrator will determine the duration of the Performance
Period, the performance criteria on which performance will be measured, and the amount and terms of payment/vesting upon achievement
of such criteria.

 

(iii)
Following the completion of each Performance Period, the Administrator will certify in writing whether the applicable performance
criteria have been achieved for the Awards for such Performance Period. A Grantee will be eligible to receive payment pursuant
to an Award for a Performance Period only if the performance criteria for such Performance Period are achieved. In determining
the amounts earned by a Grantee pursuant to an Award granted as Performance-Based Compensation, the Administrator will have the
right to (A) reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account
additional factors that the Administrator may deem relevant to the assessment of individual or corporate performance for the Performance
Period, (B) determine what actual Award, if any, will be paid in the event of a Corporate Transaction or in the event of a termination
of employment following a Corporate Transaction prior to the end of the Performance Period, and (C) determine what actual Award,
if any, will be paid in the event of a termination of employment other than as the result of a Grantee’s death or Disability
prior to a Corporate Transaction and prior to the end of the Performance Period to the extent an actual Award would have otherwise
been achieved had the Grantee remained employed through the end of the Performance Period.

 

(iv)
Payment of the Award to a Grantee shall be paid following the end of the Performance Period, or if later, the date on which any
applicable contingency or restriction has ended.

 

(v)
Sections 6(d)(i) though 6(d)(iv) above are not required for an Award of Options or SARs. However, any of those provisions may
be included in an Award of Options or SARs at the discretion of the Administrator.

 

(vi)
Intentionally omitted.

 

(e)
Acquisitions and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution
for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another
entity, an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase
or other form of transaction.

 

    	11

    	 

    

 

(f)
Deferral of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees
the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or
other event that absent the election would entitle the Grantee to payment or receipt of Shares or other consideration under an
Award. The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of,
and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms,
conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program.

 

(g)
Separate Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing
particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator
from time to time.

 

(h)
Individual Award Limit. No Grantee may be granted an Award of Options or SARs in any calendar year with respect to more
than one million two hundred thousand (1,200,000) Shares, or an Award of Restricted Stock, Restricted Stock Units, Dividend Equivalent
Rights, or other Awards that are valued with reference to shares covering more than one million two hundred thousand (1,200,000)
Shares. The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization
pursuant to Section 13 below. For this purpose, the repricing of an Option (or in the case of an SAR, the base amount on which
the stock appreciation is calculated is reduced to reflect a reduction in the Fair Market Value of the Common Stock) shall be
treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR.

 

(i)
Early Exercise. An Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time while
an Employee, Director or Consultant to exercise any part or all of the Award prior to full vesting of the Award. Any unvested
Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or
to any other restriction the Administrator determines to be appropriate.

 

(j)
Term of Award. The term of each Award shall be the term stated in the Award Agreement, provided, however, that the term
shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted
to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of
all classes of stock of the Company or any Related Entity, the term of the Incentive Stock Option shall be five (5) years from
the date of grant thereof or such shorter term as may be provided in the Award Agreement. Notwithstanding the foregoing, the specified
term of any Award shall not include any period for which the Grantee has elected to defer the receipt of the Shares or cash issuable
pursuant to the Award.

 

(k)
Transferability of Awards. Unless the Administrator provides otherwise, no award may be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during
the lifetime of the Grantee, only by the Grantee. Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries
of the Grantee’s Award in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator.

 

    	12

    	 

    

 

(l)
Time of Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes
the determination to grant such Award, or such other later date as is determined by the Administrator.

 

(m)
Stock Appreciation Rights. An SAR may be granted (i) with respect to any Option granted under this Plan, either concurrently
with the grant of such Option or at such later time as determined by the Administrator (as to all or any portion of the Shares
subject to the Option), or (ii) alone, without reference to any related Option. Each SAR granted by the Administrator under this
Plan shall be subject to the following terms and conditions. Each SAR granted to any participant shall relate to such number of
Shares as shall be determined by the Administrator, subject to adjustment as provided in Section 13. In the case of an SAR granted
with respect to an Option, the number of Shares to which the SAR pertains shall be reduced in the same proportion that the holder
of the Option exercises the related Option. The exercise price of an SAR will be determined by the Administrator at the date of
grant but may not be less than 100% of the Fair Market Value of the Shares subject thereto on the date of grant. Subject to the
right of the Administrator to deliver cash in lieu of Shares (which, as it pertains to Officers and Directors of the Company,
shall comply with all requirements of the Exchange Act), the number of Shares which shall be issuable upon the exercise of an
SAR shall be determined by dividing:

 

(i)
the number of Shares as to which the SAR is exercised multiplied by the amount of the appreciation in such Shares (for this purpose,
the “appreciation” shall be the amount by which the Fair Market Value of the Shares subject to the SAR on the exercise
date exceeds (1) in the case of an SAR related to an Option, the exercise price of the Shares under the Option or (2) in the case
of an SAR granted alone, without reference to a related Option, an amount which shall be determined by the Administrator at the
time of grant, subject to adjustment under Section 13); by

 

(ii)
the Fair Market Value of a Share on the exercise date.

 

In
lieu of issuing Shares upon the exercise of an SAR, the Administrator may elect to pay the holder of the SAR cash equal to the
Fair Market Value on the exercise date of any or all of the Shares which would otherwise be issuable. No fractional Shares shall
be issued upon the exercise of an SAR; instead, the holder of the SAR shall be entitled to receive a cash adjustment equal to
the same fraction of the Fair Market Value of a Share on the exercise date or to purchase the portion necessary to make a whole
share at its Fair Market Value on the date of exercise. The exercise of an SAR related to an Option shall be permitted only to
the extent that the Option is exercisable under Section 11 on the date of surrender. Any Incentive Stock Option surrendered pursuant
to the provisions of this Section 6(m) shall be deemed to have been converted into a Non-Qualified Stock Option immediately prior
to such surrender.

 

    	13

    	 

    

 

(n)
Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set forth herein, any Award that is
not exempt from the requirements of Section 409A of the Code shall contain such provisions so that such Award will comply with
the requirements of Section 409A of the Code. Such restrictions, if any, shall be determined by the Administrator and contained
in the Award Agreement evidencing such Award.

 

7.
Award Exercise or Purchase Price, Consideration and Taxes.

 

(a)
Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows.

 

(i)
In the case of an Incentive Stock Option:

 

(1)
granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Related Entity, the per Share exercise price shall be
not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

 

(2)
granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(ii)
In the case of a Non-Qualified Stock Option, the per Share exercise price shall be not less than one-hundred percent (100%) of
the Fair Market Value per Share on the date of grant.

 

(iii)
In the case of Awards granted as Performance-Based Compensation, the exercise or purchase price, if any, shall be not less than
one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

 

(iv)
In the case of other Awards, such price as is determined by the Administrator.

 

(v)
Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(e), above,
the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument
evidencing the agreement to issue such Award.

 

(b)
Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase
of an Award, including the method of payment, shall be determined by the Administrator. In addition to any other types of consideration
the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the
following:

 

(i)
cash;

 

(ii)
check;

 

    	14

    	 

    

 

(iii)
delivery of Grantee’s promissory note with such recourse, interest, security, and redemption provisions as the Administrator
determines as appropriate (but only to the extent that the acceptance or terms of the promissory note would not violate an Applicable
Law); provided, however, that interest shall compound at least annually and shall be charged at the minimum rate of interest necessary
to avoid (A) the imputation of interest income to the Company and compensation income to the Grantee under any applicable provisions
of the Code, and (B) the classification of the Award as a liability for financial accounting purposes;

 

(iv)
surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require
which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as
to which said Award shall be exercised;

 

(v)
with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall
provide written instructions to a broker-dealer acceptable to the Company to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (B)
shall provide written directives to the Company to deliver the certificates (or other evidence satisfactory to the Company to
the extent that the Shares are uncertificated) for the purchased Shares directly to such broker-dealer in order to complete the
sale transaction;

 

(vi)
with respect to Options, payment through a “net exercise” such that, without the payment of any funds, the Grantee
may exercise the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option is being
exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined
by the Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market Value per Share;

 

(vii)
past or future services actually or to be rendered to the Company or a Related Entity;

 

(viii)
any combination of the foregoing methods of payment; or

 

(ix)
any other method approved by the Administrator.

 

The
Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Award Agreement described
in Section 4(c)(iv), or by other means, grant Awards which do not permit all of the foregoing forms of consideration to be used
in payment for the Shares or which otherwise restrict one or more forms of consideration.

 

8.
Notice to Company of Disqualifying Disposition. Each Employee who receives an Incentive Stock Option must agree to notify
the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Common Stock acquired pursuant
to the exercise of an Incentive Stock Option.

 

    	15

    	 

    

 

9.
Tax Withholding.

 

(a)
Prior to the delivery of any Shares or cash pursuant to an Award (or the exercise thereof), or at such other time as the Tax Obligations
are due, the Company, in accordance with the Code and any Applicable Laws, shall have the power and the right to deduct or withhold,
or require a Grantee to remit to the Company, an amount sufficient to satisfy all Tax Obligations. The Administrator may condition
such delivery, payment, or other event pursuant to an Award on the payment by the Grantee of any such Tax Obligations.

 

(b)
The Administrator, pursuant to such procedures as it may specify from time to time, may designate the method or methods by which
a Grantee may satisfy the Tax Obligations. As determined by the Administrator from time to time, these methods may include one
or more of the following:

 

(i)
paying cash;

 

(ii)
electing to have the Company withhold cash or Shares deliverable to the Grantee having a Fair Market Value equal to the amount
required to be withheld;

 

(iii)
delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum amount required to be withheld
or remitted, provided the delivery of such Shares will not result in any adverse accounting consequences as the Administrator
determines;

 

(iv)
selling a sufficient number of Shares otherwise deliverable to the Grantee through such means as the Administrator may determine
(whether through a broker or otherwise) equal to the Tax Obligations required to be withheld;

 

(v)
retaining from salary or other amounts payable to the Grantee cash having a sufficient value to satisfy the Tax Obligations; or

 

(vi)
any other means which the Administrator determines to both comply with Applicable Laws, and to be consistent with the purposes
of the Plan.

 

The
amount of Tax Obligations will be deemed to include any amount that the Administrator determines may be withheld at the time the
election is made, not to exceed the amount determined by using the maximum federal, state, local and foreign marginal income tax
rates applicable to the Grantee or the Company, as applicable, with respect to the Award on the date that the amount of tax or
social insurance liability to be withheld or remitted is to be determined. The Fair Market Value of the Shares to be withheld
or delivered shall be determined as of the date that the Tax Obligations are required to be withheld.

 

10.
Rights As a Stockholder.

 

(a)
Restricted Stock. Except as otherwise provided in any Award Agreement, a Grantee will not have any rights of a stockholder
with respect to any of the Shares granted to the Grantee under an Award of Restricted Stock (including the right to vote or receive
dividends and other distributions paid or made with respect thereto) nor shall cash dividends or dividend equivalents accrue or
be paid in respect of any unvested Award of Restricted Stock, unless and until such Shares vest.

 

    	16

    	 

    

 

(b)
Other Awards. In the case of Awards other than Restricted Stock, except as otherwise provided in any Award Agreement, a
Grantee will not have any rights of a stockholder, nor will dividends or dividend equivalents accrue or be paid, with respect
to any of the Shares granted pursuant to such Award until the Award is exercised or settled and the Shares are delivered (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).

 

11.
Exercise of Award.

 

(a)
Procedure for Exercise.

 

(i)
Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under
the terms of the Plan and as specified in the Award Agreement.

 

(ii)
An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with
the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the
Award is exercised has been made, including, to the extent selected, use of the broker-dealer sale and remittance procedure to
pay the purchase price as provided in Section 7(b)(v).

 

(b)
Exercise of Award Following Termination of Continuous Service. In the event of termination of a Grantee’s Continuous
Service for any reason other than Disability or death, such Grantee may, but only during the Post-Termination Exercise Period
(but in no event later than the expiration date of the term of such Award as set forth in the Award Agreement), exercise the portion
of the Grantee’s Award that was vested at the date of such termination or such other portion of the Grantee’s Award
as may be determined by the Administrator. The Grantee’s Award Agreement may provide that upon the termination of the Grantee’s
Continuous Service for Cause, the Grantee’s right to exercise the Award shall terminate concurrently with the termination
of Grantee’s Continuous Service. In the event of a Grantee’s change of status from Employee to Consultant, an Employee’s
Incentive Stock Option shall convert automatically to a Non-Qualified Stock Option on the day three (3) months and one day following
such change of status. To the extent that the Grantee’s Award was unvested at the date of termination, or if the Grantee
does not exercise the vested portion of the Grantee’s Award within the Post-Termination Exercise Period, the Award shall
terminate.

 

(c)
Disability of Grantee. In the event of termination of a Grantee’s Continuous Service as a result of his or her Disability,
such Grantee may, but only within twelve (12) months from the date of such termination (or such longer period as specified in
the Award Agreement but in no event later than the expiration date of the term of such Award as set forth in the Award Agreement),
exercise the portion of the Grantee’s Award that was vested at the date of such termination; provided, however, that if
such Disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive
Stock Option such Incentive Stock Option shall automatically convert to a Non-Qualified Stock Option on the day three (3) months
and one day following such termination. To the extent that the Grantee’s Award was unvested at the date of termination,
or if Grantee does not exercise the vested portion of the Grantee’s Award within the time specified herein, the Award shall
terminate.

 

    	17

    	 

    

 

(d)
Death of Grantee. In the event of a termination of the Grantee’s Continuous Service as a result of his or her death,
or in the event of the death of the Grantee during the Post-Termination Exercise Period or during the twelve (12) month period
following the Grantee’s termination of Continuous Service as a result of his or her Disability, the Grantee’s estate
or a person who acquired the right to exercise the Award by bequest or inheritance may exercise the portion of the Grantee’s
Award that was vested as of the date of termination, within twelve (12) months from the date of death (or such longer period as
specified in the Award Agreement but in no event later than the expiration of the term of such Award as set forth in the Award
Agreement). To the extent that, at the time of death, the Grantee’s Award was unvested, or if the Grantee’s estate
or a person who acquired the right to exercise the Award by bequest or inheritance does not exercise the vested portion of the
Grantee’s Award within the time specified herein, the Award shall terminate.

 

(e)
Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise of an Award within the applicable
time periods set forth in this Section 11 is prevented by the provisions of Section 12 below, the Award shall remain exercisable
until one (1) month after the date the Grantee is notified by the Company that the Award is exercisable, but in any event no later
than the expiration of the term of such Award as set forth in the Award Agreement.

 

12.
Conditions Upon Issuance of Shares; Manner of Issuance of Shares.

 

(a)
If at any time the Administrator determines that the delivery of Shares pursuant to the exercise, vesting or any other provision
of an Award is or may be unlawful under Applicable Laws, the vesting or right to exercise an Award or to otherwise receive Shares
pursuant to the terms of an Award shall be suspended until the Administrator determines that such delivery is lawful and shall
be further subject to the approval of counsel for the Company with respect to such compliance. The Company shall have no obligation
to effect any registration or qualification of the Shares under any Applicable Law.

 

(b)
As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant
at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable
Laws.

 

(c)
Subject to the Applicable Laws and any governing rules or regulations, the Company shall issue or cause to be issued the Shares
acquired pursuant to an Award and shall deliver such Shares to or for the benefit of the Grantee by means of one or more of the
following as determined by the Administrator: (i) by delivering to the Grantee evidence of book entry Shares credited to the account
of the Grantee, (ii) by depositing such Shares for the benefit of the Grantee with any broker with which the Grantee has an account
relationship, or (iii) by delivering such Shares to the Grantee in certificate form.

 

    	18

    	 

    

 

(d)
No fractional Shares shall be issued pursuant to any Award under the Plan; any Grantee who would otherwise be entitled to receive
a fraction of a Share upon exercise or vesting of an Award will receive from the Company cash in lieu of such fractional Shares
in an amount equal to the Fair Market Value of such fractional Shares, as determined by the Administrator.

 

13.
Adjustments. Subject to any required action by the stockholders of the Company, the number of Shares covered by each outstanding
Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, as well as any
other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease
in the number of issued and outstanding Shares resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in the number
of issued and outstanding Shares effected without receipt of consideration by the Company, or (iii) any other transaction with
respect to the Company’s Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation
(including a spin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible securities of the Company shall not be deemed to
have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator and its
determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason
hereof shall be made with respect to, the number or price of Shares subject to an Award. No adjustments shall be made for dividends
paid in cash or in property other than Common Stock of the Company, nor shall cash dividends or dividend equivalents accrue or
be paid in respect of unexercised Options or unvested Awards hereunder.

 

14.
Corporate Transactions.

 

(a)
Termination of Award to Extent Not Assumed in Corporate Transaction. Effective upon the consummation of a Corporate Transaction,
all outstanding Awards under the Plan shall terminate. However, all such Awards shall not terminate to the extent they are Assumed
in connection with the Corporate Transaction.

 

(b)
Acceleration of Award Upon Corporate Transaction. The Administrator shall have the authority, exercisable either in advance
of any actual or anticipated Corporate Transaction or at the time of an actual Corporate Transaction, and exercisable at the time
of the grant of an Award under the Plan or any time while an Award remains outstanding, to provide for the full or partial automatic
vesting and exercisability of one or more outstanding unvested Awards under the Plan and the release from restrictions on transfer
and repurchase or forfeiture rights of such Awards in connection with a Corporate Transaction on such terms and conditions as
the Administrator may specify. The Administrator also shall have the authority to condition any such Award vesting and exercisability
or release from such limitations upon the subsequent termination of the Continuous Service of the Grantee within a specified period
following the effective date of the Corporate Transaction. The Administrator may provide that any Awards so vested or released
from such limitations in connection with a Corporate Transaction shall remain fully exercisable until the expiration or sooner
termination of the Award.

 

    	19

    	 

    

 

(c)
Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option accelerated under this Section 14 in connection
with a Corporate Transaction shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000
dollar limitation of Section 422(d) of the Code is not exceeded.

 

15.
Effective Date and Term of Plan. The Plan shall become effective at such time as it has been (a) approved by the Company’s
stockholders and (b) adopted by the Board. Stockholder approval shall be obtained in the degree and manner required under Applicable
Laws. The Plan shall continue in effect for a term of ten (10) years unless sooner terminated. Any Award granted before stockholder
approval is obtained will be rescinded if stockholder approval is not obtained within the time prescribed, and Shares issued on
the grant or exercise of any such Award shall not be counted in determining whether stockholder approval is obtained. Subject
to the preceding sentence and the Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

 

16.
Amendment, Suspension or Termination of the Plan.

 

(a)
The Board may at any time amend, suspend or terminate the Plan in any respect, except that it may not, without the approval of
the stockholders obtained within twelve (12) months before or after the Board adopts a resolution authorizing any of the following
actions, do any of the following:

 

(i)
increase the total number of shares that may be issued under the Plan (except by adjustment pursuant to Section 13);

 

(ii)
modify the provisions of Section 6 regarding eligibility for grants of Incentive Stock Options;

 

(iii)
modify the provisions of Section 7(a) regarding the exercise price at which shares may be offered pursuant to Options (except
by adjustment pursuant to Section 13);

 

(iv)
extend the expiration date of the Plan; and

 

(v)
except as provided in Section 13 (including, without limitation, any stock dividend, stock split, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the Company
may not amend an Award granted under the Plan to reduce its exercise price per share, cancel and regrant new Awards with lower
prices per share than the original prices per share of the cancelled Awards, or cancel any Awards in exchange for cash or the
grant of replacement Awards with an exercise price that is less than the exercise price of the original Awards, essentially having
the effect of a repricing, without approval by the Company’s stockholders.

 

(b)
No Award may be granted during any suspension of the Plan or after termination of the Plan.

 

    	20

    	 

    

 

(c)
No suspension or termination of the Plan shall adversely affect any rights under Awards already granted to a Grantee without his
or her consent.

 

17.
Reservation of Shares.

 

(a)
The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient
to satisfy the requirements of the Plan, to the extent available.

 

(b)
The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained.

 

18.
No Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect
to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company
or a Related Entity to terminate the Grantee’s Continuous Service at any time, with or without Cause, and with or without
notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee who is employed at will is in
no way affected by its determination that the Grantee’s Continuous Service has been terminated for Cause for the purposes
of this Plan.

 

19.
No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan
of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions
under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of
any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of
compensation. The Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income
Security Act of 1974, as amended.

 

20.
Information to Grantees. The Company shall provide to each Grantee, during the period for which such Grantee has one or
more Awards outstanding, such information as required by Applicable Laws.

 

21.
Electronic Delivery. The Administrator may decide to deliver any documents related to any Award granted under the Plan
through an online or electronic system established and maintained by the Company or another third party designated by the Company
or to request a Grantee’s consent to participate in the Plan by electronic means. By accepting an Award, each Grantee consents
to receive such documents by electronic delivery and agrees to participate in the Plan through an online or electronic system
established and maintained by the Company or another third party designated by the Company, and such consent shall remain in effect
throughout Grantee’s Continuous Service with the Company and any Related Entity and thereafter until withdrawn in writing
by Grantee.

 

    	21

    	 

    

 

22.
Data Privacy. The Administrator may decide to collect, use and transfer, in electronic or other form, personal data as
described in this Plan or any Award for the exclusive purpose of implementing, administering and managing participation in the
Plan. By accepting an Award, each Grantee acknowledges that the Company holds certain personal information about Grantee, including,
but not limited to, name, home address and telephone number, date of birth, social security number or other identification number,
salary, nationality, job title, details of all Awards awarded, cancelled, exercised, vested or unvested, for the purpose of implementing,
administering and managing the Plan (the “Data”). Each Grantee further acknowledges that Data may be
transferred to any third parties assisting in the implementation, administration and management of the Plan and that these third
parties may be located in jurisdictions that may have different data privacy laws and protections, and Grantee authorizes such
third parties to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing,
administering and managing the Plan, including any requisite transfer of such Data as may be required to a broker or other third
party with whom the recipient or the Company may elect to deposit any Shares acquired upon any Award.

 

23.
Compliance with Section 409A. To the extent that the Administrator determines that any Award granted hereunder is subject
to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to
avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements shall
be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other guidance that may be issued or amended after the
effective date of the Plan. Notwithstanding any provision of the Plan to the contrary, in the event that following the effective
date of the Plan the Administrator determines that any Award may be subject to Section 409A of the Code and related Department
of Treasury guidance (including such Department of Treasury guidance as may be issued after the effective date of the Plan), the
Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines
are necessary or appropriate to (1) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment
of the benefits provided with respect to the Award, or (2) comply with the requirements of Section 409A of the Code and related
Department of Treasury guidance.

 

24.
Unfunded Obligation. Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable
to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation,
Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be
required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect
to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments,
which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any
trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company
or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s
creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related
Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.

 

25.
Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation
of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural
shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires
otherwise.

 

    	22

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